Investment AB Kinnevik, a Stockholm-based international investment firm, announced that it has invested USD 14 million in the African microfinance institution (MFI) Bayport Financial Services. The financing is provided as a combination of debt and equity.
As of June 2007, Investment AB Kinnevik held USD 3.96 billion (SEK 25.6 billion) in total assets. Shareholders’ equity and liabilities also totaled USD 3.96 billion. The Parent Company manages a portfolio focused around three areas: Major Listed Holdings, including Millicom International Cellular, Tele2 and Transcom Worldwide; Major Unlisted Holdings, including the cardboard and paper company Korsnäs; and New Ventures, which actively finds and invests in small- and mid-sized companies with considerable growth potential.
According to a Kinnevik press release, the financing of Bayport is the second major investment in the area of New Ventures for Kinnevik this year. In May, the firm invested in Gateway TV, a company which offers satellite-based pay-TV services in Sub-Saharan Africa. It is expected that the service will be available in 8 countries by the end of 2007. In total, Kinnevik has invested USD 124 million (SEK 800 million) in New Ventures, and the market value of new ventures at the end of second quarter 2007 was approximately USD 150 million (SEK 969 million).
Bayport, founded in 2002, currently has 1,000 employees and 61 branches in Zambia, Tanzania, South Africa, Ghana and Uganda. Bayport serves 150,000 clients, the majority of whom are employed but are unable to access conventional sources of credit. About 20 percent of the MFI’s clients are civil servants who live in rural villages. Bayport deploys teams that travel to villages to disperse loans to people who would otherwise be unable to access financial services.
Bayport clients use the loans for a variety of purposes. Thirty to 40 percent take out loans to pay for education. Twenty percent borrow to fund home improvements. The rest of the loans serve various functions, including funding small businesses and consolidating more expensive debt.
Bayport’s loans range in size from just USD 20 up to USD 1,500. The average loan issued is USD 250–no small amount considering that a teacher in Zambia earns just USD 200 per month. Annual interest is between 70 and 90 percent. The MFI’s repayment terms range from one to 36 months, and repayment rates are high (96.5 percent in Zambia).
No further financial information on Bayport is currently available.
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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