Connecting local institutional capital to real economic projects

East African credit guarantee firm, Dhamana, is making waves in the financial sector by connecting local institutional capital to real economy projects. The CEO, Chris Olobo, sat down with CNBC Africa to discuss the recent developments at Dhamana and the impact it is set to have on innovation and sustainable development across Africa. Olobo highlighted the significant investments Dhamana has received from various financial institutions, including the African Development Bank and the UK-backed Private Infrastructure Development Group, totaling $35 million. This influx of capital not only provides financial support but also lends credibility to Dhamana, positioning it as a key player in the region's financial landscape. The need for local currency financing in East Africa is evident, with businesses and projects requiring funds to mitigate risk and drive long-term growth. While there is substantial local currency held by banks, pension funds, and insurance companies in the region, a large portion remains untapped due to various challenges faced by borrowers and lenders. Dhamana aims to bridge this gap by acting as a catalyst to draw institutional capital into the productive economy, facilitating affordable and accessible financing for businesses and projects. The company's unique product, the Dhamana Guarantee, provides credit protection to institutional investors and lenders, enabling them to invest in projects that they may have previously considered risky. By offering guarantees for senior debt obligations, Dhamana reduces the risk premium for creditors, making it an attractive option for both large and small investors looking to diversify their portfolios. The structured finance space presents additional opportunities for Dhamana to support portfolio refinancing and drive efficient asset distribution, ultimately leading to greater access to affordable capital for borrowers. With a focus on public infrastructure, private financing, and structured finance, Dhamana is poised to make a significant impact in key sectors such as water projects, affordable housing, health care, and sustainable agriculture. The company's commitment to sustainable financing and green investments is evident in its goal to catalyze $100 million in local currency across East Africa in the next 12 to 24 months. Beyond the financial contributions, Dhamana also plans to leverage technical assistance from partners to promote better business practices among its portfolio companies, further enhancing its impact on the region's development. As Dhamana prepares to kick off its operations, the future looks promising for the company and its efforts to drive innovation and sustainable development in Africa.