News Type: Press release

IDRC and FSD Africa enter into a partnership to deepen financial inclusion using big data analytics

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Nairobi, Monday 17th July 2017 – Financial Sector Deepening Africa (FSD Africa) and Canada’s International Development Research Centre (IDRC) have entered into a partnership to implement the ‘Deepening Financial Inclusion Using Evidence Based Decision Making’ project.

Digital finance services are increasingly becoming a critical asset for financial service providers (FSPs) within sub-Saharan Africa (SSA). Digital finance adoption is enabling these providers to improve their operating effectiveness and their service delivery to customers. Digital delivery channels are increasingly becoming a cost-effective method of enabling FSPs to reach a broader clientele. Further, there is a growing realisation within the financial sector that insights derived from analysis of FSPs internal data and big data leads to improved customer value propositions. Hence, it enables FSPs to provide relevant financial services to financially excluded market segments whi low-income women.

The project seeks to demonstrate to FSPs the benefits of using data to make evidence based decisions.  This will involve: i) building the capacity of FSP staff to use data to make evidence based decisions; ii) demonstrating the business case for FSPs to utilise internal data and big data to develop financial products that address the financial needs of different customer segments within their operating environments; iii) building the capacity of local research and data analytics communities to provide data handling support to FSPs; and iv) developing a toolkit that will provide guidance to FSPs seeking to use internal and external data to make evidence based decisions.

Paul Musoke, the Director Competitive Strategies at FSD Africa said: “We are pleased to be partnering with IDRC in this exciting journey. The most significant trend affecting the financial sector today is digital finance services, changing the way products are delivered at scale. With growing digital footprints driven bye mobile phone and internet, poor and excluded people are becoming less anonymous. Coupled with the exponential increase in data that provides deeper insights into how people manage their financial lives, data management and analytics capabilities are going to be imperative for the sustainability of FSPs going forward. The opportunities it offers to profitably reach excluded segments previously regarded as un-bankable, with relevant products at scale are truly exciting.’’

“This pioneering work with FSD Africa will make the business case for investing in data use and analysis, which will hopefully lead to the development of innovative financial products and services better suited for women. By helping service providers better understand women’s needs and the key barriers they are facing, we believe the gender gap in access to finance can be reduced. We know that when women have control over their finances, they are empowered to make better decisions for themselves and their families. We are confident s partnership will contribute to maximising the impact of financial inclusion in a way that fosters opportunities for women and the poor,’’ said Martha Melesse, Senior Program Specialist in charge of the project at IDRC.

The project will cover at least three (3) countries; Tanzania, Sierra Leone and Zambia and will run for a duration of 30 months.

It is our conviction that using data analytics to develop insights into customer preferences will be a powerful spur to game changing product innovation that will have a big impact on people’s lives within SSA.

Notes to Editors

About IDRC

As part of Canada’s foreign affairs and development effort, IDRC invests in knowledge, innovation, and solutions to improve lives and livelihoods in the developing world. Bringing together the right partners around opportunities for impact, IDRC builds leaders for today and tomorrow and helps drive large-scale positive change.

For more information about IDRC’s recent activite subscribe to IDRC’s bulletin and visit:

Twitter: @IDRC_CRDI

LinkedIn: International Development Research Centre (IDRC)

Youtube: https://www.youtube.com/user/IDRCCRDI

Website: www.idrc.ca

 

About FSD Africa

FSD Africa is a non-profit company which aims to increase prosperity, create jobs and reduce poverty by bringing about a transformation in financial markets in SSA and in the economies, they serve. It provides know-how and capital to champions of change whose ideas, influence and actions will make finance more useful to African businesses and households. It is funded by the UK aid from the UK Government

For more information about FSD Africa’s activities and current updates follow our social media platforms:

Twitter: @FSDAfrica

Linkedin:  Financial Sector Deepening Africa (FSD Africa)

Website: www.fsdafrica.org

Email: shakila@fsdafrica.org

FSD Africa invests £15.3 million in the African local currency bond fun

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PRESS RELEASE – FOR IMMEDIATE PUBLICATION

Nairobi, 9th May 2017 – Financial Sector Deepening Africa (FSD Africa) and KfW Development Bank announce that they have agreed terms under which FSD Africa will invest £15.3 million in the African Local Currency Bond Fund (ALCBF). When fully subscribed, this fresh injection of capital will take ALCBF’s total equity to £53m, substantially increasing the fund’s investment firepower and thus enabling it to step up its engagement with developmentally important industry sectors such as green energy and housing and take on investments in fragile and conflict affected states.

ALCBF was established by KfW on behalf of the German Ministry for Economic Cooperation and Development (BMZ) in 2012 to support the development of African bond markets and improve private sector access to long-term and local currency financing.

Alongside this investment in the equity of the fund, FSD Africa has also agreed to contribute £500,000 towards ALCBF’s Technical Assistance Facility. FSD Africa’s investment is part of a comprehensive and continuing strategy by ALCBF to increase significantly its capital base through equity and debt, and diversify its funding sources.

Mark Napier, Director of FSD Africa, said: “We are proud to become the African Local Currency Bond Fund’s second shareholder. The lack of long term, local currency funding is one of the most serious problems in Africa’s financial markets.  It means that good projects don’t get funded and much-needed jobs don’t get created.  We were attracted by the African Local Currency Bond Fund because of its pan-African reach, its ability to generate solid financial returns from good quality investments, and because of its energetic commitment to supporting the development of capital markets by providing technical assistance alongside investment capital.”

Capital markets are an important medium for channelling savings into investment in local economies, but in most African countries they are not yet playing a significant role. Where domestic capital markets do not work and long-term local currency finance is not available, companies are forced to rely on hard currency loans. Foreign currency loans expose borrowers and sometimes an entire financial system to exchange rate risk: when local currencies weaken, foreign currency loans can quickly become very expensive to repay and when the borrower is a financial institution, that can create risks for the financial system as a whole. Low income households and small businesses are often among those most affected by systemic financial crises.

Bond issuance not only means that companies gain access to investment capital. It also means that local investors – typically, pension funds and insurance companies – get the opportunity to invest for the long term in their own currency, thus ensuring that their long-term liabilities, such as pension pay-outs, can be matched.

ALCBF has been investing in Africa for four years, during which it has played a key role in bringing 19 issuances to market for 13 companies in 7 countries, investing a total of £33m. The current outstanding portfolio is £24m.  All investments to date have been in the financial sector, including micro-lenders, Micro, Small and Medium Enterprises (MSME) lenders, leasing companies and lenders into the health, education and housing finance sectors.

ALCBF is managed by Lion’s Head Global Partners (LHGP) Asset Management LLP (LHGP AM), an investment and advisory firm regulated by the UK Financial Conduct Authority with offices in London and Nairobi.  LHGP AM was appointed as Fund Manager to ALCBF in May 2015.  Bim Hundal, Chairman of LHGP AM, says: “We are pleased and excited to work with KfW and FSD Africa on this ground-breaking initiative. Providing local currency financing to African companies and institutions puts ALCBF at the forefront of capital markets innovation.”

FSD Africa’s investment is expected to increase the number and size of bond issuances in SSA and reduce the cost of capital for borrowers. Because the fund never buys more than 50% of a bond, the investment should mobilise (or crowd in) significant amounts of domestic capital from local institutions: in 2016, for every £1 invested by the fund in local currency bonds, £10.6 was invested by third parties.

FSD Africa’s investment will also help ALCBF to continue its work of strengthening technical capacity in the market, supporting local issuers with advice and building the skill set, standards and practices of market intermediaries such as placement agents and investment banks.

This marks FSD Africa’s largest deployment of investment capital to date and is consistent with its objective of driving financial market transformation through capital investment as well as through grant funding.

Johannes Feist, Head of Division – Financial Systems Development, Southern Africa and Regional Funds for KfW, said: “We are delighted to welcome FSD Africa’s participation in the African Local Currency Bond Fund.  FSD Africa’s equity investment, alongside KfW’s, can be leveraged with senior debt which means the fund can deliver capital market development impact more quickly and in more markets across Africa.”

Ends.

Note to editors

About KfW

KfW Development Bank has been helping the German Federal Government to achieve its goals in development policy and international development cooperation for more than 50 years. In this regard, KfW Development Bank is both an experienced bank and a development institution with financing expertise, an expert knowledge of development policy and many years of national and international experience. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank finance and support programmes and projects that mainly involve public sector players in developing countries and emerging economies – from their conception and execution to monitoring their success.

Contact: Johannes Feist, KfW, +49-69-7431-3519 or Johannes.Feist@kfw.de.

For more information about KfW Development Bank’s activities and current updates follow:

Twitter: @KfW

Website: www.kfw-entwicklungsbank.de.

About FSD Africa

FSD Africa is a non-profit company which aims to increase prosperity, create jobs and reduce poverty by bringing about a transformation in financial markets in SSA and in the economies, they serve. It provides know-how and capital to champions of change whose ideas, influence and actions will make finance more useful to African businesses and households. It is funded by the UK aid from the UK Government.

Contact: Mark Napier, FSD Africa, +245 701 773 028 or mark@fsdafrica.org.

For more information about FSD Africa’s activities and current updates follow our social media platforms:

Twitter: @FSDAfrica

Linkedin: Financial Sector Deepening Africa (FSD Africa)

Website: www.fsdafrica.org

Kenya green bond programme kicks-off with strong backing from banking industry and development finance community

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Nairobi, Friday 31st March 2017 – The Kenya Bankers Association (KBA), Nairobi Securities Exchange (NSE), Climate Bonds Initiative (CBI) and Financial Sector Deepening Africa (FSD Africa) in conjunction with the FMO – Dutch Development Bank and the International Finance Corporation (IFC) have today launched the Kenya’s Green Bond programme. The programme, which is coordinated by KBA under its Sustainable Finance Initiative (SFI), is endorsed by the Central Bank of Kenya (CBK), Capital Markets Authority (CMA) and the National Treasury.

During the launch, KBA, the NSE, CBI and FSD Africa signed a Cooperation Agreement to support the development of a green bonds market in Kenya.  FSD Africa has committed USD 600,000 over a period of three years, to fund the programme with the objective of aiding Kenyan banks and corporates to be in a position to tap the growing investor demand for green investments.

Through the partnership and funding from FSD Africa, a technical support programme will be implemented that will enable the partners to develop a pipeline of potential bond issuers and support demonstration green bond issuance from leading banks and corporates in Kenya. In addition, it will enable the development of a community of Kenyan-based licensed verifiers and support KBA’s efforts in building capacity locally to catalyze similar programmes across East Africa. In addition to the FSD Africa funding, FMO had earlier committed USD 350,000 to support KBA develop the framework to create the industry’s first pooled gbond facility. The facility that would allow KBA member banks, especially Tier 2 and Tier 3 banks, and corporates to take advantage of wholesale debt capital markets.

The launch of the Kenya Green Bond Programme comes at a time when African countries are gaining momentum to align with the burgeoning activity within the green finance space. Kenya, Nigeria, Morocco, Egypt and South Africa are among countries that have made strides to establish standards, harmonize public and private sector efforts as well as build capacity within the green economy. Globally, based on the 5th annual State of the Market Report by HSBC and detailed by CBI in a recent 2016 report, $694 billion is said to be climate aligned bonds. Out of the $694 billion, $ 118 billion are labelled as green bonds. A green bond label, enables investors to identify climate aligned investments and thus reduce friction in the market, which will in turn facilitate growth in climate aligned investments.

During the launch, the CEO of KBA, Habl Olaka said: “We are very pleased and excited to announce this partnership. This alliance has given us the opportunity to work closely together as a sector in developing Kenya’s green finance market through the green bond programme. One of KBA’s main objectives is to develop and sustain best practices that will inevitably strengthen financial structures in Kenya. FSD Africa, FMO, IFC, CBI and the NSE have all focused over the years on growing sustainable finance practices in the financial sector and this strongly complements our objective.”

The Chief Executive of NSE, Geoffrey Odundo noted: “The Exchange is committed to developing a vibrant green market for this region; we aim to create an environment that will allow the market to prosper in a secure and transpar­ent way. Through the NSE, issuers and investors will have a platform where they can come to­gether and fulfil their green objectives. The Kenya Green Bond Programme is an innovative tool that will promote economic and climate resiliencyntry.”

Ahead of the signing ceremony, the Director, FSD Africa, Mark Napier said: “It is expected that this programme will improve access to a complementary source of longer-term capital alongside traditional, shorter term bank loans, while contributing to the financing of ‘green’ investments and improving the environment. It will further support the national agenda that seeks to reinforce Kenya’s role as a regional leader in financial services as articulated by Vision 2030 and Kenya’s Green Economy Strategy and Implementation Plan (GESIP).”

In agreement, Sean Kidney, CEO of Climate Bonds Initiative also said: “We are very excited to be able to work with our partners to grow a green bonds market in Kenya. This is going to be part of delivering lower cost capital to green projects, and developing capital markets in Kenya. In this year of sovereign green bonds Kenya is taking action and issuing will enhance its leadership positioning in Africa and provide a positive example to other nations loe finance options.”

Ends.

Note to editors

About Kenya Bankers Association

KBA (www.kba.co.ke) was founded on 16th July 1962. Today, KBA is the financial sector’s leading advocacy group and banking industry umbrella body that represents total assets in excess of USD 37 billion. KBA has evolved and broadened its function to include advocacy on behalf of the banking industry, and championing financial sector development through strategic projects such as the launch of the industry’s first P2P digital payments platform PesaLink.  In line with the Government’s policy on public-private partnerships, KBA and Central Bank of Kenya have implemented key projects such as modernization of the National Payments System through the Automated Clearing House, implementing the Real Time Gross Settlement System (RTGS), and the Kenya Credit Information Sharing Initiative. The KBA members are comprised of commercial banks and deposit taking microfinance banksg>Nairobi Securities Exchange (NSE)

The NSE is a company established under the Companies Act, Cap 486 of the Laws of Kenya (as amended) and is licensed by the Capital Markets Authority to promote, develop, support and carry on the business of a securities and derivatives exchange and to discharge all the functions of a securities and derivatives exchange under the applicable Laws of the Republic of Kenya.

About the Climate Change Initiative (CBI)

The CBI is a private company limited by guarantee, established under the Companies Act 2006 of the United Kingdom and registered as a charity in England and Wales, and mandated to work for the preservation and conservation of the environment for the public benefit.

About FSD Africa

FSD Africa is a non-profit company which aims to increase prosperity, create jobs and reduce poverty by bringing about a transformation in financial markets in SSA and in the economies, they serve. It provides know-how and capital to champions of change whose ideas, influence and actions will make finance more useful to African businesses and households. It is funded by the UK aid from the UK Government

For more information about FSD Africa’s activities and current updates follow our social media platforms:

Twitter: @FSDAfrica

Linkedin:  Financial Sector Deepening Africa (FSD Africa)

Website: www.fsdafrica.org

Email: evans@fsdafrica.org

For media enquiries please contact:

Financial Sector Deepening Africa (FSD Africa)

Lara Cornaro

Head of Communications

lara@fsdafrica.org

 

Kenya Bankers Association

Nuru Mugambi

Director of Communications and Public Affairs

Phone: +254-20-2221704/2224014

Email: nmugambi@kba.co.ke

 

Nairobi Securities Exchange Ltd.

Waithera Mwai-Ireri

Head of Brand and Corporate Affairs

Tel: +254 (020) 283 1000

Email: wmwai@nse.co.ke

Website: www.nse.co.ke

 

Climate Bonds Initiative

Andrew Whiley

Communications Manager

Phone: +44 (0) 7506 270 943

Email: andrew.whiley@climatebonds.n

CMA launches international certification for the capital markets industry

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Nairobi April 21, 2016 – As part of its drive to enhance the positioning of Kenya as a premier investment destination, the Capital Markets Authority (CMA) has launched international certification standards for practitioners in the capital markets industry. The launch is the product of the signing of a Memorandum of Understanding (MOU) with the Chartered Institute for Securities & Investment (CISI) in September 2014.

Financial Sector Deepening Africa (FSD Africa) has provided funding for the development of the curriculum and examination for the International Introduction to Securities and Investment (Kenya) (IISI- K) certification to be awarded by CISI. This is part of a strategic partnership between FSD Africa and the CMA in which FSD Africa will invest £1.1 million in a technical assistance programme to strengthen the CMA’s institutional capacity and support the development of Kenya’s capital markets.

The curriculum for Stage One, IISI (Kenya), has already been developerst cohort of market candidates went through training and sat for the examination in November 2015. This included thirteen CMA staff members and eight officials from various training institutions in Kenya. The curriculum for Stage Two which will cover local conduct of business standards and market regulations, under the Kenyan regulatory framework, will be completed by June 2016.

The, certification programme will ensure that practitioners in the capital markets industry have the requisite skills and apply best practice as Kenya takes its position as the hub for the African capital markets.

CMA Acting Chief Executive, Mr Paul Muthaura

For Kenya to be competitive and attract international flow of funds client facing staff within capital market intermediaries need to adopt international certification standards to support the introduction of more diversified products in the market, as well as to ensure that engagement with investors is consistent and meets the highest possible professional and ethical standards. The introduction of certification standards, aimed at creating a highly skilled talent pool, is aligned to the Capital Market Master Plan, the ten-year blue print for the Kenyan capital markets industry, and the ambition of the country to become a regional and International Financial Centre.

Mr. Muthaura added that the adoption of CISI’s International Introduction to Securities and Investment (IISI) program, as an industry recognised certification standard for Kenya is underpinned by the intention to support its adoption within the wider East African Community (EAC) region, with the recognition that capital market players are increasingly operating across borders.

We are delighted to provide assistance for this certification programme which is an important step for Kenya towards boosting the professionalism of its capital markets and enhancing its attractiveness as an investment destination in sub-Saharan Africa.

Julias Alego, Director of Professional Education, FSD Africa

 

We are very pleased to work with CMA to enhance and promote professionalism and professional standards in the capital markets industry in Kenya.

Kevin Moore Chartered MCSI, Director of Global Business Development of CISI

He further added that CISI has already established a Computer Based Testing (CBT) Center at the ICEA building in Nairobi’s Kenyatta Avenue. The cost of registration and undertaking Stage One exams has also been set at a subsidized rate to support market uptake.

The Authority issued a circular to all market licensees on Monday November 9th, 2015 informing them of the market certification and competency standards to be adopted pursuant to Regulation (19)3 of the Capital Markets (Corporate Governance) (Market Intermediaries) Regulations 2011.

For more information, please contact:

Lora Benson
Head of Media, CISI
E-mail: lora.benson@cisi.org

Antony Mwangi
Head of Corporate Communications, CMA
E-mail: amwangi@cma.or.ke

Julias Alego
Director of Professional Education, FSD Africa
E-mail: julias@fsdafrica.org

About Chartered Institute for urities & Investment (CISI)
Based in the City of London, CISI is the professional body of choice for practitioners within the securities and investment industry. With representative offices in financial centres including Dublin, Singapore, Dubai, Mumbai and Colombo CISI has a range of globally recognized qualifications and supports individuals through membership from the student level to individual charter status, the pinnacle of professionalism. It works to ensure that products and services are up to date, relevant, and that they meet the needs of the ever changing financial services industry. Every year, over 40,000 examinations are taken in more than 50 countries around the world by candidates who are employed by 92 percent of the world’s top banks.

About Capital Markets Authority (CMA)
The Capital Markets Authority was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence. The regulatory functions of the Authority as provided by the Act and the regulations include; licensing and supervising all the capital market intermediaries; ensuring compliance with the legal and regulatory framework by all market participants; regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; promoting market development through research on new products and services; reviewing the legal framework to respond to market dynamics; promoting investor education and public awareness; and protecting investors’ interest.

About FSD Africa
FSD Africa is a non-profit company, fd by the UK’s Department for International Development, which promotes financial sector development across sub-Saharan Africa. It sees itself as a catalyst for change, working with partners to build financial markets that are robust, efficient and, above all, inclusive. It uses funding, research and technical expertise to identify market failures and strengthen the capacity of its partners to improve access to financial services and drive economic growth. It believes strong and responsive financial markets will be central to Africa’s emerging growth story and the prosperity of its peop

FSD Africa invests US$7.5m in frontclear to boost interbank lending in SSA

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FSD Africa announces a US$7.5m investment in Frontclear, a global guarantee fund which aims to improve interbank liquidity in developing markets.  Frontclear offers a USD guarantee against the local currency value of assets which borrowing banks need to give lending banks as collateral for a loan.

The other investors in Frontclear are EBRD, Proparco, TCX and KfW.  The total capital committed at first close is US$180m. FSD Africa’s investment is in the form of Subordinated Loan Notes, a “first loss” instrument which has helped to crowd in the other investors.  This is FSD Africa’s first capital investment which it is supplementing withUS$1.5m of technical assistance funding.

The interbank market is important because, alongside deposits and the wholesale market (e.g. bonds), it can be a very attractive source of capital for banks.  If interbank markets function well, banks can get access to ously and more flexible terms than in the wholesale markets.

This otherwise ‘dead capital’ can put to use through productive investments in the real economy e.g. lending to African