The largest ever fund to finance Africa’s sub-$1m (£500,000) SME (small and medium enterprise) sector has reached the $125m (£62m) milestone.

The Grofin Africa Fund, promoted by South-African company GroFin in partnership with the Shell Foundation, has raised the fund to provide ‘growth finance’ for organisations in Africa that are too large for micro-finance but too small for commercial banks and private equity.

Chris West, deputy director of the Shell Foundation, said, “SMEs are a key driver of economic growth in the developed world, but the sector has long been neglected in Africa by risk-averse banks … the continent is being denied a potential engine of economic growth and job creation.”

GroFin was co-established by the Shell Foundation in 2004 and has already supported over 1,000 enterprises with business assistance and financed more than 100 of these. The GroFin Africa fund is intended to help over 400 entrepreneurs create sustainable jobs. This fund adds to $100m (£50m) already raised through the efforts of GroFin and the Shell Foundation, and is still open for investment.