MICROCAPITAL STORY: Black Investors PLC of Britain Lends $13m to Microfinance Institution (MFI) Kagisano of South Africa

Black Investors PLC, a British investment company, has granted a ZAR 100 million (USD 13 million) long-term loan facility to Kagisano Financial Enterprises, a South African mass market credit provider.

The loan will be earmarked for Kagisano’s advances book, bringing its value to over ZAR 300 million (USD 39.1 million). It comes during a period of brisk growth for the company, which has been opening about three new outlets a month as it offers new products and its customer base becomes more affluent. According to CEO Eugene van Niekerk, demand for Kagisano’s products has remained strong in spite of a high interest-rate environment.

Black Investors PLC does not appear to have an Internet presence, and further information about the firm could not be ascertained.

Kagisano is a publicly traded company established in 2002, primarily as a micro-lender providing medium-term loans to medium- and lower-income groups. In recent years, as many previously disadvantaged South African consumers have moved into higher economic strata, the company has been broadening its range of financial services. As of August 31, 2007 (Annual Report), Kagisano had total assets of ZAR 182.5 million (USD 23.8 million), of which ZAR 119.5 million (USD 15.6 million) is listed as loans and advances. Calculated from financial statements, its return on assets was 1.75 percent and its debt/equity ratio was 68.6 percent. As for its credit rating, Kagisano does not report a third party performance evaluation of operations to the MIX Market, the microfinance information clearinghouse.

By Stephen Son

Additional Resources:

MoneyWeb: “Kagisano signs R100m loan agreement with UK-based Investment company”

Oanda: FX Converter

MIX Market: Profile for Kagisano

Kagisano: Annual Report 2007