AfricInvest Financial Inclusion Vehicle

Equity : April 2022

The SDG Frontier Fund has committed EUR 3,200,000 in equity in FIVE, an evergreen investment fund focusing on financial inclusion in Africa.

This is an investment by SDG Frontier Fund

Amount

€ 3,200,000.00

Type of investment

Equity

Development impacts

  • Local economic growth
  • Private sector consolidation/innovation
  • Financial inclusion

Beneficiary locations

Middle East & North Africa:
Sub-Saharan Africa:

Investment field

Investment Companies & Funds

Activity

K64.3 Trusts, funds and similar financial entities

Organisation

AfricInvest Financial Inclusion Vehicle

Domicile

Mauritius

More investments in

AfricInvest Financial Inclusion Vehicle

  • Equity € 10,000,000.00 (2022)
  • Equity € 10,000,000.00 (2017)

Other investments by

SDG Frontier Fund

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

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

Thanks to the direct funding from BIO, the following second-line investments have been made possible.

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.

Read impact and news about this project

SDG Frontier Fund Final Closing

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.

Read more
Greener money

News

Greener money

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.

Read more
Repousser les frontières des investissements durables

News

Repousser les frontières des investissements durables

15-12-2020

An interview with Luuk Zonneveld, An-Heleen De Greef & Eric Van Den Bossche on the SDG Frontier Fund, published in Eventail on the 10th of December, written by Cédric Boitte. This article was published in French.

Read more
You'll never make the world sustainable with only public money

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."

Read more
SDG Frontier Fund first closing

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.

Read more