AfriCap Governance

This case study evaluates governance at the AfriCap Fund, one of the first microfinance equity funds in Africa. In particular, the study assesses whether governance was carried out appropriately and whether the board and its committee, as well as the investors/shareholders, conducted themselves according to AfriCap’s mandate. The study also discusses the major factors influencing the achievement or non-achievement of AfriCap’s objectives. It analyzes AfriCap’s contribution to the overall strengthening of the MFIs in which the organization has invested. The study is based on information collected through interviews with key stakeholders in the microfinance industry and review of publically available reports. According to the study, the broad purposes of governance include:

• Define and uphold the social mission and purpose of the fund;
• Develop and approve strategic direction and monitor achievement of strategic goals;
• Foster effective organizational planning, including succession planning;
• Ensure that MFIs manage risks effectively;
• Oversee management performance, including selection, support, evaluation, and compensation of the chief executive officer;
• Ensure adequate resources to achieve the mission including assistance in raising equity and debt;
• Ensure that the organization changes to meet emerging conditions and uphold its ethical standards with transparency and avoid conflicts of interest.