In Africa, the need for microfinance is huge. But, according to Temitope Ola, founder and managing director of Investment Capital Trust (ICT), so is the potential. Just look at Nigeria.
“Nigeria is a country of entrepreneurs,” he says. “The spirit is there; what is lacking are the skills and our mission is to make those skills available to the business community. Our advisory team is there to support and train microfinance clients, enabling them to build capacity.”
ICT is a private development-orientated financial services and investment organisation that supports the principle of sustainable economic growth by developing stronger financial services institutions. The venture was set up four years ago in Switzerland to provide development finance to African business and to help build microfinance institutions in African countries.
ICT’s focus is to channel microfinance for small and medium-sized enterprises into the continent. Currently active in Nigeria and Ghana, it is looking to extend its activities to other countries of the region.
“Our aim is to provide development finance and strengthen the financial systems of emerging economies, primarily in Africa as a whole,” Mr Ola explains.
The company is talking to international organisations about channelling funds from the International Finance Corporation and several other bodies into the African economy. “We are working with the investment company IMI and its $100m capital investment fund,” Mr Ola says.
ICT’s business mix is structured around three separate but integrated development-orientated services lines. Development finance is the first objective, followed by asset management and capacity building.
With regard to the latter, the company organises training sessions for senior executives of African financial institutions and is highly active in disseminating information and providing training to institutions in emerging countries.
This year, ICT is organising the Nigeria International Investment Summit 2005, as part of the company’s initiative to promote and channel development finance and FDI to Africa.
ICT also organises training development programmes in Luxembourg and Switzerland. The latest seminar was held in Switzerland in early April and provided a unique forum for African entrepreneurs, leading international bankers, corporate finance and M&A experts to meet and discuss the opportunities and challenges of their home markets. Those attending the conference were able to discover the latest financing options available; meet investors and potential partners; share cutting-edge strategies for successful transactions and post-transaction integration; understand deal dynamics and innovative deal design and structuring techniques; and learn how to exploit M&A opportunities to achieve maximum results.
ICT is engaged in a broad range of activities in each of its three core business areas. In financial advisory services, the company provides clients with its expertise in mutual funds, pension schemes, securitisation and bonds, as well as a strong focus on building capacity in microfinance, which accounts for 80% or more of the business activity in Nigeria and other sub-Saharan nations. The corporate finance side of the business is engaged in project finance, M&A and divestitures, capital formation and fund raising. ICT asset management covers not only mutual funds, but also the key area of socially responsible investment.
The ICT fund that is being created in Luxembourg is structured to focus on what Mr Ola defines as social inclined investment to promote microfinance development projects in Africa. “We define this as investment that has a direct impact on the lives of individuals,” he says. “The name of the project is Social Alternative Investment, which differs from the traditional socially responsible investment, which does not necessarily achieve this goal of making a direct impact on people’s lives in poorer countries. Investors in this fund will not only enjoy financial returns, but will also have social alternative returns.
“The fund will be used to provide loan capital to microfinance institutions. It will be managed in a prudential way so that returns, as well as the assets of the fund, are guaranteed.”