Pillar: FSD Africa Investments
Ongoing “Diaries” questionnaires
Open or close financial instruments as needed
Record changes in income sources
Change household roster as individuals leave and join
Record acquisition, loss, or sale of physical assets
Record major household events (ex: death, birth, wedding, etc.)
On-going questionnaires with supplements (shown on circle edge) as needed; automatically updates diary questionnaire
Project background
The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.
The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.
As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.
The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.
Project background
The Financial Inclusion for Refugees Project (FI4R) project was launched in 2019 by FSD Uganda and FSD Africa to support financial service providers (FSPs) to offer financial services to refugees and host communities.
The project is supporting three financial service providers (FSPs) Equity Bank Uganda Limited (EBUL), Vision Fund Uganda (VFU) and Rural Finance Initiative (RUFI) to offer financial services to refugees and host communities.
As the learning partner, BFA Global is conducting refugee financial diaries in Uganda to provide insights into the financial strategies employed by refugees over time to build their livelihoods and
manage their finances. The research covers refugees in Bidi Bidi, Palorinya and Nakivale refugee settlements.
The insights from this study aim to build the evidence base for financial service providers, humanitarian agencies and telcos to understand the financial lives of refugees in Uganda and to inform
stakeholders of the opportunities available in serving refugees across different contexts.
In the last ten years PayGo – the method of distribution and financing of off-grid solar home systems (SHS) – has revolutionized the effort to bring clean, renewable energy to people in Africa without access to electricity.
While the achievements of the PayGo sector are a cause for celebration, the companies that employ this business model have struggled. Several notable companies have failed outright. Others have slowly wound down or continue to struggle. Most – although not all – of the remaining companies have not achieved profitability after five or more years of operations.
Today, those of us working in the PayGo sector are making an effort to understand why PayGo companies have generally not achieved profitability and what can be done about it.
This paper presents our analysis of one of the key weaknesses in the PayGo industry and provides a prescription for the next stage of the industry’s evolution. Our analysis centers around a central feature of PayGo companies: each PayGo company is essentially two businesses. One is a solar products retail distribution company. The other is a consumer finance company, or
“Finco”.
It is estimated that 490 million people are accessing energy through off-grid solar solutions worldwide. In Africa, nearly 50% of these are people that would not have been able to afford solar home systems without the financing provided by PayGo. This is nothing short of remarkable.
FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2015 Housing Finance in Africa Yearbook.
Innovation in housing finance –in terms of products, players, and approaches, not to mention target markets – is a key feature across the continent, creating new opportunities for investment and delivery. As both local and international investors chase growth opportunities in a sluggish global economy, they are employing diversification strategies to manage the risks of their traditional targets – and in this, residential property is increasingly becoming an option. And while established players are getting better at what they do, new players are adding to the mix and competing for opportunities.
Investors are faced with a paradox, however. By their very nature, they are drawn to the high income markets. It is in these markets that they can price adequately for risk and realize the returns they seek. However, the real story – the scale opportunity just waiting to be cracked – is in the lower income market segments. The arguments for investment in residential – high urbanization rates, a growing middle class, a shortage of supply – these are all arguments for moving down market into the uncharted waters of affordable housing. Can investors and developers do it? In 2015, this is a very real focus.
Five stories characterize Africa’s housing finance markets in 2015:
1. Innovation in financing
2. Growing awareness of the opportunity in residential
3. The identification of niche markets and an appreciation of the affordability challenge
4. Policy & regulatory evolution to match investor interest
5. Growing experience and investor sophistication
Of course, the challenges are not insignificant. But increasingly, investors and developers are noting that the potential benefits outweigh the risks. And, as governments come to appreciate the potential that this interest offers, their efforts to streamline development processes and enable their local housing markets to grow are creating new opportunities that are beginning to change the face of African cities.
This is the sixth edition of the Housing Finance in Africa yearbook. Since last year, CAHF have added five country profiles and one regional profile bringing the total to 48 country profiles and five regional profiles. CAHF have again sought out new data sources, and rethought their approach to the affordability graphs. CAHF have been monitoring the news so that this yearbook reflects the current situation of housing finance markets on the African continent in 2015.
The Yearbook is intended to provide housing finance practitioners, investors, developers, researchers and government officials with a current update of practice and developments in housing finance in Africa, reflecting the dynamic change and growth evident in the market. It is hoped that it will also highlight the opportunities available for new initiatives, and help practitioners find one another as they strive to participate in the sector. While the general aim of the Yearbook is to offer a broad overview of housing finance and housing development in Africa, special emphasis is placed on the key challenge of housing affordability, and the critical need for housing products and finance that are explicitly targeted at the income profiles of the majority.
This has been a desktop study. Using the CAHF’s research as baseline material, further information on more recent developments was accessed from media reports, journal articles and practitioner websites. In some cases, material was shared with in-country practitioners. Of course, the yearbook is not comprehensive, neither in the scope of countries covered nor the data provided. It is intended as an introduction, with the hope that the detail provided will whet the appetite for more. CAHF invites readers to provide comment and share their experiences on what they are doing in housing finance in Africa.
Download the yearbook here.
FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2016 Housing Finance in Africa Yearbook.
The seventh edition of the Housing Finance in Africa Yearbook covers 51 African countries and five regions – an addition of three country profiles this year. CAHF have again sought out new data and refined our approach to the affordability graphs. CAHF have been monitoring the news so that the 2016 Yearbook reflects the current situation of housing finance markets on the African continent.
Download the yearbook here.
FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2017 Housing Finance in Africa Yearbook.
The eighth edition of the Housing Finance in Africa Yearbook covers 54 African countries and five regions – an addition of three country profiles this year. CAHF have again sought out new data and refined our approach to the affordability graphs. CAHF have been monitoring the news so that the 2017 Yearbook reflects the current situation of housing finance markets on the African continent.
Download the yearbook here.
FSD Africa’s partner, the Centre for Affordable Housing Finance has produced the 2018 Housing Finance in Africa Yearbook
The 9th edition of the Housing Finance in Africa Yearbook covers 54 African countries and five regions, and is produced in both English and French. Targeted at housing finance practitioners, investors, developers, researchers and government officials, the 2018 Yearbook provides an up-to-date review of practice and developments in housing finance and delivery in Africa, reflecting the dynamic change and growth evident in the market of each country over the past year. In addition to 54 country chapters, regional profiles for Southern, West, North, Central and East Africa discuss trends and provide useful reviews of regional developments, including infographics to present and summarise critical data points, including mortgage lending terms, the price of the cheapest newly built house, and rankings on the ease of doing business.
The publication is produced annually by FSD Africa’s partner, the Centre for Affordable Housing Finance (CAHF), with the contributions of over 30 local experts throughout the continent.
This year, CAHF focus on the theme of innovation, and highlight the examples of innovation that can be found along each link in the housing value chain, as government, the private sector, households and communities find their places in the housing ecosystem. Each of these innovations is identifying a market niche and then working with the opportunities provided by new technologies, adaptive experience, and entrepreneurial curiosity to develop real products and services that are essentially creating brand new markets. Innovation along the value chain and at the local level is making headway and creating precedent that is bankable. The 2018 Yearbook highlights these potential investment opportunities available in each country context, and helps practitioners find one another as they strive to participate in, and advance, the sector.
Download the yearbook here.
FSD Africa Investments (FSDAi), the UK-backed specialist development finance investor, is investing GBP 10 million into ARM-Harith’s Climate and Transition Infrastructure Fund (ACT Fund) to unlock local institutional capital for climate infrastructure. ARM-Harith Infrastructure Investment Limited is a leading African private equity firm committed to catalysing economic growth through sustainable infrastructure.
ARM-Harith and FSDAi’s investment introduces an innovative solution to allow Nigerian pension funds to address a longstanding challenge in infrastructure equity finance: the ability to invest while receiving early liquidity. By enabling predictable interim distributions during the early phases of investment, this innovative facility directly addresses a key barrier that has historically deterred domestic institutional capital from entering the asset class.
In addition, 75% of the FSDAi facility will be provided in local currency — a first-of-its-kind approach specifically designed to mitigate the impact of foreign exchange volatility for pension funds. This structure is expected to unlock an additional GBP 31 million in pension fund contributions — nearly five times the participation achieved in ARM-Harith’s first fund.
FSDAi’s investment aligns with its broader mission to deepen African financial markets towards accelerating the financing of Africa’s green economic transformation and will support the Fund’s investments in climate-resilient infrastructure including energy, transport, water, and digital connectivity. In alignment with at least four of the UN’s Sustainable Development Goals, the initiative is projected to create or support approximately 3,000 green jobs.
The British Deputy High Commissioner in Lagos, Mr. Jonny Baxter said,
“The UK government, through its bilateral and investment vehicles is committed to continue to support the country’s financial sector — developing domestic capital markets as a means of financing priority sectors and driving economic development. Local currency capital helps mitigate the impact of foreign exchange volatility, narrows the financing gap, supports diversification into new asset classes and into climate-related projects and social sectors – while providing long-term funds to growing businesses.”
Announcing FSDAi’s investment, FSDAi’s Chief Investment Officer, Anne-Marie Chidzero said:
“We are thrilled to collaborate with ARM-Harith to showcase how risk-bearing capital from a market-building investor like FSDAi can be strategically structured to unlock domestic institutional capital. This approach strengthens Africa’s financial markets and facilitates capital allocation towards sustainable, green economic growth across the continent.”
ARM-Harith CEO Rachel Moré-Oshodi emphasized the significance of this investment:
“For too long, domestic pension funds have remained on the sidelines of infrastructure equity due to liquidity constraints and heightened perception of risk. We are proud to have collaborated with FSDAi to design a pioneering solution that reduces risk for pension funds while delivering both early liquidity and long-term capital growth. This is a global first—a groundbreaking private sector-led solution that could fundamentally change how infrastructure equity is financed—not just in Nigeria, but across Africa.”