Indian Ocean - 2010 - AfrAsia Bank

Promoting the emergence of a new Mauritian banking player with a regional focus

Start of the project: 2010
Financing: Equity participation for an amount of MUR 158M ($ 5M)
Partner : AfrAsia Bank

Background
 
In 2007 Groupe Mon Loisir (GML), Mauritius’ largest conglomerate, managing a portfolio of over 300 companies active in the fields of real estate, financial services, manufacturing, trade, tourism and food & beverage, undertook a diversification of its activities towards the banking sector and established AfrAsia Bank on the basis of an innovative Asia-Africa regional bank concept.
 
AfrAsia Bank, still majority-owned by GML via its two financial holdings (Compagnie d’Investissement et de Développement Limitée and Mon Loisir Compagnie Limitée), rapidly found its place in the very competitive Mauritian banking environment. Beside a classic transactional banking package, AfrAsia Bank offers financial advising and structuring services, leveraging on Mauritius’ attractiveness as a regional financial hub between Asia and Africa. Thanks to business relationships throughout the Indian Ocean region, the bank was able to expand its activities into China, Singapore, India and South Africa and now has representative offices in South Africa.
 
AfrAsia Bank was rapidly faced with the obligation to grow its capital base in order to allow further growth of its loan portfolio. Seeking a financial partner enjoying international reputation so as to establish its credibility, the bank therefore solicited equity participation from PROPARCO in 2010.
 
 
Objectives
 
Accompany the fragmentation of banking markets in emerging countries and support local financial institutions form a major strategic component of PROPARCO’s activities in favour of the banking industry. PROPARCO’s intervention therefore aims at contributing to ensure the continued existence of AfrAsia Bank and to support its high-paced growth. It is illustrative of PROPARCO’s efforts to build long-term partnerships with large Mauritius conglomerates and to accompany them with their investment strategy overseas, notably in Africa and Madagascar.
Through its participation in the transaction, PROPARCO also wishes to demonstrate its adherence to AfrAsia Bank’s vision of Mauritius as a value-adding platform for Africa-Asia financial flows, in line with the idea of development of the South-South trade fostered by AFD.
 
 
Project description
 
In 2010, PROPARCO subscribed to a capital raise as part of AfrAsia Bank’s fund-raising programme for an amount of MUR 158M ($ 5M) and thus acquired a shareholding stake in the bank.
 
 
Impacts
 
The equity raise operation will enable AfrAsia Bank to maintain the strong capital base required to allow continued growth of its loan portfolio.
As an AfrAsia Bank shareholder PROPARCO will also play a catalysing role, reinforcing the image of stability and the credibility of the bank vis-à-vis potential institutional and private investors and clients and therefore contributing to the emergence of a new player.

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