AfriCap Microfinance Fund, established in 2001 as the first African private equity fund dedicated to the microfinance industry, has closed a second round of investment, raising its capital from USD 14 million (Sh 910 million) to USD 50 million (Sh 3.25 billion). The Mauritius-based firm also announced that it has transformed into a private equity investment company and changed its name to AfriCap Microfinance Investment Company.
Over the past six years, AfriCap has invested in 13 microfinance institutions (MFIs) across Africa, including USD 1 million in loans and debt securities to PRIDE Uganda and a USD 1.59 million equity stake in Equity Bank in Kenya. The two exits generated by AfriCap since its founding averaged a return (IRR) of over 30 percent. AfriCap also participated in the listing of Equity Bank, the first initial public offering (IPO) of an African MFI.
Recapitalization received strong support from investors, particularly from initial shareholders including Calmeadow, a Canadian non-profit organization, AfriCap Sweden, a private-sector consortium founded for the purpose of investing in AfriCap, ACCIÓN International, a leading non-profit microfinance organization, the European Investment Bank (EIB), the European Union’s non-profit, policy-guided financial institution, and the Netherlands Development Finance Company (FMO), a development bank established by the Dutch government to invest in private sector projects in emerging markets. Existing shareholders provided approximately 35 percent of AfriCap’s new capital.
Some early investors in the fund opted to exit through sale of their shares. The exit generated a 14 percent return for these early investors, including Société Belge Pour Le Développement International, the DOEN Foundation, CORDAID and the Argridius Foundation.
The transaction also attracted additional development organizations including FinFund, NorFund and SwedFund, as well as significant private investors such as Nordic MicroCap, BlueOrchard Private Equity and the Gray Ghost Fund.
BlueOrchard is a group of Swiss companies specializing in the management of microfinance investment products. As of February 2007, BlueOrchard had investments in 68 MFIs in 24 countries around the world and USD 162 million in total assets. Gray Ghost Fund is a privately-owned fund of funds which focuses exclusively on investing in microfinance funds that supply capital to MFIs. Its total assets are valued at USD 75 million. As of September 2006, its investments totaled USD 44.3 million.
To learn more about this author, visit David Satterthwaite's Website.
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David Satterthwaite
(Visit David's Website)
David brings 10 years of experience in
microfinance management, social
entrepreneurship, non-profit
management/fund-raising and microfinance
investment research.
David is the Chairman and President of
Prisma Microfinance, Inc., a retail
“microbank” operating in Central America.
He is also Chief Editor of
MicroCapital.org, a news and information
service for the microfinance community and
its investors. Each month,
MicroCapital.org publishes the
MicroCapital Monitor, the leading industry
newspaper.
David writes and speaks frequently on
microfinance. He has been a quest speaker
at many events, including: Microcredit
Summit 5+: Panel on Private Investment,
Milken Institute Global Conference, United
Nations Year of Microcredit Symposium for
Wall Street, Chicago Conference on
Microfinance, Harvard Social Enterprise
Conference, Dartmouth’s Business
Sustainability Conference, Wharton’s
Conference on Social Entrepreneurship,
Stanford’s Social Enterprise Club,
Columbia’s Social Enterprise Program and
the Net Impact Annual Conference. Through
his work with Prisma and MicroCapital, he
has been featured or quoted in The Wall
Street Journal, the Boston Globe, “All
Things Considered,” Reuters and
SocialFunds.com. David has been
recognized with the Compaq Computer
Corporation Leadership Award, the City
Year Inspiring Leader Award and the
National Social Venture Business Plan
Competition award for Best Social Impact
Analysis.
David has supported many non-profit and
for-profit social enterprises in different
capacities, including Access Technology
Learning Center, Agora Partnerships,
Bridges to Business, City Year, Fonkoze,
Kiva and National Social Venture
Competition.
David holds a B.A. with Honors in
Political Science from Haverford College.
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