LeapFrog to inject GH¢375m into financial services

Ghana’s growing financial services sector could be boosted by investments totalling up to GH?375 million from a new fund announced by LeapFrog Investments.

A statement issued by Ernestina Boadi, Senior Communications Officer, Stratcomm Africa, and copied to the Ghana News Agency, said the GH?1.5 billion cedi fund would be invested in high growth businesses in Africa and Asia.

LeapFrog Investments is the world’s largest dedicated equity investor in emerging markets financial services, with partner companies serving 22.7 million people across 16 countries.

Ghana is a priority country for the firm, the statement said.

“With its liberal, stable market and forward-looking investment climate, Ghana is a regional leader,” the statement quoted Doug Lacey, LeapFrog partner. “Given the vast number of consumers demanding financial tools for the first time, the Ghanaian financial services sector is an exceptional investment opportunity.”

The statement said: “While Ghana’s economy is growing fast, less than 16 per cent of Ghana’s 20 million consumers save at a financial institution and only five per cent have insurance.

“But recent regulatory reforms have helped to make these products available to the majority of the population for the first time.”

As a result, the statement said, there was a rapidly expanding demand for financial services, and cited the pensions market, which it said was expected to expand by 400 per cent in the next four years.

The statement said: “LeapFrog’s fund will make equity investments of up to GH?180m in any one company. However, they must be established businesses that deliver insurance, savings, pensions, investments, credit, remittances or payments.”

LeapFrog had a strong track record in Ghana, it said, explaining that in 2012, LeapFrog took a majority stake in leading life insurer, Express Life, in what was at the time the largest private foreign investment in Ghana’s insurance industry.

“In March 2014, after successfully building the company, LeapFrog sold its stake to Prudential PLC, which was making its first step into insurance in Africa, and earlier this year, LeapFrog took a 25 per cent stake in leading independent pensions provider Petra Trust,” it said.

The statement quoted Mr. Kofi Fynn, Managing Director of Petra Trust as saying: "We decided to partner with LeapFrog because we found them to be unique for the specialist, hands-on operational support they offer to company leaders.

“LeapFrog is helping us build our reach into new markets and into the emerging consumer market in particular. They have extensive experience and deep know-how."

The statement said: “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”.