Evaluation of Africap Microfinance Fund

This report evaluates the achievements of AfriCap, an MFI equity investment fund in Africa. The AfriCap Microfinance Fund (AfriCap) was established in 2000 with a $14.6 million equity investment fund and a $3.8 million technical service fund (TSF). AfriCap aims to demonstrate the commercial viability of microfinance in Africa. The evaluation examines whether AfriCap has achieved its goal and whether the equity and TSF model has positive impacts on investee MFI performance. Findings include:

• AfriCap has proven to be a good high risk MFI investor in a challenging operating environment;
• AfriCaps technical assistance (TA), combined with strong, profit-oriented governance has yielded greater value than either element alone;
• AfriCaps participation has not improved investees ability to raise new capital, although it has raised their credibility in local capital markets;
• Fund investees seem committed to the low-income market and there is no evidence of mission drift;
• TSF has helped support AfriCaps infrastructure and human resource capacity and development;
• TSF has allowed AfriCap to support and participate in sector events.

Finally, the paper states that AfriCaps impact on supporting microfinance commercialization in Africa is debatable.