AfricInvest Financial Sector Fund LLC

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Africinvest Financial Sector Fund (AFS) was launched in 2007 with the aim to contribute to the development of the African financial sector in less developed markets and post-conflict countries, and to enhance the structure and diversify the financial sector in more mature African markets.  It does so by investing in following sub-sectors of the financial sector : banks (with a focus on smaller SME banks), non-banking financial institutions with a focus on leasing, insurance companies and microfinance, including greenfield projects.  AFS has currently a € 31 million size and has so far done 13 investments.  The portfolio to date shows a nice geographic diversification, as these investments were done in 9 different countries.   67 % of the realized investments were done in Least Developed Countries or a Low Income Country, the remainder being in Nigeria, a Lower Middle Income Country.  79 % is invested in focus countries for BIO, the rest being in eligible countries.

In December 2013, BIO signed a € 5 million participation in a new closing of AFS to extend both size and duration of the Fund, and hence ensure the continuity of the project. The aim is to increase the size of the fund would be increased from € 31 million to € 50-60 million and the duration will be extended to 2022.

BIO’s investment contributes to :

  • Provision of additional mid to long-term capital to financial institutions which will a.o. enable them to keep up with increasing Capital Adequacy Ratios.  This aspect is further reinforced by the scarcity of equity providers for smaller financial institutions in Sub-Saharan Africa.  Our commitment will ensure the continuity of an institution that has already proven its added value in this area.
  • Institution building and company development of the financial institutions AFS invests in.  The concrete support by the Manager materializes in many different ways : reinforcement of the governance, thereby solving conflicts of interest, help in the recruitment of senior management and  organization of needed trainings, support the upgrade of the processes and information systems, offer guidance in defining a growth strategy and in identifying new products and channels, intermediation to diversify sources of funding, assistance in the selection of strategic partners.
  • Improvement of financial inclusion, by increasing the quantity and quality of financial services offered to the local population and businesses.
  • Job creation, directly at the level of financial institutions the Fund invests in, but even more indirectly at the level of the final beneficiaries of the supported financial institutions (i.e. micro, small and medium enterprises).
  • Generation of fiscal revenues for the local governments at the level of the investee companies

BIO has also subsidized a € 100.000 technical assistance project.

Website : www.africinvest.com

  • Investment amount (€):

    € 5 M

    Registered office: Mauritius Beneficiary Countries: Various Low Income Countries, and Lower Middle Income Countries in Africa

  • Contract signature :

    2013

  • Nature of intervention :

    Equity

  • Development impacts :

    • 1 — Local economic growth
    • 2 — Private sector consolidation/innovation
    • 3 — Financial inclusion