UK-headquartered private equity manager Apis Partners is acquiring a “significant minority stake” in MicroCred Holdings, a global financial institution that provides financial services to under-banked population across seven countries in Africa and Asia. No financial terms for the deal were disclosed, which was expected to close by the end of 2015.
In August 2015, Apis announced that it had received commitments totaling $157 million for its inaugural private equity fund, Apis Growth Fund I, receiving backing from a mix of DFIs, financial institutions and institutional investors. The fund, which is targeting a cap of between $250 million and $300 million, is betting on the rapidly expanding financial services opportunity in Africa and Asia that is being driven by the changing demographic and macroeconomic fundamentals and the structural gaps between supply and demand in those regions.
“Only 50% of the global adult population has access to the formal financial sector, and this figure drops to 24% in Sub-Saharan Africa. However, demand for affordable, high-quality financial services is increasing as incomes rise steadily in global growth markets and financial institutions adopt innovative business models to serve them profitably,” said Apis Co-Founder and Managing Partner, Matteo Stefanel. “MicroCred is at the forefront of combining traditional lending practices with technological innovations to deliver a range of critical financial products to MSMEs, which drive economic growth in growth markets.”
MicroCred, which had a loan portfolio of $300 million as of June 2015, offers credit products, savings accounts, and access to electronic payments methods such as cards and ATMs to micro, small and medium-sized enterprises in the countries. The company currently services 325,000 clients in Madagascar, Senegal, Nigeria, Côte d’Ivoire, Nigeria and Tunisia as well as the provinces of Sichuan and Nanchong in China. Having gleaned multijurisdictional experience after a decade in operation, the firm is well-placed to expand into new markets, launch new products and introduce alternative distribution channels.
Udayan Goyal, Apis Co-Founder and Managing Partner, added “We are impressed by MicroCred’s industry-leading track record of execution over the past decade, and we look forward to supporting its management team as it leverages new business models and financial technologies in achieving its ambitious growth prospects.”