Swedfund invests 15 million Euro to reach MSMEs
Platcorp is a microfinance institution that provides credit to both MSMEs and individuals. Most formal jobs in developing countries are created by small and medium-sized enterprises. The lack of access to finance is one of the main factors limiting opportunities for SMEs. Swedfund's investments help to increase access to finance for small companies so that they can grow and create more jobs.
The Platcorp Group has a broad and efficient platform to provide access to finance for small companies and individuals in East Africa, which enables us to reach and support entrepreneurs and small companies in the region. In a context where several countries are undergoing challenging economic times, our investment will contribute to creating conditions for increased employment and financial inclusion, says Maria Håkansson, CEO Swedfund.
Platcorp has made significant progress on ESG since the last investment from Swedfund in 2018 been developing ESG policies and processes, building up an ESG team across the subsidiaries and working proactively on client protection and gender issues. Swedfund has been able to support Platcorp with technical assistance in running the Women4Growth program to support gender equality initiatives within the subsidiaries and also to pilot a climate resilient agricultural lending product.
Financial inclusion is about companies and individuals having access to useful and affordable financial products and services that meet their needs. It gives people the opportunity to safely build up their savings, access safe and cheaper money transfers and reduces the need to take out loans from informal lenders who often have extremely high interest rates.
Financial inclusion also contributes to strengthening small and micro-enterprises, promoting economic growth, creating jobs and more equality, and improving the living conditions of the poor proportion of a country's population.
Microfinance has long been seen as an opportunity to increase financial inclusion and promote the potential of the private sector in developing countries, which in turn can address challenges such as poverty, inequality and unemployment. Microfinance institutions (MFIs) provide microloans to entrepreneurs, small businesses, and low-income people, who can use the loans for the purchase of revenue-generating assets.
The microloans are an important complement to bank loans because banks often require a different type of security, credit history or only offer larger loans. Globally, 75 percent of the MFI market is currently located in Asia, while sub-Saharan Africa accounts for less than 10 percent.
Platcorp Holdings Limited (Platcorp) is an impact finance investment management holding company that primarily invests in non-banking lending subsidiaries. It was founded in 2003 in Kenya and expanded to Uganda in 2004 and Tanzania in 2008. Platcorp has operational entities in 6 East and Southern African countries and employ over 10,000 staff.
With a deliberate focus on driving Sustainability, the group provides a variety of microfinance, fintech and related products and services, from business and SME financing to tailored insurance offerings. In September 2022 Platcorp had a portfolio of approximately 245 mn USD and over 800 000 active clients.