One way to help people gain access to secure banking services is to invest in funds like the newly established private equity asset manager, Apis Partners, a strong partner for innovative investments in financial services, including in countries where people lack access to formal credit and banking services.

“Swedfund played a key role in helping us define our framework for ESG and gave us valuable feedback about how we could improve our ESG Due diligence process. Their focus on corporate governance in particular was of great help and we view Swedfund as one of our most important ESG partners,” explains Ravi Bhatt, Investment Associate and ESG and Impact Officer at Apis.

Of the 2.5 billion adults who currently do not have access to banking services, 2.2 billion live in growth countries in Africa and Asia. Technical solutions make it possible for more individuals to get access to the formal sector for financial services.

As incomes increase in these growth markets, the demand for financial services is expected to expand along with the need for innovative and cost-effective solutions.

With its first fund, Apis is aiming to raise a total of USD 250 million for investments in the financial sector in Africa and Asia. Although Swedfund is one of the smaller investors it is considered to be an important partner, especially in ESG issues, says Ravi Bhatt.

For Apis, ESG is not only a risk management tool but also a key concept for value creation. The Fund’s focus is on investments in companies that offer financial services, often through technical solutions and innovative business models, such as mobile payment services, savings, credit and insurance. The fund’s first investments were carried out in December 2015.

“We completed our first two transactions in December 2015 and January 2016. The first, MicroCred, is a group of micro, small and medium-sized lending institutions operating in Africa and Asia. The second, EPS, is an independent distributor of ATMs in Asia. We also have a strong pipeline of companies active in financial inclusion within various financial services in Africa and Asia,” says Ravi Bhatt.

For Swedfund the aim of the investment is to contribute to continued expansion and development in these growth markets.

“Historically there has generally been a lack of investments in infrastructure that makes it is possible to distribute products and services such as bank account withdrawals or deposits in banks or ATMs. This directly affects people’s ability to save, make secure payments or access other simple services,” says John Kristensen, Senior Investment Manager, Financial Institutions and Head of Fund Investments at Swedfund.

Products and solutions focused on Fintech – innovative technology solutions in the financial sector – are important tools that give poor people better opportunities to build up savings and use other financial services in emerging markets.

“The team at Apis possess a valuable combination of expertise in developing markets, the financial sector and financial technology. For Swedfund this represents a unique opportunity to strengthen our expertise in Fintech via a strong partner,” says John Kristensen.

This is how Swedfund works with sustainability

Environmental and social responsibility along with good business ethics and good corporate governance are the prerequisites for sustainable and profitable company investments over the long term. Swedfund’s ESG Action Plan is a key tool – both for the investment decision and monitoring. In each investment and for each individual company that Swedfund finances with loans or share capital an ESG Action Plan of measures to be taken is established to ensure that the company follows Swedfund’s Sustainability Policy. The Action Plan and compliance with the Sustainability Policy are followed up regularly.