The Norwegian Investment Fund for developing countries, Norfund, Dutch development bank FMO, and multinational financial services provider Rabobank have launched a new bid to grow the financial sector in sub-Saharan Africa through a new company named Arise.
The new company was officially launched in South Africa earlier this week, and will see the partners pool around US$660 million in assets currently held across 20 countries in sub-Saharan Africa, although Arise itself is only currently operational in 10 countries.
Deepak Malik, chief executive officer at Arise, said the main objective of establishing this company is to “strengthen and develop effective, inclusive financial systems in Africa in order to contribute to economic growth and poverty reduction” across the board.
He added: “Arise will take and manage minority stakes in financial service providers with the aim of building strong and stable institutions that will serve retail, small and medium enterprises, the rural sector, and clients who have not had access to financial services.
Plans for the consortium of institutions to form a financial services company were first discussed in August 2016, and although its launch was delayed by a month, the new entity is expected to enhance governance, management, marketing, innovation, compliance and risk management.
Specifically, Arise will increase the availability of financial services to small and medium enterprises and will provide a platform for people in Sub-Saharan Africa to access bank accounts, loans, and other services that they might otherwise not be able to benefit from.
While banks are said to be driving financial inclusion through mobile money and other technologies, more than two billion people around the world do not have access to a bank account, many of them in sub-Saharan Africa. By combining resources, Malik said he expects that to change.
Speaking in August, he said: “Arise will contribute to [Africa’s] financial sector on a scale far beyond what Norfund can achieve by itself.”
Prior to the formation of Arise, Norfund, FMO and Rabobank supported Africa’s financial sector independently, but will assemble a team of local and international industry experts to work together to ensure the success of the venture and grow assets beyond US$1 billion.