September 2, 2020
Finnfund makes its first investment in the insurance sector by providing a USD 7.5 million loan to Softlogic Life Insurance PLC in Sri Lanka. The innovative and dynamic company is pioneering inclusive life and health insurance solutions in Sri Lanka and has today over half million low- and mid-income customers. By offering affordable insurance to emerging customers, Softlogic Life helps to increase resilience in unexpected situations.
“With Finnfund now entering the insurance sector, we aim to increase the insurance coverage in emerging markets”, says Finnfund’s Investment Manager Ulla-Maija Rantapuska. “With life insurance penetration of only 0.56% of GDP in Sri Lanka, the development impact that we expect from this investment is very strong.”
Protection of vulnerable people sits at the heart of the Sustainable Development Goals (SDG’s) and access to insurance is known to fight especially poverty (SDG 1) by preventing families from falling into poverty after facing a material or health related adverse occurrence. Insurance also provides protection against overwhelming healthcare costs, one of the top reasons for household poverty. Over 37% of people in Sri Lanka are living below the poverty line and supporting the insurance sector will be critical for their protection and sustainable growth of the country.
“Softlogic Life is the fastest growing life insurance company in Sri Lanka and this investment supports our ambitious growth plans. Our goal is to reach 3 million clients by 2025, says the Managing Director, Mr. Iftikar Ahamed from Softlogic Life.
Entering a new industry, Finnfund has paid close attention to the social responsibilities of the investment. “It is important for us as a financier to make sure that Softlogic Life follows the Client Protection Principles and makes sure that their customers know what they are paying for and under which conditions, and what are their rights to claim”, says Rantapuska.
Finnfund is committed to investing in businesses which boost women’s economic independence, entrepreneurship, leadership as well as their position and role in the marketplace. Investing in insurance helps to achieve gender equality: Insurance protects women from the financial impact of losing family members, helping women to retain their homes and maintaining the financial stability of the household. Together with Finnfund, Softlogic Life is working towards fulfilling the 2X Challenge criteria for gender lens investments, which means that the company is committed to empowering women both as employees and customers.
Finnfund’s financing is part of a loan package together with Norfund.
Investment Manager Ulla-Maija Rantapuska, tel. +358 41 536 5631, ulla-maija.rantapuska (a) finnfund.fi
Finnfund is a Finnish development financier and professional impact investor. We build a sustainable world by investing in responsible and profitable businesses in developing countries. Each year we invest 200–250 million euros in 20-30 projects, emphasising renewable energy, sustainable forestry, sustainable agriculture and financial institutions. Today Finnfund’s investments and commitments total about 957 million euros, half of them in Africa. The company has about 90 employees. For more information, please visit www.finnfund.fi
Softlogic Life Insurance PLC is a subsidiary of Softlogic Capital PLC and is part of the Softlogic Group, which is recognised as one of Sri Lanka’s most diversified and fastest-growing conglomerates with interests in Healthcare, Retail, ICT, Leisure, Automobiles and Financial Services. Significant stakeholders in the company include global investors Leapfrog Investments.