The Dhow Kimura African Commodity Trade Finance Fund is an alternative investment vehicle managed by Kimura Capital LLP. It aims to provide small to medium-sized enterprises (SMEs) in sub-Saharan Africa with liquidity for trade transactions to support their growth. In recent years, regulatory and legislative changes have led international banks to reduce their exposure in trade-related transactions. As a consequence, local financial institutions are now unable to secure sufficient liquidity from correspondent banks in order to meet the growing demands for trade finance. As a result, they have curtailed their lending SMEs, especially where information asymmetries are present, where borrowers lack risk capital. Local financial institutions are also often reluctant to consider credit structuring with credit enhancements. However, it is estimated that SMEs account for more than 40% of all enterprises in Africa. The size of the global commodity trade finance market is USD1.5trn annually, with non-bank financiers currently serving less than USD5bn in this space. This, and banks being at their lowest level of credit exposure to this sector since 2008/9, presents dhow kimura with a sizable opportunity to innovate and create a scalable investor product with significant AUM growth. There are also significant opportunities to partner with SME owners and management to facilitate growth and development, lowering their risk and obtaining better yields for the fund. dhow kimura will target a yield range of 10% to 12% pa.
