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African Microfinance Sector M&A

Delivered April 8, 2020. Contributor: Estel M.

Goals

To populate the attached spreadsheet with a list of the most recent mergers and acquisitions within the Sub-Saharan African microfinance sector. Research will be used for comparison and to guide a sale price.

Early Findings

CIDR and Pamiga Merger

  • CIDR (Centre International de Développement et de Recherche) and Pamiga (Participatory Microfinance Group for Africa) announced their merger this January 2020.
  • The new entity named CIDR Pamiga will work to provide technical assistance and microfinance funding in Sub-Saharan Africa.
  •  CIDR is based in France but lists Sub-Saharan Africa as its regional focus.
  •  Pamiga operates in 10 Sub-Saharan African countries namely Bénin, Burkina Faso, Cameroon, Ethiopia, Madagascar, Mali, Sénégal, Ivory Coast, Gambia, Ghana, Kenya, Uganda, Chad, Togo, Morocco, Tunisia.
  • No financial details of the merger were publicly disclosed.

Sub-Saharan Africa Microfinance

  • The Inclusive Fintech 50 List presents 16 fintech companies focused on improving financial inclusion through microfinance in Sub-Saharan Africa in 2019.
  • These include Awamo, Inclusivity Solutions, and Matontine among others.
  •  Finextra reports that mobile money is one of the drivers of financial inclusion in Sub-Saharan Africa in 2018.
  • The joint Partnership for Financial Inclusion has worked with 14 microfinance companies to achieve universal financial access in the region.
  •  Borgen Project reported in 2018 that the microfinance industry in broader Africa has reached a gross loan portfolio of $8.5 billion.
  • Africa has also developed one of the fastest-growing bases for microfinance institutions.

Proposed next steps:

You need to be the project owner to select a next step.
The first hour of research provided an example of a recent merger within the Sub-Saharan Africa microfinance industry as well as potential pools of microfinance companies for further research. We recommend continuing research for an initial list of the 10 most recent mergers and acquisitions within the microfinance sector in Sub-Saharan Africa. (5 most recent M&A deals per request, 2 requests total) We will populate this spreadsheet: https://bit.ly/2xgjFX0. We will provide the date of acquisition, country/location, company acquired, acquiring company, deal size and stake, implied valuation and other financial values in the spreadsheet as available. If these are not publicly disclosed, we will attempt to calculate values based on publicly available data.
Alternatively, we can continue research to build a list of the 20 most recent mergers and acquisitions in the broader African microfinance industry. (5 most recent M&A deals per request, 4 requests total) We will populate this spreadsheet: https://bit.ly/2xgjFX0. We will provide the date of acquisition, country/location, company acquired, acquiring company, deal size and stake, implied valuation and other financial values in the spreadsheet as available. If these are not publicly disclosed, we will attempt to calculate values based on public data.
Alternatively, we can continue research to determine an industry benchmark for acquisition or mergers within the microfinance industry in Sub-Saharan Africa (or broader Africa as necessary). If this is not available, we will broaden the scope to the financial industry in general or use a comparable metric for deal sizes or valuation within this industry and geography.