Why Africa
RISING GDP
Africa is the second-fastest-growing region in the world. We believe that the rate of return on investment is higher than anywhere else in the world.
HUGE APPETITE
Africa is now in the age of consumerism with the prediction of being the world‘s leading consumer market by 2050.
Doing business in Africa is now easier
Africa is now home to more international private firms due to the increasing adoption of seamless business policies, lowered corporate taxes, and strengthened regulatory and legal systems in some African countries.
LARGEST, YOUNGEST WORKFORCE
Africa is endowed with the worlds youngest population, which offers the continent a chance to reap a demographic dividend by using its young workforce to boost economic growth.
RISING TECHNOLOGY
Africa has leapfrogged into the digital age, sustained by low internet rates, increasing mobile penetration connectivity and mobile apps, which are reshaping youth culture and creativity.
TRADITIONAL LIQUIDITY CONSTRAINTS
Even more so than ever, traditional financing from banks and finance institutions is difficult to come by. Banks are highly risk averse and thus proving difficult for borrowers to find an avenue of financing that is easy to come by.
Alternative financiers in Africa are operating in a niche market where the opportunities for business are only going to increase.
AFRICA'S GROWTH IN CONTEXT
Africa’s combined GDP has grown at significant CAGR since 1970.
Environmental Impact
The generation of financial returns in emerging markets is increasingly being defined by not just monetary returns, but also impacts on the global environment.
• The size and scope of Africa’s environmental problems are increasing, and impact financing is a vital potential solution
• Agricultural and forestry account for two thirds of impact investments made in the past seven years
• UME has become increasingly aware of the impact that the funding to borrowers has on Africa’s land. Stringent due diligence processes to monitor this impact are implemented
Social Responsibility
For many, social responsibility has become a critical principle of global investing, particularly in Africa. The more proactive practices of impact and community investing can provide benefits that purely philanthropic interventions usually cannot always reach.
• Major opportunity for Africa to provide for its own food security needs, and possibly other countries’
• Top-down financing creates a natural chain reaction that empowers Africa to build up its own economy by stimulating demand
• Promotes market liquidity in a large, growing market
• Addresses social and market needs created by retraction of traditional financial institutions
• Provides opportunities to local businesses overlooked by the banking sector simply due to their size.
Investment benefits
Direct asset-backed lending in Africa provides a meaningful way to diversify a portfolio by providing equity-like returns paired with the risk profile of senior secured debt.
• High fixed income-type returns with comparatively lower risk
• Uncorrelated returns to other assets or markets
• Attractive trading margins
• Asset-backed lending secured by physical commodities
• Shorter investment tenors providing liquidity benefit
