Fefisol II

Equity : May 2022

BIO has granted a EUR 3 M loan to FEFISOL II, an FI fund focused primarily on sub-Saharan Africa

Amount

€ 3,000,000.00

Type of investment

Equity

Development impacts

  • Local economic growth
  • Private sector consolidation/innovation
  • Financial inclusion
  • Food security & rural development
  • Promotion of ESG best practices

Beneficiary locations

Middle East & North Africa:
Sub-Saharan Africa: Burkina Faso, Côte d'Ivoire, Democratic Republic of Congo, Kenya, Mali, Niger, Uganda

Investment field

Investment Companies & Funds

Activity

KK.64.302 FI Fund

Organisation

Fefisol II

Domicile

Luxembourg

More investments in

Fefisol II

FEFISOL II, the European Solidarity Financing Fund for Africa II, is a fund that will provide medium to long-term loan financing, essentially in local currency, to African MFIs and agricultural entities, including smallholder producer organisations and small agricultural entities.

Development impacts

  • Local economic growth

    Financing of different MFIs and a strong MSME and agricultural and/or rural outreach, enabling effects expected in terms of job support, value-added and local economic growth

    Financing and strengthening of agricultural entities engaged in the production or processing and sale of agricultural products, which can directly contribute to strengthening the agricultural value chains, creating (rural) employment and fostering local value-added economic growth.

  • Private sector consolidation/innovation

    Focus on the private sector through direct or indirect financing in a widely underserved market.

    More than 75% of the loan portfolio will be invested in Sub-Saharan Africa

    Fund with a strong impact mindset (including clear impact commitments and targets) and supported by social investors with strong knowledge and high experience

    Providing Technical Assistance (TA) to help investees consolidate businesses and guarantee their economic and social viability, including through strengthening their governance, management, and ESG practices, as well as the uptake of environmentally sustainable practices and digitalization of processes and products (for MFIs)

  • Financial inclusion

    Financing MFIs that provide mainly income-generating activities, with at least 50% of their portfolio dedicated to financing rural clients and/or vulnerable populations and/or micro and small enterprises, including in the agricultural sector.  

    Contributing to the diversification of the financial offer

  • Food security & rural development

    Supporting MFIs with a strong rural presence and outreach with high potential in terms of financial inclusion and economic development

    Targeting smallholder producer organizations and agricultural SMEs - agricultural entities - that source over 60% of their raw material from smallholder farmers, supporting economic activities in rural areas and strengthening local agri-value chains, and that target premium and certified markets - especially fair trade and organic.

  • Promotion of ESG best practices

    Widely accepted microfinance standards are promoted and monitored for MFIs, including the Client Protection Principles of SMART campaign

    Focus on agricultural entities with at least one organic or Fairtrade certification (93% in FEFISOL I). TA will support more than 50% of agricultural investees to i.e. provide them certifications, improve their practice and access premium markets.

E&S Impact

Fefisol II will improve the fund’s Environmental and Social Management System (ESMS) to align it to the IFC Performance Standards (IFC PS). Furthermore, the fund manager agreed to extend its exclusion list to the EDFI fossil fuels items, to adopt an E&S due diligence tool dedicated to agri-projects and to develop some basic E&S legal clauses to be included in the contract with its investees. Finally, the fund’s team will attend E&S trainings.

Current situation

The strong focus on positive impact ensures that the fund manager already embeds some E&S aspects into its investment practice, especially with microfinance institutions. It also offers Technical Assistance to help its investees adopt E&S corrective measures.

Risk Category: B

View more of our investments in this region

TowerCo of Africa

Infrastructure

TowerCo of Africa

12,000,000.00

  Uganda

  09/01/2024

  Debt

SIMA Commercial & Industrial Solar Green Bond

Infrastructure

SIMA Commercial & Industrial Solar Green Bond

10,000,000.00

  Kenya, Nigeria, South Africa

  29/12/2023

  Debt

ACEP Group

Financial Institutions

ACEP Group

 4,824.00

  Niger

  28/11/2023

  Subsidy

Alterfin

Investment Companies & Funds

Alterfin

5,000,000.00

  23/10/2023

  Debt

EA Foods Ltd

Enterprises

EA Foods Ltd

 10,448.00

  Tanzania

  09/10/2023

  Subsidy

Poa! Internet

Enterprises

Poa! Internet

13,543.00

  Kenya

  24/08/2023

  Subsidy

Gebana Burkina Faso

Enterprises

Gebana Burkina Faso

 3,000,000.00

  Burkina Faso

  20/07/2023

  Debt

ASA Tanzania

Financial Institutions

ASA Tanzania

7,000,000.00

  Tanzania

  19/07/2023

  Debt

Alterfin

Investment Companies & Funds

Alterfin

 21,500.00

  11/07/2023

  Subsidy