Swedfund, the Swedish development finance institution, has committed €26m (USD 28.4 million) to AfricInvest’s Financial Inclusion Vehicle (FIVE), a dedicated platform aimed at bolstering financial institutions and expanding access to services for underserved African populations and small enterprises. The investment seeks to leverage digital innovation to enhance economic empowerment and inclusion on the continent.
The move comes as statistics reveal a significant gap in financial access in Africa, with only approximately 20 per cent of the population currently having access to formal banking services. This limitation is widely recognised as a constraint on entrepreneurial activity, job creation, and the resilience of individuals and businesses to economic shocks. Swedfund’s capital injection into FIVE is designed to support financial institutions that are actively working to broaden their reach and develop inclusive financial products, particularly through the adoption of new technologies and digital solutions.
“Our investment in FIVE further strengthens our engagement to improve access to banking and other financial services in underserved communities,” stated Jakob Larsson, Senior Investment Manager at Swedfund. “This in turn spurs job creation and growth. We are also able to strengthen financial institutions and the development of innovative financial services.”
Through its investment in FIVE, Swedfund will contribute to strengthening the capital base of selected financial institutions operating across Africa. This enhanced capitalisation will enable these institutions to expand their operations and serve a larger client base. Furthermore, the investment aligns with FIVE’s commitment to promoting gender equality and women’s empowerment, with the aim of fostering positive change within its portfolio companies and the wider communities they serve.
Swedfund’s strategy involves investing in a diverse range of financial service providers, encompassing both traditional institutions and digital-first entities, including banks, insurers, and fintech companies. This approach is intended to catalyse the development of more inclusive financial ecosystems, ultimately driving job creation and fostering economic growth throughout the continent.
The Financial Inclusion Vehicle (FIVE) was established in 2017 by AfricInvest, a pan-African private equity firm. The platform has also attracted investment from a consortium of other prominent development finance institutions, including those from Norway, Denmark, the Netherlands, Germany, and Belgium, as well as African multilateral development institutions and pension funds.
Swedfund’s investment in FIVE underscores its broader mission to reduce poverty through sustainable investments in developing countries. As Sweden’s development finance institution, Swedfund plays a key role in the implementation of the 2030 Agenda for Sustainable Development and the Paris Agreement on climate change. While sharing the overall goals of development cooperation, Swedfund utilises private sector investments and technical feasibility studies to achieve its objectives.
The institution’s investments are designed to contribute to the creation of decent jobs and improved access to essential products and services, such as electricity and food. Swedfund positions itself as a long-term, additional, and catalytic investor, aiming to mobilise further private capital alongside its own commitments. The feasibility studies undertaken by Swedfund’s Project Accelerator support the development of sustainable public infrastructure, as well as trade and export opportunities for Swedish solutions.
As a state-owned company managed by the Swedish Ministry of Finance and financed through portfolio reflows and annual capital injections overseen by the Ministry for Foreign Affairs, Swedfund’s activities are closely aligned with Sweden’s development cooperation policy, with all results being rigorously measured and reported. The investment in AfricInvest’s FIVE represents a significant step in its ongoing efforts to promote financial inclusion and drive sustainable economic development in Africa.