Private Equity: Norfund, FMO and Rabobank join forces and invest in financial institutions to support growth in Africa

LAGOS, Nigeria, Capital Markets in Africa: Norfund, FMO and Rabobank have entered into a partnership to reaffirm their long-term commitment to Africa’s future development, growth potential, and the local financial sector. The partners are committed to strengthening and develop effective, inclusive financial systems in Africa. It is also envisioned that Banco Montepio, a financial group based in Portugal with banking investments in Africa, will join the partnership in the near future.

The partners currently hold stakes in several financial service providers (FSPs) in Sub-Saharan Africa which they have agreed to pool together. The new company, to be named Arise, will start with a presence in over 20 countries, USD 660 million in assets and is anticipated to grow to USD 1 billion. Arise will take and manage minority stakes in African FSPs. The key ambition is to build strong and stable FSPs that will serve retail, Small and Medium Enterprises (SMEs), the rural sector, and clients who have not previously had access to financial services.

Norfund, FMO, and Rabobank have been active in Africa for many years with a positive impact in local markets. Through Arise, the partners will continue to adequately support the growth and development of the FSPs by providing among others technical assistance and management services in the field of governance, management, marketing, innovation, compliance and risk management. Capital will also be allocated for new investments. Arise will be operational from 1 January 2017.

Berry Marttin, Executive Board Member of Rabobank: “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; focused on creating solutions for our clients to feed the world in 2050. It is therefore very important to us to take this approach to a higher level. By joining forces and pooling assets, networks and expertise with Norfund and FMO, two highly experienced development institutions of excellent reputation, we are taking a major step forward.”

Kjell Roland, CEO at Norfund: “Norfund invests in financial institutions to strengthen their ability to supply capital and financial services to SMEs and unbanked people in Sub-Saharan Africa and thereby contribute to economic growth and poverty reduction. The establishment of Arise will contribute to the development of the financial sector in Africa on a scale which is far beyond what Norfund can achieve by itself. By partnering with experienced, like-minded investors such as FMO and Rabobank, will ensure that Arise benefits from excellent banking, technical and managerial expertise.”

Nanno Kleiterp, CEO at FMO: “FMO is proud to co-create a unique platform for investing in African banks with Norfund and Rabobank. Arise can leverage the extensive banking knowledge and valuable agri-banking expertise of its founding partners. This partnership will increase the availability of financial services to small and medium enterprises. Above all, it will allow the people in Sub-Saharan Africa to empower themselves by getting bank accounts and taking loans and thus building a better life for their families.”

José Morgado, CEO at Banco Montepio: “We are very happy that we will become a part of the new company, Arise, in the near future. 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. With this partnership, we are executing another step in our Strategic Plan.”

The transaction is subject to regulatory approvals being obtained, both at shareholder level as well as at the various underlying investee levels.