Three European lenders, Norfund, Dutch bank Rabobank and private sector development bank FMO, have joined together to form a $660m investment company providing new capital for investment in banks with retail and SME clients in Eastern and southern Africa.
The new company, named Arise, have combined investments in financial service providers in more than 20 countries including Zambia, Tanzania and Kenya.
Africa’s banking sector is experiencing a new wave of technology, such as mobile payment systems such as Kenya’s M-Pesa, which gives millions of new customer’s access to financial services.
Falling oil and commodity prices over the past two years has damaged the continents economic growth, and dampened interest from overseas investors.
GDP in sub-Saharan Africa for 2016 is forecast at 1.6% by the International Monetary Fund, meaning income per person will fall for the first time in more than 20 years.
However falling commodity prices have not affected all 49 countries in sub-Saharan Africa, according to Nanno Kleiterp, chief executive of Dutch lender FMO.
“For some it has had a positive effect,” he said. “The growth prospects in countries in east Africa are positive and we take a long-term view that this is a good moment to step in and join forces.”
Another financial group, Banco Montepio based in Portugal, is expected to join the new company, Arise, in the future. The company aims to have $1bn of assets invested in domestic financial companies across Africa.
Source: Financial Times