Goodwell Investments takes stake in Ghanaian microfinance institution

October 24, 2016

Goodwell Investments, through its fund Goodwell MDC III, has invested in Innovative Microfinance, a microfinance institution operating in Northern Ghana.

The investment will help Innovative Microfinance extend its reach with five additional branches in the Northern, the Upper East and the Upper West Regions.

Els Boerhof, Partner of Goodwell Investments, said: “The investment in Innovative Microfinance aligns well with our strategy to reach more people in underserved geographies with suitable and affordable financial services by investing in scalable institutions in those regions.”

“nnovative Microfinance has a proven capability to provide financial services beyond customer-expectation, while maintaining a sound balance between social impact and shareholder return. Goodwell has a presence on the ground in Ghana through our joint venture with JCS Investments and we are looking forward to growing IML together with the founding shareholders Sheila Azuntaba and African Tiger Holdings,” she said.

Innovative Microfinance is a 100% Ghanaian-owned company that launched commercial operations in April 2009.

It aims to become the leading microfinance organization supporting micro enterprises in poor, rural areas, where financial inclusion rates are very low.

The company provides financial services tailor-made to rural areas and performs with a sound balance between social impact and shareholder return.

Its core business is to provide financial services to its target market by mobilizing deposits and granting loan facilities.

The main customers are market women and small business people, who often do not have a bank account.

Innovative Microfinance, headquartered in Accra, has a strong focus on underserved rural areas.

It currently operates three branches, that are strategically positioned to take care of the company’s operations within the ten regions of Ghana.

Today the firm serves about 7,000 borrowers and 10,000 depositors.

Its operations are structured along the highly efficient and widely recognized successful microfinance model of ASA in Bangladesh.

Innovative Microfinance also provides a range of services that go beyond financial intermediation, such as financial literacy trainings, financial advisory and training on business development techniques.

It is working together with the Canadian EnergyforEveryone Foundation to educate people on environmental issues and distribute energy-efficient cook stoves.

Sheila Azuntaba, founder and CEO of Innovative Microfinance, said: “Microfinance in Ghana has grown over the years due to financial policy reforms and the unwillingness of banks to supply credit to small businesses. There are three major barriers that hinder the scalability of microfinance programs and institutions, i.e. capital, capacity and costs.”

“We have taken an innovative approach to overcome these barriers by combining sustainable business practices with innovative technologies. Our objective is to provide a full range of financial services to the lower income markets and thus contribute to poverty reduction in Ghana,” she said.

Goodwell Microfinance Development Company III (Goodwell MDC III) is a business development company for financial inclusion, water & sanitation and SME’s in Sub-Saharan Africa.

The 10-year closed-end fund is currently open for investors with a target capital size of €20m.

The first closing took place in november 2014.

Goodwell MDC III’s Investors include social investors, foundations, family offices, development finance institutions, funds-of-funds and pension funds. Source: Africa Global Funds