CRRH is a specialist financing facility set up to channel long-term funding into regional mortgage markets by refinancing the mortgage portfolios of member/ shareholder banks of the West African Monetary Union. It provides valuable liquidity to multiple mid- to small-sized commercial banks providing property and housing loans across francophone West Africa. In 2013, the company issued XOF 20 billion (USD 40 million), for which the ALCB Fund invested XOF 1.5 billion (USD 3.1 million) in a 10 year amortizing bond.
CRRH plays an important role in stimulating mortgage lending, which at this time make up less than one percent of the region’s GDP. In particular, longer tenor of funding available allows member banks to provide more affordable mortgage to their clients while reducing total monthly debt service.
Bayport is a microfinance operator located in seven African and two Latin American countries. The ALCB Fund has invested in three of Bayport’s subsidiaries – in Botswana, Ghana and Zambia.
In 2013, Bayport Botswana had been growing at a rapid pace since commencing operations in 2010. The proposed investment ranked highly in terms of the ALCB Fund’s objectives of supporting issuers in the early stages of development to access capital markets, and enabling Bayport Botswana to increase local currency funding in order to reduce its FX exposure. Furthermore, Botswanan capital markets for private sector issuers are limited, and a Pula issue by the company represented one of only a handful of non-government issuances ever completed. The Fund opted to invest BWP 30 million (USD 3.5 million) in a three year bullet issuance totalling BWP 75 million (USD 8.7 million). While the Fund was initially above its 30% threshold, the anchor investment helped to bring new investors, including local institutions, into the note program over time.
The success of the first investment, and Bayport’s adoption of constructive processes including SMART certification and new pro-poor products, led the Fund to agree to a second investment in 2015. The second investment was for a BWP 20 million (USD 2 million), five year amortization bond.
The ALCB Fund also invested in Bayport Zambia, another member of the Bayport Group, but a separate legal entity. Bayport Zambia is the nation’s largest microfinance institution and, in 2014, it wished to issue its first bond to raise local currency funding following a series of devaluations in the Kwacha. The Fund invested ZMW 20 million (USD 3.2 million) in the company’s ZMW 200 million (USD 32 million) medium term note programme.