Three organisations, Norfund, Netherlands Development Bank (FMO) and Rabobank, have set aside $1billion to lift the small and medium enterprises (SMEs) food sector in Nigeria and other African countries.
Another firm, Banco Montepio, a financial group based in Portugal with banking investments in Africa, is also expected to join the partnership. The aim is to promote continental economic growth.
Rabobank is a Dutch cooperative bank founded by farmers while Norfund is the Norwegian Investment Fund for Developing Countries.
Norfund, FMO and Rabobank, hold stakes in several financial service providers (FSPs) in sub-Saharan Africa, which they have agreed to pool together.
The firms have resolved to start a new company, to be named Arise. The company will start in over 20 countries, a $660 million in assets and it is expected to grow to $1 billion. Arise will take and manage minority stakes in African FSPs.
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 January 1 next year.
Executive Director, Rabobank, Berry Marttin said: “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 with 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,” he added.
On the partnership, Chief Executive Norfund, Kjell Roland said: “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.
