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RR RUEHDU RUEHJO
DE RUEHNR #0857/01 0910338
ZNR UUUUU ZZH
R 310338Z MAR 08
FM AMEMBASSY NAIROBI
TO RUEHC/SECSTATE WASHDC 5296
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHUJA/AMEMBASSY ABUJA 0603
RUEHAR/AMEMBASSY ACCRA 0933
RUEHDS/AMEMBASSY ADDIS ABABA 0008
RUEHAN/AMEMBASSY ANTANANARIVO 0265
RUEHEG/AMEMBASSY CAIRO 3987
RUEHDK/AMEMBASSY DAKAR 1332
RUEHDR/AMEMBASSY DAR ES SALAAM 5903
RUEHOR/AMEMBASSY GABORONE 0952
RUEHKM/AMEMBASSY KAMPALA 2731
RUEHKH/AMEMBASSY KHARTOUM 1983
RUEHLGB/AMEMBASSY KIGALI 5051
RUEHLU/AMEMBASSY LUANDA 0874
RUEHLS/AMEMBASSY LUSAKA 4184
RUEHTO/AMEMBASSY MAPUTO 1806
RUEHPL/AMEMBASSY PORT LOUIS 1710
RUEHSA/AMEMBASSY PRETORIA 9137
RUEHRB/AMEMBASSY RABAT 0193
RUEHDU/AMCONSUL DURBAN 0160
RUEHJO/AMCONSUL JOHANNESBURG 0601
RUEHOS/AMCONSUL LAGOS 0837

UNCLAS SECTION 01 OF 02 NAIROBI 000857 
 
SIPDIS 
 
STATE ALSO FOR AF/E AND AF/EPS 
 
STATE PLEASE PASS TO OPIC AMEETA PATEL 
 
TREASURY FOR VIRGINIA BRANDON 
 
PLEASE PASS USAID/AFR/EA 
 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: EINV EFIN KE
SUBJECT: MISSION KENYA RESPONSE ON PROPOSED OPIC FINANCING - GEF 
AFRICAN CONSUMER FUND 
 
REFS: (A) STATE 27714  (B) 07 NAIROBI 4443 (NOTAL) 
 
¶1.  U.S. Mission Kenya appreciates having the opportunity to comment 
on OPIC's proposed loan guaranty for a $150 million private equity 
fund entitled the "GEF African Consumer Fund."  As ref A explains, 
the fund will provide investment capital for established, high 
growth companies involved in the consumer goods and services 
sectors.  For additional context, please see ref B, which reports on 
a meeting held by Econ/C in November 2007 with one of the founders 
of the GEF African Consumer Fund. 
 
¶2.  On March 26, Econoff spoke with a representative of the fund's 
implementing partner, the African Management Services Company 
(AMSCO), which has its East Africa branch office in Nairobi. 
Lovelace Kwasa, a senior project manager with AMSCO since 2002, said 
her company supports the development of a broad spectrum of 
businesses throughout the region.  Its focus, however, is developing 
capacity for the financial services sector, thereby enabling banks 
and other lending institutions to more readily provide loans to 
small and medium enterprises (SMEs).  AMSCO specifically assists 
financial institutions which offer affordable banking services to 
borrowers not serviced by big banks.  (Note: a 2006 study of Kenyan 
borrowers concluded that only 26.4% of Kenya's estimated 17.4 
million adults used the formal banking system.  The study asserted 
that Kenya needed a "deepening" of its financial sector in order to 
serve more potential clients. End Note.) 
 
¶3.  In addition to financial services, AMSCO provides management and 
capacity building expertise to African businesses.  Kwasa explained 
that AMSCO places experienced managers with African companies 
interested in expanding their operations but lacking professional 
capacity.  "Our goal is to assist local companies to become 
competitive, both nationally and internationally," she said. 
 
¶4.  At present, AMSCO is funding financial institutions and 
providing managerial expertise to firms in Kenya, Uganda, Tanzania, 
Rwanda, and Southern Sudan.  AMSCO intends to begin operations in 
Ethiopia, Madagascar, and Mauritius by the end of 2008.  Kwasa 
outlined its current activities in East Africa: 
 
-- In Tanzania, AMSCO is supporting the establishment of a privately 
owned and operated halal abattoir, which Kwasa claimed would be 
capable of processing three times the amount of meat slaughtered by 
the Kenya Meat Commission (KMC).  AMSCO is also involved in 
developing Tanzania's dairy industry and is providing technical 
assistance to three locally owned insurance companies. 
 
-- In Uganda, AMSCO is assisting a number of financial, banking, and 
insurance companies.  It is also working with the government in 
improving the local educational system. 
 
-- In Kenya, aside from the financial sector, the firm is directing 
its attention to the export and manufacturing sectors.  Its two 
horticulture clients are 100% locally owned.  AMSCO also supports 
the expansion of Fina Bank-Kenya, which bills itself as Kenya's "SME 
Bank."  In so doing, AMSCO has enhanced the bank's ability to 
provide loans to small-scale business owners, farmers, and ranchers. 
 It continues to second managers to small Kenyan companies eager to 
expand operations.  (Note: Originally known as the "Finance 
Institution of Africa," Fina Bank was the first lending institution 
 
NAIROBI 00000857  002 OF 002 
 
 
in Kenya to provide loans to small borrowers. End Note.) 
 
-- In Southern Sudan and Rwanda, AMSCO continues to make a concerted 
effort to help develop the banking industry and financial sector. 
Its principal Rwandan client is Fina Bank-Rwanda.  Kwasa said AMSCO 
has helped one local bank in Juba open several branch offices (five 
headed by women) and expand its workforce from 100 to 300 employees 
in the past year. 
 
¶5.  To the best of post's knowledge, African Management Services 
Company (AMSCO) has no ties to terrorism, money laundering, 
corruption, and other violations of law.  It is a highly reputable 
company, whose Nairobi branch office reports to the Kenyan Ministry 
of Finance.  The company's sponsoring partners include the United 
Nations Development Program (UNDP), the World Bank's International 
Finance Corporation (IFC), and the African Development Bank.  Its 
East Africa regional manager is Ghanaian Kofi Andah, who holds an 
MBA from Baylor University. 
 
RANNEBERGER