• Proparco offers a €1.5 million guarantee to support Teranga Capital’s SME investments.

• The mechanism lowers risk and backs a €3 million portfolio for growing Senegalese firms.

• Teranga Capital expands its regional reach and strengthens financing for underserved SMEs.

Proparco, the AFD Group subsidiary focused on private sector financing, announced on December 4, 2025, that it has granted a €1.5 million guarantee ($1.7 million) to Teranga Capital. The guarantee is designed to support the deployment of a €3 million investment portfolio dedicated to Senegalese SMEs.

The guarantee is a risk-sharing mechanism. It covers part of potential losses and enables Teranga Capital to invest in SMEs that are in a growth phase and require commercial development and financial support through equity investments. The Senegalese private equity firm targets SMEs active in high-impact sectors such as agribusiness, energy access, and information and communications technology.

According to Sadio Dicko, Proparco’s regional director for West Africa, the guarantee allows Proparco to cover part of the risks borne by Teranga Capital, which expands its investment capacity and reduces the cost of risk for the investor. In May 2025, Teranga Capital had already strengthened its financial capacity through a CFA2 billion ($3.55 million) fundraising round, increasing its possible investment tickets to as much as CFA1 billion per company.

This expanded capacity enables the firm to support companies with high capital needs in a context of rapidly evolving local demand. Teranga Capital has also widened its geographic scope with a targeted expansion into Mauritania, Guinea-Bissau, and Cape Verde, complementing its current activities in Senegal and Gambia.

A fund addressing a structural need in Senegal’s market

A member of the Investisseurs & Partenaires (I&P) network, Teranga Capital has operated since 2016 to bridge the financing gap for small and medium-sized enterprises, often described as the “missing middle.” The fund offers investments and tailored technical support for companies with needs of up to CFA300 million, a segment rarely served by commercial banks.

Teranga Capital’s role is critical in a country where SMEs represent 99.8 % of the economic fabric, generate 80 % of jobs, and contribute 36 % of GDP. Yet access to financing remains a major challenge: only 9 % of bank credit is allocated to SMEs, and 60 % do not survive their first year, according to Senegal’s Secretary of State Ibrahima Thiam in July 2025.

Proparco’s guarantee helps ease these constraints. It strengthens Teranga Capital’s ability to support local businesses and foster the emergence of a more resilient economic landscape.

Chamberline Moko