In an era of global economic uncertainty, African financial institutions are demonstrating remarkable resilience and innovation in their approach to capital raising and lending. Anusha Naidu, Head of Corporate Finance at Select Africa, recently shared insights into how her organisation is successfully operating across multiple African markets while building diverse funding relationships that span from local retail investors to international development finance institutions.
Building a pan-African financial platform
Select Africa has established itself as a significant player in the African financial landscape, operating as a Pan-African non-bank lending institution with a presence across six different countries on the continent. What sets the organisation apart is its recent expansion into property development, creating a diversified business group that can serve multiple sectors of the African economy.
As Anusha explains, her role focuses on "capital raising debt, structuring investor relations for the business" – a critical function that requires deep understanding of both local market dynamics and international investor appetite. This positioning allows Select Africa to bridge the gap between African opportunities and global capital.
The challenge of interest rate prediction
One of the most significant challenges facing financial institutions today is the unpredictability of interest rates. "It's very difficult to predict interest rates in the current climate," Anusha notes. "Every year we look at our crystal ball and try to have a market assessment of where rates will actually end up landing."
However, rather than viewing this uncertainty as purely negative, Select Africa has turned it into an opportunity for innovation. The limitations imposed by market volatility have actually enabled the organisation to "think about things quite differently" and develop creative solutions that might not have been considered in more predictable market conditions.
A diversified funding strategy
Select Africa's approach to funding exemplifies the modern African financial institution's need for flexibility and diversification. The organisation maintains what Anusha describes as "a diversified funding pool," which includes:
Listed instruments
Bond programs on exchanges in markets where they operate, providing access to local capital markets and retail investors through listed medium term notes (MTNs).
Private markets
Private placements and private credit arrangements that offer more bespoke structuring opportunities.
Bilateral arrangements
Direct loan agreements that can be tailored to specific investor requirements and business needs.
Diverse investor base
The organisation works with local corporates, institutions, international development finance institutions (DFIs), impact investors, and pension funds.
Currency flexibility
Operations in both local currency and hard currency, providing natural hedging opportunities and meeting different investor preferences.
This diversified approach isn't just about risk management – it's about staying responsive to market conditions and investor appetite.
The strategic value of private placements
When it comes to prioritising different funding sources, Select Africa takes a market-driven approach. "It's very much market dictated," Anusha explains. "We definitely try to follow what the market dictates, and who's got investment appetite."
Private placements hold particular appeal because of their bespoke nature. Unlike standardised public offerings, private placements allow for customised structuring, including specific covenant arrangements that can better align with both issuer needs and investor requirements.
Innovation in ESG integration
One of the most interesting developments in Select Africa's approach is the implementation of ESG (Environmental, Social, and Governance) ratchets—adjustments to credit risk premiums based on the achievement of specific ESG frameworks within the business.
"We view ESG integration as pricing for risk," Anusha explains. "As we are able to do that, we think that the note holder should recognise the good inroads that we've made in the business as well."
This approach represents a sophisticated understanding of how ESG factors can be integrated into financial structuring, moving beyond compliance to create genuine value alignment between borrowers and lenders.
The importance of investor relationships
Perhaps the most critical aspect of Select Africa's success is their commitment to maintaining close relationships with their investor base. This goes far beyond standard reporting requirements to include proactive communication about market conditions, risks, and opportunities.
"I would rather have the conversation with our investor pool, especially in private debt and private placements, rather than them hearing it in media," Anusha emphasizes. This approach builds trust and credibility while recognising that many international investors don't have "boots on the ground" in African markets.
The organisation serves as a crucial information bridge, helping international investors understand local market dynamics, economic cycles, and country-specific challenges that might not be apparent from a distance.
Managing geopolitical risks
Operating across multiple African countries inevitably involves navigating complex geopolitical landscapes. As Anusha notes, "We are living in such uncertain times. We living amongst wars happening, political regimes falling quite quickly, protest actions, etc."
However, Select Africa's approach to these challenges is pragmatic rather than paralyzed. The organisation recognizes that political uncertainty "is not a new phenomenon for us in Africa" and has developed strategies to manage these risks:
Hedging strategies
Implementing hedging structures for hard currency transactions to mitigate foreign exchange and political risks.
Operational continuity
Maintaining close contact with in-country teams to ensure safety and operational continuity during periods of instability.
Investor communication
Keeping investors informed about on-ground developments to maintain confidence and transparency.
Diversification
Rather than relying on single funding sources or investor types, successful institutions build diverse funding ecosystems that can adapt to changing conditions.
Relationship-driven approach
In uncertain markets, the quality of investor relationships becomes even more critical than in stable environments.
Innovation through constraint
Market limitations can drive creative solutions that ultimately strengthen business models.
Local knowledge as competitive advantage
Deep understanding of local markets becomes a valuable service for international investors.
Looking forward
The African financial services sector continues to evolve rapidly, driven by both local economic development and increasing international interest in African opportunities. Organisations like Select Africa are demonstrating that success requires more than just capital – it demands sophisticated understanding of multiple markets, creative structuring capabilities, and the ability to build trust across diverse investor communities.
As global investors increasingly recognize Africa's potential, the institutions that can successfully bridge local opportunities with international capital will play crucial roles in the continent's continued economic development. Select Africa's diversified, relationship-focused approach provides a compelling model for how this bridge-building can be accomplished effectively.
The key takeaway is clear: in today's complex global financial environment, success comes not from avoiding uncertainty but from building the flexibility, relationships, and innovative capacity needed to thrive within it.