MICROCAPITAL STORY: Alitheia Capital, Goodwell Investments and JCS Investments Limited Open West African Microfinance Fund Targeted at $50m

A fund targeted at USD 50 million has been opened by Alitheia Capital, Goodwell Investments and JCS Investments Limited in Lagos, Nigeria. The fund will invest in and develop microfinance banks and organizations in Nigeria and Ghana. These three investment organizations will pool funds to provide commercial long-term capital which will support the start up and growth of microfinance institutions (MFIs). In addition, support to management teams and access to global microfinance expertise would be provided. The goal of the fund is to increase the outreach of MFIs and provide investors with a market rate of return.

Earlier this month Alitheia Capital, Goodwell Investments and JCS Investments presented the results of an in-depth study on the potential for microfinance in Anglophone West Africa which was intended to focus industry attention on the region. The findings showed that there was still potential for expansion of microfinance in the West Africa region. The challenges faced by MFIs in general were also recognized: inadequate financing, shortage of skilled personnel and an effective business model.

According to the Consultative Group to Assist the Poor (CGAP), Nigeria has a weak financial sector with the majority of Nigerians lacking access to formal financial services. A recent survey showed that 74 percent of adult Nigerians (64 million people) had never banked, only 15 percent of women have a bank account, and 86 percent of rural adults are unbanked. In the CGAP report ‘Diagnostic to Action: Microfinance in Africa’ to the end of 2006 Ghana had 630,000 borrowers (8 percent of the poor) and 3 million savers (36 percent of the poor).

Alitheia is an investment manager and advisor based in Lagos, Nigeria, whose mission is to broaden the ownership of businesses and real estate by enabling socially sustainable investing. Alitheia creates investment structures, provides project management and develops businesses. Its business services include Fund Management, Project/Business Incubation and Corporate Strategy and Development. No financial details or information about investors is available about Alitheia.

Goodwell Investments, based in the Netherlands, started operations in 2006 and is a for-profit business development company. It invests in entrepreneurial microfinance organizations on a socially and commercially sustainable basis. Goodwell Investments is the lead investor in Aavishkaar Goodwell, a business development company for the microfinance sector in India. A MicroCapital Story recently reported that Aavishkaar Goodwell was one of several investors in Bhartiya Samruddhi Finance Ltd (BSFL), a microfinance institution (MFI) based in Hyderabad, India. No financial details or information about investors is available about Goodwell.

JCS Investments is a Ghana-based financial services company licensed by the Securities and Exchange Commission. It operates as a fund manager and financial advisor. No financial details or information about investors is available about JCS Investments.

By Sally Levy, Research Assistant

Additional Resources:

Business Day: N7.3bn microfinance equity fund for Nigeria, Ghana

Alitheia Capital: Home

Goodwell Investments: Home

JCS Investments Limited: Home

Microfinance Event: Emerging Microfinance in Anglophone West Africa: May 6, 2009

CGAP report: Access to Finance in Nigeria: Microfinance, Branchless Banking, and SME Finance; Diagnostic to Action: Microfinance in Africa

MicroCapital Story: Bhartiya Samruddhi Finance Ltd, a Unit of BASIX Group, Raises USD 9.87m in Capital