AfriCap Microfinance Fund
Building on the successful experience with ProFund and our growing expertise in African microfinance, CALMEADOW and ACCION jointly sponsored the establishment of a US$13,500,000 microfinance investment fund and a US$3,000,000 Technical Services Facility to invest in and support African microfinance institutions. AfriCap became operational in October of 2001.
CALMEADOW, through a wholly owned subsidiary, is the fund manager of AfriCap. The Fund’s operating base is in Johannesburg, South Africa, with Wagane Diouf as investment manager together with a team of three microfinance professionals. The investment strategy is similar to that of ProFund. AfriCap seeks appropriate returns on its investments while contributing to the legitimization of the microfinance industry in Africa and the expansion of sustainable MFIs delivering financial services throughout the region.
CALMEADOW Executive Director Alex Silva heads the AfriCap Investment Committee, which is in the process of building a diversified portfolio of companies covering all regions of the continent and a variety of institutional models including transforming NGOs (Uganda, Tanzania), entrepreneurial microfinance banks (Kenya, Ghana, Mozambique), bank downscaling operations (Nigeria, Senegal) and greenfield operations (Madagascar, QFI). Within its first four years of existence, AfriCap already returned US$1,000,000 to investors. Portfolio companies all showed a profit in 2005 and for the most part have shown significant growth. The pipeline is steadily growing, with projects in Sierra Leone, Burkina Fasso, Cameroon, DRC, Rwanda, Angola, Malawi and South Africa.
AfriCap is uniquely positioned among Funds in that its operating base is in Africa, close to the markets in which it invests. Furthermore, AfriCap focuses its experience and human resources, both at management and board levels, exclusively on Africa. AfriCap is one of the few private equity players in Africa positioned as a value enhancer, investing in early stage or growth microfinance institutions as a significant minority investor and seeking to enhance the value of the institutions via technical assistance and governance. In addition to providing institutional support during the past year to EBL (Kenya), PML (Uganda), FASL (Ghana), Socremo (Mozambique), CBAO (Senegal), Union Trust Bank (Sierra Leone) and EQI (Egypt), AfriCap’s Technical Support Facility has successfully managed the FERLO project, the AfriCap Network Project, the HIV/AIDS project and the Kumassi Metal Workers environmental project.
The challenges facing the microentrepreneur in Africa are often daunting. Providing ready access to credit and other financial services is an important way to support this critical sector of the local economy. Through CALMEADOW’s strategic provision of capital and technical advisory support, we believe we can accelerate the development of the microfinance industry through direct investment and demonstration effect to others, potentially bringing financial services to millions of small-scale enterprises throughout the region.
Visit the AfriCap website: www.africapfund.com
CAPITAL INITIATIVES PROFUND HOME
CALMEADOW DOWNSCALING AND MARKET DEVELOPMENT INITIATIVES