AfricInvest Financial Inclusion Vehicle
BIO has committed EUR 10,000,000 in equity in FIVE, an evergreen investment fund focusing on financial inclusion in Africa.
Amount
€ 10,000,000.00
Type of investment
Equity
Development impacts
- Local economic growth
- Private sector consolidation/innovation
- Financial inclusion
Beneficiary locations
Investment field
Investment Companies & Funds
Activity
Organisation
AfricInvest Financial Inclusion Vehicle
Website
https://www.africinvest.com/Domicile
Africinvest Financial Investment Vehicle (“FIVE” or the “Fund”, previously called AfricInvest Financial Sector Holding) is an evergreen investment fund focusing on financial inclusion in Africa that was launched in 2017. The initial strategy focusing on established African mid-size banks, insurers and Non-Banking Financial Institutions has further evolved with the market to now also include fintech companies.
The main particularity and innovation of this Fund is its evergreen character, i.e. no initially fixed end date. The rationale is that more time is needed to get the most out of investments in the financial sector (compared to most other sectors). For instance, the process to obtain a banking license from local Central Banks can be very long. Hence the objective to bring the average holding period with this evergreen structure to 7 to 8 years compared to the often too short 4 years on average with a closed-end fund. Given the evergreen nature of the project, special attention was given in the structuring of the project to :
- Creation of sufficient liquidity/exit opportunities for investors.
- Definition of a fair incentive scheme ensuring alignment of interest between investors and fund manager.
Development impacts
-
Local economic growth
Provision of additional mid to long-term capital to financial institutions which will a.o. enable them to grow their activities and keep up with increasing capital adequacy ratios. This aspect is further reinforced by the fact that there are currently not a lot of equity providers for smaller financial institutions in Sub-Saharan Africa.
Job creation and generation of fiscal revenues.
Fintechs allow underserved populations to access services (bank services, insurances, remittance services, leasing, etc.), improving quality of life at lower costs and efforts.
-
Private sector consolidation/innovation
FIVE is the first and only evergreen fund focusing on the financial sector in Africa, capable of accompanying an investee for longer than classic closed-end vehicles. ·
Now partly focussing on fintechs, FIVE will support the private sector in taking advantage and further developing the digital revolution which allows for simplified, faster, more cost-efficient and numerous transactions and operations.
Institution building and company development of the financial institutions FIVE invests in. The concrete support by the Manager can materialise in many different ways (governance, recruitment, training, process/IT upgrades, etc.).
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Financial inclusion
Increasing the quantity and quality of financial services offered to the local population and businesses.
Investing in fintechs, thanks to the increasing mobile and internet penetration, will help make basic financial services, which normally require travel to a certain location, accessible to unserved/remote populations who cannot afford such a trip or the time associated with such an operation. Also, the lower operational costs associated with fintechs allow the service provider to reduce its tariffs and ask for fewer guarantees.
E&S Impact
Current situation
The fund has a comprehensive Environmental and Social Management System (ESMS), built over time with the input of several Development Financial Institutions. It ensures that E&S risks are assessed and mitigated at all steps of the investment process. It is managed by a professional team and implemented via a set of dedicated E&S tools. As such, no E&S improvements are required.
Risk Category: B
Made possible through this investment
MFS Africa
K.66.190 Means of payment
A licensed company providing Pan African B2B2C payment infrastructure that provides a single access point to a Pan African payment ecosystem and a large number of use-cases including remittances into and intra-Africa as well as cross-border and local collections and payouts through all major mobile money schemes.
Moove
K.64.91 Financial leasing
Moove is a Nigerian-born global start-up and the world’s first mobility fintech, providing revenue-based vehicle financing and financial services to mobility entrepreneurs. By embedding its alternative credit scoring technology onto ride-hailing, instant delivery, and e-logistics platforms, Moove can use proprietary performance and revenue analytics to underwrite loans to drivers that have previously been excluded from financial services. Moove provides financing for three product categories - cars, trucks and motorbikes.
Raynal Assurances IARD
Burkina Faso
K.65.12 Non-life insurance
RAYNAL Assurances IARD is an insurance company incorporated in 2005 and headquartered in Ouagadougou (Burkina Faso). The Company underwrites a large range of non-life insurance risks associated to automotive, health, accident, fire, transport, and other multi-risks, addressing a clientele composed of both corporate and retail customers. Driven by a culture of service and innovation, RAYNAL Assurances IARD experienced a steady growth over the years to become the third-largest non-life insurer in Burkina Faso with a market share exceeding 13%.
Regic - Royal Exchange General Insurance Company
Nigeria
K.65.12 Non-life insurance
The Company is a non life insurance company that used to be part of the oldest insurance group in Nigeria (1918). Ranked number 6 in the Market in terms of GWP with one of the lowest claim ratio in Nigeria. It has launched its retail strategy through digital channels, targeting in priority the agriculture insurance for the small farmers.
CFG Bank
Morocco
K.64.190 Commercial banking
Commercial bank in Morocco, providing corporate and retail services.
InstaDeep
Tunisia
J.63.99 Other information service activities n.e.c.
Founded in 2014, InstaDeep makes use of AI to help businesses make complex decisions by having developed an expertise in machine learning, reinforcement deep learning, computer vision and predictive analysis offering complete and customized end-to-end solutions.
I&M Rwanda
Rwanda
K.64.190 Commercial banking
Incorporated in 1963 as the first commercial bank in Rwanda, today the Bank is publicly listed on the Rwandan Stock Exchange. The Bank is a subsidiary of I&M Holdings. The bank is a top-tier bank in Rwanda with a strong position in the corporate and higher-tier SME segments, while being a leading bank in mortgage financing.
Prime Bank
Kenya
K.64.190 Commercial banking
A Kenyan commercial bank providing a variety of financial products and services to SME, corporate and retail banking customers. Prime Bank has 21 branches across Kenya and leverages off alternative delivery channels to service its customers. The bank has affiliates in Malawi, Botswana, Mozambique and Zambia and also a Kenyan general insurance company, Tausi Assurance.
Fidelity Bank Ghana Limited
Ghana
K.64.190 Commercial banking
Established in 1998, initially as a discount house, Fidelity Bank obtained its universal banking licence in 2006 and has since grown to be the largest privately-owned Ghanaian bank. Fidelity offers a comprehensive range of innovative products and services in the retail and corporate space, through a steadily growing network of branches and various digital channels.
View more of our investments in this region
Financial Institutions
BRAC International Finance
12,815,000.00
Liberia, Sierra Leone, Tanzania, Uganda
08/11/2024
Debt
