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Rabobank, Norfund, FMO Partner to Launch $660M African Investment Firm

August 8, 2016

A consortium of European investors including Rababank, Norway’s Norfund, and FMO have partnered through the pooling of currently held stakes in several financial service providers (FSPs) in sub-Saharan Africa to create a new investment company to be called Arise.

With a presence in more than 20 African countries and $660 million in initial assets, Arise plans to begin operations starting January 2017, allocating new capital investments to strengthen FSPs serving rural SMEs and those with no previous access to financial services, eventual growing to a $1 billion institution.

With a €9.3 billion (US$10.3 billion) portfolio across 85 countries, FMO is one of the largest private sector development banks in the world, while Norfund, which was established by the Norwegian Parliament in 1997, has a portfolio of US$1.8 billion (€1.6 billion), of which 53% is deployed across sub-Saharan Africa.

“Rabobank’s activities in investing and building strong financial service providers in emerging economies, especially Sub-Saharan Africa, truly fit our Banking for Food strategy,” said Berry Marttin, Executive Board Member of Rabobank, who noted to FT the macro trends present in Africa that make it a compelling long-term investment space.

“The population growth projections mean there is upside potential,” he said. “We have a focus on food production and local banks provide access to finance for farmers which will support that development.”

Although crashing oil and commodity prices have had a cooling effect on many African economies over the past few years, Africa’s banking sector is seeing a resurgence as technology meets finance through mobile payment and banking systems, providing financial access to millions of previously unconnected customers.

“For some it (the fall in commodity prices) has had a positive effect,” Nanno Kleiterp, CEO of FMO told FT. “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.”

Geeks Aafrika reports that Arise plans to acquire a 14.6% stake in Banque Populaire de Rwanda (BPR), Rwanda’s second largest bank by assets, which announced that with the backing from the consortium, it will invest along the entire agricultural value chain, from pre to post-harvest.

“We want to improve BPR and add value to SMEs, and to invest in the agriculture sector which has not been getting support,” said Sanjeev Anand, managing director of BPR.

In the future, Portugal’s Banco Montepio is also expected to join the Arise partnership in a minority capacity.

“We are very happy that we will become a part of the new company, Arise, in the near future, said José Morgado, CEO of Banco Montepio. “Africa has always been an important market for us and being involved in a company with this type of network and focus really represents added value.”

 

 

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