Although progress has been made in the past ten years, financial inclusion remains challenging across the whole of the African continent.
Goodwell Investments, the oldest impact investor in the Netherlands, has made its first foray into the Ugandan market with an investment in the Agent Banking Company of Uganda (ABC), a fintech focused on boosting access to quality and affordable financial services. No financial details were disclosed.
Amsterdam-based Goodwell, which was founded in 2006, made the investment through its €150m uMunthu II fund, which is focused on providing venture capital to impact-driven companies throughout Africa.
The investment from Goodwell “will be instrumental in the next phase of our growth, as we enrich our service range to encompass the full suite of basic financial services to be accessed through mobile phones, agents and merchants”, said ABC chief executive officer Richard Jabel.
‘Huge potential’
Since its foundation, Goodwell has launched five funds and currently manages over €330m in capital. The firm provides early-stage equity to high growth, high-impact businesses that deliver goods and services to underserved communities in India and Africa. Its 36 portfolio companies have reached over 30 million households in 72 countries worldwide.
Els Boerhof, managing partner and co-owner of Goodwell Investments, told Impact Investor in an interview in May 2023 that Africa offers “huge potential” for investors.
“It is very important people realise that economic cycles come and go and that this is a very interesting moment to step in,” Boerhof said at the time. “All I say is: ‘Don’t miss the boat’.”
As previously reported by Impact Investor, Goodwell last year launched a €20m fund with Oxfam Novib that will invest in sustainable agriculture, energy, clean mobility and logistics and waste management in East Africa.
Expanding access
ABC, whose platform provides the underlying technology that powers interconnected agent networks, was established in 2017 “to address a very real need to expand the reach and improve access to quality and affordable financial services in Uganda”, Jabel said.
According to the World Bank, 45% of sub-Saharan Africans over the age of 15 had no access to banking and financial services in 2021.
ABC will use the funds to grow its client base, boost its agent coverage, and deploy new services.
“With the introduction of Agent Banking, there has been exponential growth in the number of service points through which consumers can access and use formal financial services offered by over 15,000 authorised bank agents,” said Jabel.
This is turn has enabled previously underserved communities to gain access to a range of financial services across Uganda, he added.
