The start of the journey

BlueOrchard’s relationship with the Small Enterprise Foundation (SEF) commenced in March 2020 with an onsite visit, just prior to the implementation of lockdown restrictions across various countries due to the pandemic. Although it was unable to proceed with disbursement at that pivotal moment, the team adapted by conducting a virtual due diligence session in early 2021. This proactive approach led to the successful disbursement of USD 10 million in November 2021.

Company background

SEF is registered as a non-governmental organisation (NGO) and operates as a microfinance institution (MFI) focused on providing funding to women micro-entrepreneurs through a group lending methodology. Its primary objective is to alleviate poverty, particularly in remote rural areas where access to financing for women is limited. In addition to funding, SEF offers financial literacy and entrepreneurship training conducted via mobile phones during monthly center meetings. These sessions allow the entrepreneurs to learn from one another and build a supportive community. Despite the inherent risks associated with small loans, SEF remains a leading lender in this space, with few competitors.

Driving impact

SEF plays a crucial role in advancing financial inclusion for women entrepreneurs at the lower end of the economic spectrum in rural South Africa.

During the initial assessment, it was identified that the average loan size was USD 130. This relatively modest sum empowers women to launch businesses, educate their children, and improve their overall quality of life. By addressing the specific challenges faced by these entrepreneurs, SEF plays a vital role in alleviating poverty—making it an excellent fit for BlueOrchard’s portfolio, particularly given its significant impact on financial inclusion.

  • Serving 186,657 clients
  • In 7 different South African provinces
  • 99% of clients are female
Covid’s influences

The pandemic posed significant challenges for the MFI, as lockdowns severely affected the entrepreneurs’ ability to operate their businesses. Most borrowers lacked savings buffers and struggled to sell their products, which resulted in a deterioration in portfolio quality and breaches of several covenants, including profitability.

Despite these challenges, BlueOrchard appreciated SEF’s commitment to providing monthly updates on the recovery plan. As borrowers gradually returned to group meetings, the Risk Pillar supported ongoing engagement by issuing a no-action letter while the MFI continued to be monitored on a monthly basis.

Key partnership

Following the pandemic, SEF stabilised the loan book and returned to normal operations. As a result, BlueOrchard has witnessed growth and improved stability in portfolio quality. To capitalise on this positive momentum, another due diligence assessment was conducted in August 2024, culminating in the approval and disbursement of USD 3 million in November 2024. This amount is lower than the previous offer, reflecting the shrinkage in asset value.

What comes next?

As support for SEF continues, BlueOrchard is excited to witness the organisation’s ongoing efforts in promoting financial inclusion. With this backing, the MFI has expanded its outreach to seven provinces—successfully serving 186,657 borrowers, with an average loan size of USD 210. Looking ahead, BlueOrchard looks forward to observing the positive impact of the partnership in the months and years to come, as SEF continues its essential work in empowering women micro-entrepreneurs.

Source of all data: SEF, as of December 2025.

– end –

 

 

Note: Any reference to sectors/countries/stocks/securities is for illustrative purposes only and not a recommendation to buy or sell any financial instrument/securities or adopt any investment strategy. This asset is an example constituent of an indicative portfolio and may not form part of the definitive portfolio. The definitive portfolio will evolve over time and may have different characteristics and allocations compared to what is presented above. Allocations/Exposures are illustrative and subject to change in the future

Important information

Marketing material for Professional Clients and Qualified Investors only.

The information in this document was produced by BlueOrchard Finance Ltd (“BOF”), part of Schroders Capital which refers to those subsidiaries and affiliates of Schroders plc that together comprise the private markets investment division of Schroders.

BOF has outsourced the provision of IT services (operation of data centres, data storage, etc.) to Schroders group companies in Switzerland and abroad. A sub-delegation to third parties including cloud-computing service providers is possible. The regulatory bodies and the audit company took notice of the outsourcing and the data protection and regulatory requirements are observed. For information on how BOF and the Schroders Group may process your personal data, please view the BOF Privacy Policy available at www.blueorchard.com/legal-documents/ and the Schroders’ Privacy Policy at https://www.schroders.com/en/global/individual/footer/privacy-statement/ or on request should you not have access to these webpages.

The use of UN Sustainable Development Goals (SDG) icons or logo, including the colour wheel, is for purely informational purposes. The use of SDG icons and/or any reference to the SDGs is non-promotional and in no way is intended to imply any affiliation with or endorsement by the United Nations.

Issued by BlueOrchard Finance Ltd, Talstrasse 11, CH-8001 Zurich, a manager of collective investments authorised and supervised by the Swiss Financial Market Supervisory Authority FINMA, Laupenstrasse 27, CH-3003 Bern.