AfricInvest Financial Inclusion Vehicle
The SDG Frontier Fund has committed EUR 3.2 M in equity in FIVE, an evergreen investment fund focusing on financial inclusion in Africa.
Amount
€ 3,200,000.00
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.).
-
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
Situation at the time of investment
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
Other investments by
SDG Frontier Fund
- Navis Asia Credit Fund LP (Equity) $ 5,000,000.00 (2024)
- Omnivore Agritech & Climate Sustainability Fund III (Equity) $ 3,500,000.00 (2023)
- TIDE Africa II Fund (Equity) $ 2,500,000.00 (2022)
- Uhuru Growth Fund I-A SCP (Equity) $ 2,500,000.00 (2022)
- Ezdehar Mid-Cap Fund II (Equity) $ 1,700,000.00 (2021)
- Cathay Africinvest Innovation Fund (Equity) € 4,000,000.00 (2021)
- Incofin India Progress Fund (Equity) € 3,500,000.00 (2021)
- Ascent Rift Valley Fund II (Equity) $ 4,000,000.00 (2020)
- African Rivers Fund III (Equity) $ 1,700,000.00 (2020)
- Excelsior Capital Vietnam Partners (Equity) $ 2,200,000.00 (2020)
- South Asia Growth Fund II (Equity) $ 2,200,000.00 (2020)
Made possible through this investment
Bizao
Côte d'Ivoire
Bizao is a payment service infrastructure provider for businesses in a B2B2C scheme.
CFG Bank
Morocco
Commercial bank in Morocco, providing corporate and retail services.
Fidelity Bank Ghana Limited
Ghana
Launched in 2006, Fidelity Bank started as a discount house which has now grown to be a top-tier bank in Ghana.
I&M Rwanda
Rwanda
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.
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.
Moove
Nigeria
Digital vehicle financing services company.
Onafriq (formerly MFS Africa)
South Africa
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.
Prime Bank
Kenya
Kenyan commercial bank offering corporate, SME, and retail banking services with 20+ branches in the country.
Raynal Assurances IARD
Burkina Faso
Established in 2006, Raynal underwrites non-life insurance in Burkina Faso
for risks associated to automotive, health, accident, fire, etc. The Company is
ranked among the top 3 players in its market. The Company is mainly active on the corporate segment (with a focus on Automobile and Health) while a diversification to corporate multi-risk and retail segments is ongoing.
Regic - Royal Exchange General Insurance Company
Nigeria
The Company is a top tier non-life insurance company that used to be part of the
oldest insurance group in Nigeria (1918). The Company has launched its retail strategy through digital channels, targeting in priority the agriculture insurance for the small farmers.
Read impact and news about this project
News
SDG Frontier Fund Final Closing
29-04-2022
First-of-its-kind Belgian impact fund mobilises additional private resources to support African and Asian SMEs in their growth.
News
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31-08-2021
Money is getting greener. The superlative in sustainable investing today is "impact investing". A growing global market that is already worth more than $700 billion.
Article originally appeared in MT Magazine in Dutch.
News
Repousser les frontières des investissements durables
15-12-2020
An interview with Luuk Zonneveld, An-Heleen De Greef & Eric Van den Bosch on the SDG Frontier Fund, published in L'Eventail on the 10th of December 2020, written by Cédric Boitte.
This article was published in French.
News
You'll never make the world sustainable with only public money
02-07-2020
Financial return is worth twice as much if it also helps the world move forward. The Belgian government and business world collect 50 million euros for sustainable investments in the African and Asian private sector. "Investing is better than giving," says driving force Alexander De Croo, Minister of Development Cooperation. "You will only see a return on your investment if it has really made a difference."
News
SDG Frontier Fund first closing
02-07-2020
First-of-its-kind Belgian impact fund brings together 9 private investors to support sustainable economic growth in African and Asian frontier markets.
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Equity
