ECP Private Equity - Emerging Capital Partners

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04-Jun-2008


WASHINGTON, D.C. – June 4, 2008 – Emerging Capital Partners (ECP), an international private equity firm focused on investing across the African continent, today announced a $15 million investment in Blue Financial Services Ltd., a non-deposit taking micro lender serving 10 countries in sub-Saharan Africa.  ECP's investment, made in the form of convertible bonds and common shares, is part of Blue Financial's ongoing capital raising program to generate working capital and expand operations.  The company is listed on the Alternative Exchange Index of the JSE Securities Exchange. 

With the exception of South Africa, most sub-Saharan nations have banking penetration rates between 5 percent and 10 percent, which leaves the vast majority of people without access to retail banking services.  As a result, microfinance institutions serving this population have become increasingly popular and are evolving to encompass a wide range of financial services including savings, insurance, payment services and remittances.  For example, Blue Financial partners with governments and corporations to provide their employees with personal and home improvement loans, mortgages, funeral insurance, and access to telecom services.  Most repayments are made via direct debits or payroll deductions, which provide Blue Financial with a 97 percent collection rate. 

"Blue Financial's proven business model and the opportunity for growth across sub-Saharan Africa make the company an attractive private equity investment," said Tom Gibian, chief executive officer of ECP.  "The company also fits well into ECP's philosophy of investing in established, profitable businesses and successful management teams that need an inflow of capital in order to expand their operations." 

Since its inception in 2001, Blue Financial has grown to include over $140 million in assets and 190 branches throughout South Africa, Botswana, Namibia, Zambia, Malawi, Uganda, Tanzania, Kenya, Cameroon and Lesotho.  The company plans to launch operations in Nigeria this month through a joint venture with Intercontinental Bank Plc, one of the largest banks in Nigeria and a portfolio company of ECP.  Blue is also actively seeking other expansion opportunities throughout the continent. 

"ECP has a long and successful history of investing in the African financial services sector through our prior commitments in commercial banking and insurance businesses," said Genevieve Sangudi, managing director of ECP.  "We have studied the success of microfinance institutions throughout Africa, and we believe that Blue Financial is well poised to expand upon its position as a leading multinational micro lender."  

The investment in Blue Financial was made through ECP's $523 million ECP Africa Fund II.  The fund was established in December 2005 to capitalize on the numerous investment opportunities throughout Africa in sectors such as telecom, natural resources, financial services, agribusiness, transportation, and power and water. 


ABOUT ECP
Emerging Capital Partners (ECP) is the first private equity firm to raise more than $1.2 billion to invest in companies across the African continent.  The ECP team has an eight-year track record of pan-African investing.  The firm's investment strategy is focused on delivering consistently above-market returns to investors that are uncorrelated to the U.S. and other global economies.  For more information, please see www.ecpinvestments.com.


CONTACTS
Jennifer Gill, FD for ECP
212-850-5691
jennifer.gill@fd.com