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Sunday, May 28, 2023

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One Earth Future Foundation to launch Mali and Niger fund; targets first investment before end 2023

The One Earth Future Foundation (OEF) is looking to launch a new conventional-Murabahah mixed fund in Mali and Niger, targeting to make its first investment before the end of 2023, Abbey Ogunwale, the vice-president of strategic growth and business development at the OEF, told ISFI.

Also in the OEF’s pipeline is a Shariah compliant financial inclusion version of its Somali Credit Guarantee Scheme targeting women and youths.

“We are still in the process of designing the fund, but it will likely be an open-ended fund, offering both western debt products and Murabahah … Our goal is to make our first investments before the end of the year,” Abbey shared on the Mali and Niger fund.

The soon-to-be launched fund will be sector-agnostic and target SMEs with longer term products than the market is currently providing, allowing it to invest in the businesses themselves rather than the transactions they enter into.

“Our objective is to provide increased access to finance for the ‘missing middle’: entrepreneurs who are unable to profitably access microcredits and large-scale commercial financing, as we believe that this contributes to social resilience and, ultimately, peace,” Abbey explained.

The fund is codesigned with development finance institutions from Norway, Denmark and Sweden, namely Nordfund, the Investment Fund for Developing Countries and Swedfund. The OEF also plans to invest in the fund either directly or through its sister grantmaking foundation, PAX sapiens.

Noting its role of connecting foreign investors with Islamic investments, Abbey opines that the OEF fills an important niche by matching investors who are unfamiliar with Islamic financial solutions with entrepreneurs from markets which demand Islamic financial products.

In addition to working on the upcoming fund, the OEF is currently designing a second version of a Shariah compliant credit guarantee scheme, which it originally launched as the four-year Somali Credit Guarantee Scheme in 2018 under its Shuraako program, in partnership with the Swedish International Development Cooperation Agency and several Somali financial institutions.

“We are wrapping up a successful pilot and are designing a scaled-up financial inclusion version targeted to women, youth and other marginalized groups in Somalia,” Abbey shared.

Also ongoing is the OEF’s management of the US$28 million Murabahah-based Nordic Horn of Africa Opportunities Fund. ISFI previously reported that Swedfund, which the OEF will partner with again for the upcoming Mali and Niger fund, invested US$5 million in the Nordic Horn of Africa Opportunities Fund.

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