Approach.

Investment Approach

Equator partners with strong management teams to make equity investments in financial institutions with demonstrable opportunity to significantly enhance value and deliver superior social returns.  Our team is proactive and assumes engaged roles in the corporate governance of the companies in which we invest, to achieve greater scale and efficiency.

We have a track record of success investing with:

  • High-growth regulated institutions focused on extending financial access to micro-businesses and small business owners
  • Regulated banks capable of transformation to effectively serve micro-entrepreneur and small business customers
  • High performing institutions currently serving the micro- entrepreneur and small business customer that want to expand their products and services or expand geographically.
  • Financial institutions addressing the needs of under-served markets including women, rural residents, migrants and ethnic or religious minorities.

Investment Criteria

Equator is actively investing equity and quasi-equity on behalf of ShoreCap III in institutions with the following characteristics:

  • Types of Institutions: small business banks, microfinance institutions, and inclusive non-bank financial institutions (such as insurance providers, leasing companies, housing finance companies and fintech providers)
  • Investment Size: typically between $3 and $9 million
  • Geographic Reach: Institutions located in underserved high-growth African markets
  • Profitability: We aim to invest in fully profitable institutions
  • Local Management and Ownership: We seek financial institutions with a strong, experienced management team and Board, and a committed set of local investors
  • Responsible investment: Equator will evaluate sustainable social and environmental development practices, effective governance, and client protection practices during our investment process. Equator promotes forward thinking institutions that espouse responsible and ethical banking practices.

Our contribution

Equator has a professional staff of experienced bankers, investment managers and technical experts, all of whom work together to serve the interests of portfolio companies. The team’s capabilities include:

  • Prior executive management experience in banking institutions
  • Extensive track record of successfully working and investing in institutions across Africa
  • Deep understanding of opportunities, needs, challenges and constraints across the financial services industry
  • An unwavering commitment to the double bottom line of development impact and long-term capital appreciation.
 

Value Proposition

 
 
 

Through grant funding and a strategic partnership with CapPlus, Equator can offer subsidized assistance in the following areas:

  • SME diagnostics: assessing the financial institution's stage of development in 35 drivers of success in SME banking
  • Credit: products, processes, policies, portfolio management, operations and credit scoring
  • Markets: research, segmentation and sizing
  • Customer relationship management: client acquisition, retention, sales, marketing and cross-selling
  • Gender lens financial inclusion: achieving standards of gender equality internally and through client outreach
  • Risk management
  • Information technology: diagnostics, system upgrades, implementations and conversions
  • Human resources: leadership, staff development, performance management, employee engagement and human resources administration
  • Governance