Norfund invests in Financial Institutions to strengthen financial inclusion
total portfolio of Financial Institution
increase in lending to clients in 2020
new clients served i 2019
Why Invest in Financial Institutions?
A well-functioning financial system is crucial for private sector development and job creation.
Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider. Virtually all these unbanked adults live in the developing world. In Sub-Saharan Africa for example, 67 % of the adult population is unbanked. Due to this, investing in broad-based financial institutions and microfinance is a priority for Norfund.
In our strategy 2019-2022, our defined ambitions are:
more extended in loans to clients
What We Invest in
Financial Institutions is Norfund’s second largest investment area. We focus on
- Commercial banks
- Microfinance institutions
- Other financial services, including non-deposit taking lenders, insurance and leasing
Commitments per Sub-Sector as of 2019 (MNOK)
The banking sector in poor countries is often underdeveloped. Therefore, Norfund aims to develop efficient, scalable banks that can provide more targeted and less expensive services to medium sized and large institutions willing to target small and medium sized enterprises (SMEs), the retail market and individuals through a reduction in sector costs and increased capabilities. This may be achieved through a combination of skills development and technology utilization as well as in many cases improved corporate governance.
Microfinance includes financial services offered to low-income individual entrepreneurs and micro-companies without access to traditional banking services. Microfinance services usually include microcredit, deposits and insurance. Norfund invests in commercialized microfinance institutions with the willingness and ability to scale and maximize reach and development impact. Adherence to the Client Protection Principles is a prerequisite.
Non-Bank Financial Institutions
Norfund invests in non-bank financial institutions that are committed to serving SMEs, including insurance, leasing, payment and lending institutions specializing in sectors such as agriculture, infrastructure, education, and housing. Norfund also invests in technology-driven financial institutions.
Where We Invest
Norfund invests in countries where we can have the greatest impact. We prioritise investments in Least Developed Countries and Sub-Saharan Africa.
Commitments per Region as of 2019 (MNOK)
What We Offer
Norfund is an active minority investor. We offer risk capital through equity, loans and funds to companies that meet our requirements.
To maximise financial and developmental success, Norfund strives to be a value adding owner beyond the capital investment. Norfund’s investment teams have extensive experience in project development and governance, and work closely with the partners to develop the companies. Norfund takes a position as an active owner and requires a board seat in equity investments. With more than 20 years' experience of investing in developing countries, Norfund continuously builds and develops the expertise needed to invest and manage risks in order to succeed as an investor.
Norfund invests with or via partners to benefit from their knowledge and expertise. We prefer to partner with large, well-known and respected companies with local presence and a long-term horizon, whose interests align with those of Norfund.
Arise is a bank investment company in Sub-Saharan Africa with a USD 1 billion portfolio of large equity stakes in 10 leading African banks which have top 3 positions in close to 20 African countries. Norfund is the largest shareholder with more than 40 percent of the shares in Arise, and it is Norfund’s main vehicle for equity investments in larger African banks.
NMI was established in 2008 as a Norwegian initiative through a partnership between Norfund and the private investors Ferd, DNB, Storebrand and KLP. NMI has so far delivered both impact and solid returns and our objective is to develop NMI to become a leading Nordic player in the field of microfinance investments.
KLP is Norway’s largest life insurance company is an important strategic financial partner for Norfund. Since 2013, KLP and Norfund have co-invested in several financial institutions and renewable energy projects in developing countries, mainly in Africa