We’re pleased to announce the recent release of the FIEC sponsored AfriCap Governance paper, which was published by Calmeadow and written by Grassroots Capital Management.

The recent publication, An Assessment of AfriCap Governance, focuses on the role governance played in the AfriCap fund’s successes and failures, while recounting the fund’s many challenges and its ultimate accomplishment. The pivotal role of the board in governance, and the board’s lead responsibility for such critical matters as strategy, risk control, and management selection and succession, feature prominently in the study.

To view the report: AfriCap Governance Assessment Final


Africap pic


A blog by Amitabh Brar and Paul DiLeo, Investment Manager and President, Grassroots Capital Management summarizes some of the key findings of the AfriCap assessment. Please view the Center for Financial Inclusion’s blog report  here.

There are two AfriCap narratives. One is of a pathbreaking fund that set out to demonstrate the relevance of the commercial microfinance model to Africa. It registered some early successes in its portfolio, attracted additional capital to more than triple in size, and nurtured African leadership at both the investment management and Board levels. As the African environments rapidly developed, the manager and the investors struggled to coalesce around a strategy for the Fund and diverged in their views of which, and how many, of the emerging opportunities to pursue. As the Board carefully considered the options, value was lost as the portfolio languished.

Nevertheless, we believe that AfriCap’s contribution to the microfinance sector in Africa is unquestionable.
In 13 years the Fund invested both equity and debt in 21 microfinance institutions (MFIs), more than any other equity fund investing in microfinance during that era, and managed $11 million in technical assistance (TA) support to its investee companies and the regional industry. With the benefit of this AfriCap capital and technical assistance, the African microfinance sector generated solid examples of investable MFIs that laid the basis for the subsequent growing interest in investment in African microfinance investment vehicles (MIVs) evidenced in recent years by a spate of Africafocused funds.

From 2001, when AfriCap started, to 2013, the African microfinance portfolio grew more than 10 times to more than $6 billion. Prominent MFIs like Equity Bank (EBS) in Kenya and Socremo in Mozambique challenged early skepticism over the prospects for African microfinance. A few of AfriCap’s key features and accomplishments
were critical in its ability to realize these positive influences and results.