Knowledge

Oil and Gas

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The continued drop in oil and gas prices since the summer of 2014 led to a survival mindset in the industry, highlighting the importance of cost reduction and efficiency...

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RenMoney – MSME Finance to Small Scale Retailers Adopting the Baxi Box

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In 2015, Capricorn Digital Limited introduced a unique technology-driven Point of Sale (POS) device known as Baxi Box (pictured above), to help improve online business transactions on a real-time basis for the mass market consumers (people who do not use smartphones) through a network of agents. Capricorn is a digital solutions and distribution company that supports the growth of agents, merchants and MSMEs through the efficient and effective distribution of digital products and services utilising its extensive distribution network across Nigeria. RenMoney is providing loans to small retailers and other agents to fund purchases of a Baxi Box and associated... View Article

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Africa Accounts for Over Half Mobile Money Transactions Worldwide

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The 2016 Groupe Speciale Mobile Association (“GSMA”) report “State of Mobile Money in Sub-Saharan Africa” revealed that the number of live mobile money services amounts to 140 across 39 countries in the Sub-Saharan region at the end of 2016 from its lowest level of 2 in 2006. This represents more than half of the 277 mobile money transactions across the globe.   In the last ten years, the global mobile money adoption has been driven by the growth in the Sub-Saharan Africa where this comprises of East Africa, Central Africa, Southern Africa and West Africa bringing the region at the... View Article

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South Africa Poses a Challenging Environment for Entrepreneurship

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  A study by the Organisation for Economic Co-operation and Development (“OECD”) released in July 2017 revealed that just 26% of business loans from banks in South Africa are granted to SMEs, and that the number of microfinance providers has dropped. This is significantly lower than other wealthy emerging countries. For comparison, banks in South Africa’s BRICS counterparts China and Brazil lend 64% and 40% of their business loans to SMEs respectively. A study by the International Labour Organisation in 2016 revealed that microfinance ranked last out 11 possible ways to finance a start-up business. The high unemployment rate and... View Article

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Amazon to Expand its Lending to Small Businesses in Challenge to Big Banks

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  Amazon, a Seattle-based company announced in June 2017 that Amazon Lending has surpassed USD 3 billion worth of loans and advances to small businesses since its launch in 2011. The company is targeting to expand its lending to small businesses in the US, the UK and Japan which will prove to be a direct threat to the big banks which have historically denominated these markets. We view Amazon Lending as interesting case study for the African market given the increasing successes of many e-commerce players and various supply chain financing institutions (more on this next month). Within the past... View Article

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Safaricom Rolling out Mobile Money after the Sale of Vodafone Stake

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  In May 2017, Vodacom announced it had agreed to buy from its parent company Vodafone, a 35% stake in Safaricom, a Nairobi-based mobile network operator company for USD 2.6 billion. The sale of such stake will enable Safaricom to look to new markets as it is now planning to expand its popular mobile-banking service M-Pesa into other African countries such as Nigeria and Angola. This move is expected to expose the company to growth opportunities outside its home country where it is under pressure from lawmakers and regulators with respect to its dominance in the market. M-Pesa has more... View Article

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Premier Credit – Asset financing business

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  Premier Credit, an MSE-lending business in Kenya, Uganda and Tanzania, has continued to expand and broaden its “Partnership Products” programmes, its high impact asset financing programmes. Premier Credit has financed 500 bio-gas digesters in Kenya since 2014. Each digester uses 2 kg of cow dung per day, approximately the product of two cows. Each digester produces three cubic metres of gas each day which is used by most households for cooking. The bi-product is a slurry that can be used as a fertiliser, especially for higher value crops such as vegetables. The bio-gas digesters are an Indian technology. The... View Article

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Senegal, a member of Western African Economic and Monetary Union (“WAEMU”) Creates Digital Currency History

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  December 2016, Senegal, a member of the West African Economic and Monetary Union (“WAEMU”) became the second largest country in the world after Tunisia to launch a block-chain based national digital currency which could either provide big opportunities or competition in the banking sector. Known as the eCFA, it is designed to operate alongside the CFA Franc, the country’s and the region’s national currency, adopted by fourteen countries in the region. The new currency will be compatible with other digital cash systems like MPesa which have themselves been revolutionary for the millions of unbanked population in the African continent.... View Article

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Mobile Money Panel at East Africa Com – May 2017

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  A number of issues were raised on the East AfricaCom Mobile Money panel in May regarding the future of the USSD mobile money channel, the breadth of services offered through the channel and the potential threats to and opportunities for this business model. The panel was hosted in Nairobi, Kenya, the birthplace of mobile money. Ed Higenbottam, Managing Director of Verdant Capital identified two competing themes: (i) the ever-broadening product offering through the USSD channel: payments, micro-loans, micro-insurance, remittances, micro-investments (for example the recent M-Akiba bond); and (ii) the long-term potential threat to the USSD-business model as a result... View Article

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Caisse Centrale de Garantie wins the “Financial Inclusion” Award at the 2017 African Banker Awards

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Caisse Centrale de Garantie (“CCG”) based in Morocco won the “Financial Inclusion” trophy hosted at the African Banker Awards 2017, organized on the side-lines of the annual meetings of the African Development Bank (“AfDB”) held in Ahmedabad, India. Such an award recognizes CCG’s commitment and successful strategy in terms of financial inclusion with a demonstrated impact on improving access to financing for MSMEs and low-income individuals. Established in 1949, the CCG is a public financial institution, which is assimilated to a credit institution under the banking law. The CCG is administered by a Board of Directors chaired by the Minister... View Article

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IMAP Creating Value, No 2

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Creating Value strives to capture what entrepreneurship and leadership in successful companies attempts to achieve: creating value for clients, employees, shareholders, and for society as a whole. This mindset is also what drives our more than 350 M&A advisors, who strive every day to enhance the interests of IMAP clients in more than 35 countries around the globe.

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Verdant Capital has won the prestigious award Best Capital Raise in Africa, 2016

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Elsewhere in the financial services sector, Verdant Capital has won the prestigious award Best Capital Raise in Africa, 2016 from Acquisition International for its ZAR 450 million capital raise for Trustco Group.  The award is in recognition for the complexity of the transaction combining senior and subordinated tranches, as well as its size versus market benchmarks, as one of the largest transactions in the Namibian history.  Separately, Verdant Capital has also been shortlisted for the African Banker award for Financial Inclusion, 2017

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Verdant Capital advises JUMO World Limited on the sale of 100% of afb Ghana to Letshego Holdings Limited.

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Letshego has announced the completion of the acquisition of afb Ghana following final regulatory approvals.  afb Ghana was launched in 2010 and has total assets of GHS 97 million (approx. USD 23 million), making it now one of the largest consumer and micro lending institutions in Ghana.  JUMO World advised by Verdant Capital, has sold the business in order to focus on its core financial technology business. Letshego Holdings Limited, is a leading pan-African inclusive finance institution, listed on the Botswana Stock Exchange, with total assets of BWP 7.5 billion (approx. USD 710 million).  The transaction is one of a series of successful transactions... View Article

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Verdant Capital opens office in Kinshasa

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Verdant Capital, head-quartered in Johannesburg, is opening its fourth office, in Kinshasa, Democratic Republic of Congo. DR Congo is the seventh largest economy in Sub Sahara Africa and has a population of over 77 million. Imran Patel, has joined Verdant Capital as a Vice president, to open to the firm’s office in the country.  Imran Patel, based in Kinsasha, has 15-years experience in investment management and business strategy.  Following many years working for a leading North American hedge fund, Imran returned to DR Congo, the country in which he was raised.  In addition to financial services, Imran has extensive experience in sectors... View Article

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47% of Tanzania’s GDP Transferred through Mobile Phones

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Tanzania has witnessed a significant increase in financial inclusion reaching 86% from its lowest level of 16% eight years ago. Mobile money revolution is the driver of such growth with TZS 43 trillion (equivalent to 47% of the country’s GDP) being transferred through mobile phones. Mobile money has helped many Tanzanians including the poor to transact in a fraction of seconds despite the vast distances between some of them. Mobile money services have become popular just in a decade with major players including Vodacom’s M-Pesa, Tigo Pesa, Airtel Money and Ezy Pesa competing against each other for customers. This brings... View Article

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Zimbabwe Could Soon Accept Livestock as Loan Collateral

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The Reserve Bank of Zimbabwe will soon establish a collateral registry for movable property to enable the economy’s informal sector mostly made up of small businesses to use movable property including livestock and vehicles as security against loans from banks. Zimbabwe’s economy is now dominated by informal businesses following the contraction of the formal sector between 2000 and 2008. The Movable Property Security Interest Bill presented this month by the Finance Minister, Patrick Chinamasa aims to make it easy for the small businesses to access funding from local banks. Most small businesses are not in possession of the immovable property... View Article

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Letshego – a Leading pan-African Inclusive Financial Institution

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Letshego, a leading pan-African inclusive financial institution operating in eleven African markets spanning Southern, Eastern and Western African is expanding certain initiatives to further enhance its financial inclusion impact as well as its customers’ convenience. Letshego has an innovative mobile product which uses the USSD-system to allow customers to move money from their Letshego current accounts to their mobile money accounts to facilitate convenient mobile money payments. Convenient access to money is of course a key driver of customer behaviour in terms of choosing to participate in formal savings. Letshego has rolled out this product in markets where it has... View Article

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Telematics

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The broad application and range of telematics solutions and value-added services is attracting new players, new solutions and new business models which are contributing to rapid expansion of the overall market. Read this IMAP report for more information.

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Logistics India, Industry Report

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Logistics is an integral activity for economic growth as it involves the management of flow of goods from place of origination to place of consumption. Click here to read this industry report.

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Indian IT Industry, M&A Landscape 2017

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India is the world's largest sourcing destination for the global information technology ("IT") industry with overall annual revenue of USD 130 billion (2016). Click here to read this industry report.

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Trustco Bank re-starts micro and SME-lending after the closing of ZAR 450 million group funding

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Trustco Bank, formerly FIDES Bank, has started micro and SME-lending, following the first disbursement from the European Investment Bank (EIB) of its EUR 7.5 million (equivalent) facility. The facility from EIB was part of a ZAR 450 million group funding arranged by Trustco’s advisors, Verdant Capital, which was announced in November 2016. The overall ZAR 450 million of funding is being used to support, Trustco Bank, Trustco Finance (Trustco’s education lending business) and Trustco’s property development business, which is focused on affordable housing. In 2014, Trustco acquired FIDES Bank which had been known as the micro/SME bank in Namibia. The... View Article

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The Importance of a More Developed Banking System – Africa

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In Angola, more than 50% of the population do not own a personal bank account and approximately 60% of the country’s GDP circulates outside the banking system. The banking infrastructure is still underdeveloped in most African countries which is a major drawback for development. Maria Luisa Andrade who spoke at the official opening of Banco Postal this year said: “this is a significant loss to Angolan society, to the extent that these resources, as they are outside the financial system, do not generate taxes, they do not drive credit development and limit the growth of the country.” Banco Postal is... View Article

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Fund Raising for Inclusive Financial Institutions in Nigeria from International Markets

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Current challenges in raising funding for inclusive financial institutions in Nigeria from international markets include, the uncertainty around the foreign exchange policy and risk of central bank rationing of US Dollars when the time comes to service the debt. International investors who have invested over the last few years and have executed offshore currency hedges have been impacted by rationing of US Dollars. International investors today who are looking at the market, are exploring different hedging mechanisms, including back-to-back facilities with local banks, or even providing unfunded guarantees, but many specialist inclusive finance investors are maintaining a watching brief for... View Article

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Driving financial inclusion in Africa: Verdant Capital has identified four main themes as the driving forces behind financial inclusion

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Originally published in Banker Africa,  Issue 42: March 2017 and, Published in CPI Financial, March 2017. Read the article here. A critical theme in terms of the development agenda in Africa is financial inclusion, meaning increasing the proportion of poorer people (including those who live in rural areas) who have access to financial services, for example basic savings products, credit and insurance. Persons without access to such services are said to be financially excluded. We identify four key themes driving financial inclusion in Africa: (i) technological change, (ii) adoption of best practice, (iii) the broadening of wholesale funding markets available... View Article

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GreenFin expands its clean energy business

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  Perhaps no other continent has witnessed the same excitement in terms of opportunities for renewable power, especially solar as Africa. In East Africa, innovators have used the technology to bring power to off grid locations. South Africa has been better known for utility scale renewable projects and several bid rounds dating back to 1988. However, South Africa has a growing grid-tie market for renewable energy and is making a significant impact on climate change abatement. This is where “on-grid” customers invest in solar technology to supplement grid power, e.g. roof top solar at shopping malls. GreenFin Financial Services, a... View Article

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