Swedfund Invests in Southeast African Microfinance

Stockholm (NordSIP) – Following last week’s announcement of its investment in Vietnamese SMEs, Swedfund has now disclosed an investment in improved access to finance for public sector employees in Eswatini, Lesotho and Malawi via a loan of up to US$15 million to the microfinance institution Select Africa.

Eswatini, Malawi and Lesotho, in Southeast Africa, are facing growing development challenges at a time when global aid is changing, with urgent needs in health, education, climate change resilience and youth unemployment. The countries are heavily dependent on international financing, which is crucial to strengthening their economies.

Swedfund’s loan aims to support low-income earners, who are often faced with restrictive credit policies from banks and other financial institutions.

“With this loan, we are increasing the opportunities for low-income earners to obtain financing that contributes to their livelihoods and productive activities, for example to start a small side job, expand agriculture, cover education costs or build a house. This contributes to human development for many families and in turn promotes the potential for local economic growth and more jobs,” says Jane Niedra, Head of Financial Inclusion at Swedfund.

Select Africa’s typical client is a public sector employee who lacks access to finance through traditional banking channels. This is often due to banks’ reluctance to take on clients who are perceived as riskier and the fact that in many African countries it is not possible to take out loans or pledge real estate as collateral. Select primarily offers salary advances to generally disadvantaged and low-income white-collar workers, providing them with a path to a formal credit history and an improved, more stable financial situation.

Select Africa Finance Limited is a group that offers financial services to individuals and was founded in 1999, when the first branch was opened in Eswatini. The group currently has 19 branches in Eswatini, Lesotho, Malawi, Uganda and Kenya and a gross loan portfolio of US$108 million.

Stockholm (NordSIP) – Following last week’s announcement of its investment in Vietnamese SMEs, Swedfund has now disclosed an investment in improved access to finance for public sector employees in Eswatini, Lesotho and Malawi via a loan of up to US$15 million to the microfinance institution Select Africa.

Eswatini, Malawi and Lesotho, in Southeast Africa, are facing growing development challenges at a time when global aid is changing, with urgent needs in health, education, climate change resilience and youth unemployment. The countries are heavily dependent on international financing, which is crucial to strengthening their economies.

Swedfund’s loan aims to support low-income earners, who are often faced with restrictive credit policies from banks and other financial institutions.

“With this loan, we are increasing the opportunities for low-income earners to obtain financing that contributes to their livelihoods and productive activities, for example to start a small side job, expand agriculture, cover education costs or build a house. This contributes to human development for many families and in turn promotes the potential for local economic growth and more jobs,” says Jane Niedra, Head of Financial Inclusion at Swedfund.

Select Africa’s typical client is a public sector employee who lacks access to finance through traditional banking channels. This is often due to banks’ reluctance to take on clients who are perceived as riskier and the fact that in many African countries it is not possible to take out loans or pledge real estate as collateral. Select primarily offers salary advances to generally disadvantaged and low-income white-collar workers, providing them with a path to a formal credit history and an improved, more stable financial situation.

Select Africa Finance Limited is a group that offers financial services to individuals and was founded in 1999, when the first branch was opened in Eswatini. The group currently has 19 branches in Eswatini, Lesotho, Malawi, Uganda and Kenya and a gross loan portfolio of US$108 million.