The LeapFrog Financial Inclusion Fund, the world’s first investment fund focused on micro-insurance, has closed on US$44mn. Launched in 2008, the fund aims to invest in businesses that will bring insurance and financial services to 25 million low-income people in Africa and Asia.
The capital was raised from a diverse set of public and private investors around the world, including the European Investment Bank (EIB), FMO, Omidyar Network, Triodos-Doen, Hivos-Triodos Fund, ACCION International, Calvert Large Cap Growth Fund, wealth manager Felipe Medina, and the LeapFrog team. The team consists of former CEOs and pioneers in insurance and investment in emerging markets.
The estimated market size for micro-insurance is a billion people – less than 3% of whom now have any kind of insurance.
“The world desperately needs market-based solutions to poverty that draw in major financial investors by offering fair but competitive returns,” says Andrew Kuper, president and founder of LeapFrog.
“Promoting sound access to financial services through the private sector is a key element in achieving poverty alleviation and economic development,” says EIB’s vice-president, Plutarchos Sakellaris, announcing the bank's investment.
FMO’s chief investment officer, Jurgen Rigterink, adds that LeapFrog’s investment approach “will harness the power of entrepreneurship as a driver for economic development.”
Much attention has been paid to microcredit since Muhammad Yunus received the Nobel Prize for Peace for his pioneering work in the field. Yet “the future of financial inclusion lies in moving microfinance beyond credit, offering the working poor the suite of financial tools that we (in developed countries) take for granted,” says Monica Brand, a principal director of ACCION.
LeapFrog held a ceremony to mark the raising of this historic fund, on June 17, at the offices of the European Investment Bank in Luxembourg.
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