Kenya’s growing financial services sector will be boosted by investments worth Sh9 billion from a new fund announced by LeapFrog Investments. The fund will invest in high growth businesses in Africa and Asia. Kenya is a priority country for the firm. LeapFrog is a dedicated equity investor in emerging markets financial services, with partner companies serving 22.7 million people across 16 countries.
“This is a highly attractive market, with strong fundamentals, including stable interest rates, currency and inflation; and an appealing investment environment,” said Dominic Liber, LeapFrog partner.
Kenya is the gateway to the East African region which, with its 150 million population, has a combined economy equivalent to $109bn, according to data from the World Bank and Economist Intelligence Unit. The financial services opportunity is vast, with insurance penetration rates below 4 per cent across Kenya, Tanzania and Uganda.
An actuary, Mr Liber has played a leading role for over a decade in insurance product design, regulation and reinsurance across the continent. “We will be looking to invest in financial services businesses with strong management teams, an appetite for growth and profitability, and a focus on the emerging consumer,” he said.
LeapFrog said it will make equity investments of up to Sh4 billion in a single company. These must be established businesses that deliver insurance, savings, pensions, investments, credit, remittances or payments. It has a strong track record in Kenya. In 2011, it invested in leading East African insurance group Apollo Investments Limited (AIL), a top regional insurer, providing a broad array of insurance solutions across Kenya, Uganda and Tanzania. LeapFrog also helped AIL to build its substantial health and motor insurance offerings, also piloting crop and livestock insurance offerings for farmers and rural communities, and a number of products for emerging consumers.
Ashok Shah, CEO of AIL said: “LeapFrog provides specialist and hands-on operational support to company management. Their experience and global reach have helped us penetrate new markets, most notably, offering services to the financially excluded.”
Backers of the new LeapFrog fund include leading development financiers CDC, DEG, EIB and FMO; six of the world’s leading insurers; three of the world’s leading reinsurers; major pension funds; and global asset managers.
