Africa_focused fund Injaro Investments is raising money to invest in West African businesses too big for microfinance but which are unable to get bank loans, especially in the agricultural sector, its Managing Principal Jerry Parkes said on Tuesday.

Injaro's West Africa SME Growth Fund will make investments of up to $3 million in small and medium_sized enterprises (SMEs), and is looking for a net internal rate of return (IRR) of 15_20 percent, measured in dollars, for its equity investors.

"The Growth Fund will target SMEs, primarily in francophone West Africa, whose financing needs fall between the limits of traditional microfinance institutions, at the bottom end of the spectrum, and large commercial sources of finance," Parkes said.

"The Growth Fund will make investments ... mainly in businesses along the agribusiness value chain with the aim of developing these businesses into successful regional players," he said, picking Ghana, Ivory Coast, Senegal, Burkina Faso and Mali as its main target countries.

Injaro, which has offices in Ghana and Ivory Coast, expects the region's economy to perform well.

"West Africa's economies have demonstrated their resilience following the impact of the global financial crisis, and are projected, on average, to grow faster than OECD countries in 2010," said Parkes.

"West African countries continue to be net importers of finished goods whose primary inputs are produced within their own borders," he said.

In July, the firm closed its West Africa Agricultural Investment Fund with $3.5 million. The fund, which Injaro says is the first targeted specifically at promoting the growth of small_ and medium_sized African seed companies, will invest in seed producers in Burkina Faso, Ghana, Mali, Niger, and Nigeria.

"The agricultural value chain offers significant opportunity for local value_addition and import substitution with the main drivers being a growing local and global demand for food and an abundance of arable land in West Africa," Parkes said.

Ghana, a major regional economy which is already a large_scale cocoa and gold exporter, is due to begin commercial oil production in December.

"Ghana's oil discovery naturally creates many potential opportunities. As an SME investor, we are most likely to make investments in local companies that provide services either directly or indirectly to the oil sector," Parkes said.