Abler Nordic exits Baobab Senegal; strong social and financial returns achieved
Decade-long partnership has provided over 450,000 Senegalese entrepreneurs with loans, insurance and saving accounts
OSLO – 24.05.23
Abler Nordic today announced a successful exit from its investment in Baobab Senegal, a deposit-taking microfinance institution established in 2007 to provide banking services that help underserved micro-businesses and SMEs tap into their full entrepreneurial potential.
Abler Nordic (formerly Nordic Microfinance Initiative (NMI)) invested in Baobab Senegal in 2012 through the NMI Frontier Fund, seeing an opportunity to help create tangible impact for unbanked entrepreneurs in Senegal, alongside generating robust financial returns for investors.
Under its strong and competent leadership, Baobab Senegal has seen solid growth during Abler Nordic’s investment period, with widened outreach and a product offering developing from pure microloans into including savings and insurance products. During Abler Nordic’s investment period, Baobab Senegal’s gross loan portfolio has almost quintupled, and the number of borrowers and depositors has more than doubled.
Concrete progress on financial inclusion
Senegal has made substantial progress on financial inclusion over the last decade, with the proportion of adults with access to formal financial services nearly quadrupling from 2014 to 2021—among the largest increases in Sub-Saharan Africa (Global Findex 2021). Much of this growth in Senegal has been driven by digital payments, in which Baobab Senegal has been an active participant.
Between 2014 to 2016, Abler Nordic’s Technical Assistance (TA) Facility—funded by Norad—worked closely with the Company in developing digital branchless and mobile banking, making it possible to serve hard-to-reach rural customers and reduce transaction costs. A study on Baobab Senegal conducted by the World Bank between 2015–2016 concluded that the branchless banking project had resulted in poor households becoming more financially active, as measured through increased deposit and withdrawal activity.
Abler Nordic’s TA Facility has also supported Baobab Senegal with a project to obtain a Social Rating and another to enhance operations and outreach. Abler Nordic has been an engaged member of the board of Baobab Senegal since investing in 2012 and was instrumental in setting up a board committee on Social Performance.
Senegalese entrepreneurs provided with loans, savings and insurance accounts since 2012
“Since 2012, Abler Nordic has actively partnered with the highly competent Baobab leadership team in enabling opportunities for Senegalese entrepreneurs through access to much-needed financial services," said Arthur Sletteberg, Managing Director at Abler Nordic.
"As we hand the baton on, we are very pleased with how the company has grown, the impressive social results they have achieved, and the solid returns generated for our investors. We wish Baobab Senegal every success in their continued development and pursuit of their important social mission.”
Abler Nordic’s equity stake has been sold to Baobab Group; a financial services group with operations in seven African countries that Baobab Senegal is a subsidiary of, and which Abler Nordic is an equity investor in.
“Our collaboration with the Abler Nordic team is based on regular interaction and exchange of ideas," said Philip Sigwart, CEO of Baobab Group.
"Thanks to Abler Nordic’s contribution, Baobab Senegal has become a key partner for over 450,000 Senegalese small businesses and built up a strong team, launching innovative financial products for its small business customers.”
Baobab’s Senegal’s network today covers almost the whole of the country, with 59 branches and 439 banking agents in addition using branchless transactions. Despite substantial progress in financial inclusion in Senegal over the last decade, 44% of adults in Senegal still do not have access to appropriate financial services, illustrating the continued need for Baobab Senegal’s services.
As a leading equity investor in financial inclusion in emerging markets, Abler Nordic has invested a total of over USD 34 million in Sub-Saharan Africa, with current investments of USD 17.5 million.
About Abler Nordic:
Abler Nordic (formerly Nordic Microfinance Initiative) was established in Oslo in 2008 as a public-private partnership investing in companies in Africa and Asia that offer financial services to low-income households. Abler Nordic currently manages five funds, with total commitments of close to USD 350 million.
Investors include the Norwegian and Danish governmental funds for investments in developing countries (Norfund and IFU) and private financial institutions and family offices from Norway and Denmark. Since 2008, the Ministry of Foreign Affairs and Norad have contributed funds for currency hedging and technical assistance. Abler Nordic has offices in Nairobi, Delhi, Jakarta, Copenhagen and Oslo.
About Baobab Senegal:
Baobab Senegal opened its first branch in Dakar in September 2007. Today, Baobab Senegal has become a leader in microfinance, offering increasingly innovative, differentiated services that are unique on the market. Over the last five years, Baobab Senegal has disbursed loans for a total amount of more than CFAF 670 billion, financing nearly 150,000 Senegalese SMEs and micro-entrepreneurs.
About Baobab Group:
Baobab is a financial services group with operations in seven countries on the African continent and one province of China. Via its subsidiaries, Baobab provides financial services to half a million micro entrepreneurs and small businesses, fulfilling its mission of broadening access to funding among those underserved by traditional banks. Baobab’s global range of products includes micro-loans, savings solutions, transaction and daily banking services as well as innovative banking products like mobile payments, digital nano loans & pay-go solar products. Baobab’s 4,000 team members work together to make financial services more accessible, inclusive and transparent.
