Banks and microfinance institutions depend on equity and debt in order to extend loans to their customers. These financial service providers need capital to develop products and increase their market reach. They also need to make costly but crucial capital investments, for example in IT systems.

Norfund strategy

Norfund invests primarily in commercial banks and microfinance institutions, but also in non-bank financial institutions like leasing, housing finance and factoring. Our focus is particularly to support institutions and business models that target SMEs and mass market financial inclusion.

About 50% of world adult population lack access to financial service.

Norfund offers long-term financing and gives priority to equity investments. However, we may also provide senior or subordinated debt depending on the type of institution, geography and its financing needs.

In 2018, Norfund signed 17 investments in this sector – the highest number ever, and double the amount committed in 2017.



Norfund’s target investments include locally-owned medium-sized and large bank institutions that are focused on serving SMEs, the retail market, and clients who have not previously had access to financial services. The banking sector in poor countries is often underdeveloped, characterised by a large number of relatively small local banks with high costs, high margins and limited services to SMEs. Therefore, we aim to create efficient, scalable banks that can provide more targeted and less expensive services to SMEs and individuals through a reduction in sector costs and increased capabilities. 

In Sub-Saharan Africa, Norfund's direct equity investments in banks are primarily targeted through our investment company Arise.


Microfinance Institutions 

Microfinance include financial services offered to low-income individuals and micro-companies that do not otherwise have access to traditional banking services. Microfinance services usually include microcredit, deposits and insurance. Microfinance institutions (MFIs) range in size from small non-profit organisations, cooperatives and self-help groups on one hand, to commercial and state banks, insurance companies and specialised microfinance institutions on the other. Norfund's investments in microfinance are primarily targeted through our investments company, the Nordic Microfinance Initiative (NMI) in Africa and parts of Southeast Asia.


Non-bank financial institutions 

Non-Bank Financial Institutions (NBFIs) supplement the services provided by banks and include leasing, factoring, specialized lending and trade finance. Norfund invests in non-bank financial institutions that are dedicated to serving SMEs, such as leasing, factoring and lending institutions. 


Geographical priorities

For direct investments, Norfund focuses on projects in South East Asia (including Bangladesh), Central America as well as Sub-Saharan Africa. In 2018, fifty percent of our investments in Financial Institutions were in Asia, particularly in Myanmar and Bangladesh. 


Example investees

Equity Bank (East Africa)
Arrend (Leasing, Central America)

Myanmar Finance (Microfinance, South East Asia)
Full investment overview