The main objective of investing in financial institutions is to contribute to expanding the range and improving the efficiency of the supply of financial services to private enterprises and individuals who have limited access to such services.
Norfund regards financial institutions as an attractive investment option with good financial returns and strong development effects. Financial institutions are therefore a key investment area for Norfund, particularly with a purpose to facilitate the access of SMEs to financing.
Investments are largely in institutions that are owned locally and that have a promising growth potential. Norfund’s investments are either direct, in the form of loans or equity, or indirect, through investment funds.
Norfund works with banks and other financial institutions that focus on SMEs and in the micro-financing segment. With its partners Ferd, DnB NOR / Vital, Storebrand and KLP, NMI represents Norfund’s key instrument for investment in micro-financing. In addition, Norfund invests in regions where NMI is not active. Norfund has a higher risk investment profile than NMI in the direct investments in micro-financial institutions.
In its work with financial institutions, Norfund is particularly concerned with exercising good corporate governance, providing basic banking competencies and encouraging an improvement in internal control and accounting systems.