On 4 October, the pan-African private equity firm, AfricInvest, announced the second close of FIVE, a revolving platform for investing in financial institutions in Africa. Through its investments, FIVE aims to improve access to financial services for the growing African population, while achieving attractive financial returns for its investors.
IFU joined this second investment round together with Norfund and Central Bank of Kenya Pension Fund. FMO and BIO, the development finance institutions of the Netherlands and Belgium, respectively, anchored the fund as initial investors in December 2017.
Promoting financial inclusion
The second closing brings FIVE’s total commitments to EUR 61m. The fund is targeting a third closing in the next few months, and subsequent closings will also take place over the next three to five years to reach the fund’s target size of EUR 200m. IFU’s commitment is in the amount of EUR 10m.
– The new commitments of Norfund, IFU and Central Bank of Kenya Pension Fund represent an important step in the life of FIVE. Each institution brings with them long and valuable experience investing in financial institutions in Africa. Their collective commitments will help support FIVE’s objective of universal access to financial services on the African continent, where the current banking penetration still remains below 20%, said Mehdi Gharbi, Senior Partner at AfricInvest.
– In Africa, many entrepreneurs – especially female – are prevented from improving their business and livelihood due to the lack of access to finance. By investing in FIVE, we have teamed up with an experienced and responsible partner that can promote financial inclusion and access to finance for African SMEs, which will help Africa to grow,” said Morten Elkjær, Vice President, Finance Sector at IFU.
FIVE stands for Financial Inclusion Vehicle. The number five represents the aspiration of AfricInvest and FIVE’s investors to contribute to achieving universal access to financial services in Africa. As the current level of banking penetration on the continent is a mere 20%, achieving universal access will require a fivefold increase. Digital transformation is one of the key drivers toward the universal access and as such, FIVE seeks to enhance the digital strategies of its portfolio companies.
AfricInvest was founded in 1994 and is today among the leading private equity firms in North and Sub-Saharan Africa with around 1.5 billion USD of assets under management across 18 PE funds. and sponsored by prestigious DFIs, private and institutional investors from Africa, Asia, Europe and North America.