Strengthening financial inclusion in Africa with Arise

Access to finance continues to remain the primary challenge for companies, particularly for MSMEs (Micro, Small and Medium Enterprises)in the agricultural sector. To address this imbalance and promote financial inclusion in Africa, the investment platform Arise was established in 2017 to provide more capital to the African financial system. The core mandate of Arise is to partner with sustainable locally owned financial services providers in Sub-Saharan Africa to help them become industry leaders in their respective markets and advance economic growth and job creation in their respective countries.

More than half of Rabo Partnerships’ equity portfolio is invested in Sub-Saharan Africa through Arise. In 2017, Rabo Partnerships, Norfund, NorFinance and FMO agreed to invest into African financial institutions via this joint venture to contribute to the economic growth and prosperity of Sub-Saharan Africa by increasing financial inclusion and employment, strengthening rural development and alleviating poverty.

Since its inception Arise has made significant strides in delivering on its core mandate. Arise has worked on building and optimizing its portfolio and at present holds equity stakes in nine African financial institutions with a total value of close to USD 1 billion (as of November 2021), jointly operating in 38 countries. These institutions are either already a top three player in their countries or have the potential to reach this position. Over the years, Arise has seen its outreach grow from a mere 14 million to close to 50 million clients.

Arise adds value by strengthening its network of partner banks so they can reach more clients and service them with advanced products. Numerous Rabobank colleagues have worked as consultants on projects with Arise’s partner banks. For instance, Rabobank consultants based in Utrecht and Brazil are currently working with Moza Banco in Mozambique to increase the bank’s credit capabilities. In Kenya, Rabo Partnerships set up a three-year Technical Assistance program with Equity Bank dedicated to transferring food & agri expertise to Nairobi and establishing a F&A financing framework in the bank. Currently, the focus increasingly lies on developing and providing smaller loans to SMEs and certain food & agri sectors.

Arise’s partner banks are also working on unlocking agricultural investments for their clients to boost economic growth in their countries. In 2021, Zanaco joined forces with the European Union and European Investment Bank to roll out a EUR 30 million initiative aimed at smallholder farmers and rural cooperatives to support agriculture in Zambia. In Tanzania, NMB Bank has announced its intention to offer entrepreneurs in the agriculture, livestock and fishing value chains affordable loans with lower interest rates. Access to affordable finance creates employment and increases farmers’ productivity and income.

Going forward, Arise is exploring new investment opportunities in fintechs, financial institutions without a banking license, and traditional banks in new countries. Yet the most important aspect of Arise’s strategy for the coming years is to advance its value creation service offerings to its partner banks.Through this strategy, Arise seeks to enhance its value creation impact and to contribute to Sustainable Development Goals by focusing on financial inclusion, SME development and finance, and the strengthening of food & agri value chains, among others.

Rabo Partnerships’ ambitions align with these business objectives and therefore we will continue to provide hands-on assistance to the Arise network. In January 2022, we will initiate a Technical Assistance program with Ecobank, a Pan-African bank with almost 30 million clients in 38 countries. The goal of this program is to assist the bank in designing and implementing a Food & Agribusiness Strategy to increase Ecobank’s food & agri portfolio and to contribute to the overall economic growth in Africa.