NMBZ shareholders FMO of the Netherlands and Norfund of Norway have joined forces with Rabobank of the Netherlands to pool their investments in financial institutions across Africa. The new company formed out of the partnership will be called Arise.
Arise will have a presence in 20 African countries and capital will be allocated to support current investee companies as well as new minority investments in the market.
Banco Montepio, a Portuguese financial group with banking investments in Africa, is expected to join the partnership in the near future.
Norfund, FMO and Rabobank, in a joint statement, said their teaming up reaffirmed their long-term commitment to Africa’s future development, growth potential and the local financial sector. They currently hold stakes in several financial service providers (FSPs) in Sub-Saharan Africa which they have agreed to pool together.
They said that as a pro-active shareholder they would engage in a hands-on manner with NMBZ to help it grow and realise its ambitions. The partnership was committed to strengthening and developing effective inclusive financial systems in Africa with a long-term perspective, they said.
FMO is one of the largest bilateral private sector development banks in the world with a committed portfolio of EUR 9,3 billion spanning 85 countries. Norfund, on the other hand has a portfolio of approximately USD1,8 billion, 53% of which is in Sub-Saharan Africa.
NMBZ chief executive Benefit Washaya has welcomed the partnership, which, he said, should enable NMBZ to benefit from a wide network of other African banks that are part of the group.
“NMBZ is excited and welcomes this partnership as an important shareholder for our company and as an important contributor to building a stronger financial sector in Sub-Saharan Africa. NMBZ will also benefit from a wide network of other African banks that are part of this group,” he said.
The ambition of the partnership is to build strong, locally owned FSPs that serve small and medium enterprises (SMEs), the rural sector and clients who have not previously had access to financial services.
For NMBZ, the change will offer several opportunities. The bank will become part of a large pan‑African Bank network. The presence of the new foreign shareholders will assist NMBZ in its quest for much needed lines of credit.
The partnership will be a proactive shareholder, just as FMO and Norfund have been, providing knowledgeable board members and dedicated experts to support NMBZ’s growth strategies.
Current technical and management services programmes run by Norfund and FMO will continue, while new programmes can leverage on the added expertise of the new partners. The partnership, which will be firmly rooted in Africa, will result in consolidation of the partners’ respective portfolios, by the creation of an investment and development vehicle under joint-ownership.
The transaction is subject to regulatory approvals being obtained both at shareholder level and at the various underlying investee levels.
Commenting on the proposed partnership, Norfund chief executive Kjell Roland said the establishment of Arise would contribute to the financial sector in Africa on a scale far beyond what Norfund could achieve on its own.
“Partnering with experienced like-minded investors such as FMO and Rabobank will ensure that Arise benefits from excellent banking, technical and managerial expertise,” he said.
FMO chief executive Nanno Kleiterp said Arise would be able to leverage the extensive banking knowledge and valuable agri-banking expertise of its founding partners.
Gh fall, it will allow the people in Sub-Saharan Africa to empower themselves by getting bank accounts and taking loans and hence building a better life for their families,” he said.
Rabobank executive board member Berry Marttin said Rabobank’s activities in investing and building strong financial service providers in emerging economies, especially Sub-Saharan Africa, fit its Banking for Food strategy, which is focused on creating solutions with its clients to feed the world in 2050.
“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 said.