Investment represents ECP's seventh commitment to growing African financial
services sector
WASHINGTON, June 4 /PRNewswire/ -- Emerging Capital Partners (ECP), an
international private equity firm focused on investing across the African
continent, today announced a $15 million investment in Blue Financial Services
Ltd., a non-deposit taking micro lender serving 10 countries in
sub-Saharan Africa. ECP's investment, made in the form of convertible bonds
and common shares, is part of Blue Financial's ongoing capital raising program
to generate working capital and expand operations. The company is listed on
the Alternative Exchange Index of the JSE Securities Exchange.
With the exception of South Africa, most sub-Saharan nations have banking
penetration rates between 5 percent and 10 percent, which leaves the vast
majority of people without access to retail banking services. As a result,
microfinance institutions serving this population have become increasingly
popular and are evolving to encompass a wide range of financial services
including savings, insurance, payment services and remittances. For example,
Blue Financial partners with governments and corporations to provide their
employees with personal and home improvement loans, mortgages, funeral
insurance, and access to telecom services. Most repayments are made via direct
debits or payroll deductions, which provide Blue Financial with a 97 percent
collection rate.
"Blue Financial's proven business model and the opportunity for growth
across sub-Saharan Africa make the company an attractive private equity
investment," said Tom Gibian, chief executive officer of ECP. "The company
also fits well into ECP's philosophy of investing in established, profitable
businesses and successful management teams that need an inflow of capital in
order to expand their operations."
Since its inception in 2001, Blue Financial has grown to include over $140
million in assets and 190 branches throughout South Africa, Botswana, Namibia,
Zambia, Malawi, Uganda, Tanzania, Kenya, Cameroon and Lesotho. The company
plans to launch operations in Nigeria this month through a joint venture with
Intercontinental Bank Plc, one of the largest banks in Nigeria and a portfolio
company of ECP. Blue is also actively seeking other expansion opportunities
throughout the continent.
"ECP has a long and successful history of investing in the African
financial services sector through our prior commitments in commercial banking
and insurance businesses," said Genevieve Sangudi, managing director of ECP.
"We have studied the success of microfinance institutions throughout Africa,
and we believe that Blue Financial is well poised to expand upon its position
as a leading multinational micro lender."
The investment in Blue Financial was made through ECP's $523 million ECP
Africa Fund II. The fund was established in December 2005 to capitalize on the
numerous investment opportunities throughout Africa in sectors such as
telecom, natural resources, financial services, agribusiness, transportation,
and power and water.
ABOUT ECP
Emerging Capital Partners (ECP) is the first private equity firm to raise
more than $1.2 billion to invest in companies across the African continent.
The ECP team has an eight-year track record of pan-African investing. The
firm's investment strategy is focused on delivering consistently above-market
returns to investors that are uncorrelated to the U.S. and other global
economies. For more information, please see www.ecpinvestments.com.
SOURCE Emerging Capital Partners
Jennifer Gill, FD for ECP, +1-212-850-5691, jennifer.gill@fd.com
