How BlueOrchard, a member of the Schroders Group, is contributing to positive change in South African communities

BlueOrchard’s partnership with the Small Enterprise Foundation (SEF) highlights how targeted impact investment can empower women entrepreneurs in rural South Africa.

BlueOrchard is an impact investment manager that became part of the Schroders Group in 2019. Its mission is to tackle the world’s most serious challenges by creating enduring positive societal and environment while aiming to provide attractive returns for investors. It does this by partnering with dedicated organisations around the world.

One such partnership is with the Small Enterprise Foundation (SEF) in South Africa, a non-governmental organisation (NGO) which operates as a microfinance institution (MFI) focused on providing funding to women micro-entrepreneurs through a group lending methodology.

SEF’s primary objective is to alleviate poverty, particularly in remote rural areas where access to financing for women is limited. In addition to providing funding, SEF offers financial literacy and entrepreneurship training conducted via mobile phones during monthly centre 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 is a leading lender in this space, with few competitors.

Jackline Onyango, Senior Investment Officer, BlueOrchard says: “SEF plays a crucial role in advancing financial inclusion for women entrepreneurs at the lower end of the economic spectrum in rural South Africa. Our relationship with SEF commenced in March 2020 and following an onsite visit and a virtual due diligence process we disbursed USD 10 million in November 2021.”

She explains that during BlueOrchard’s initial assessment of SEF, 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 the organisation an excellent fit for the BlueOrchard portfolio, especially considering its significant impact on financial inclusion.

Some key highlights include:

• Serving 175 136 clients
• In 7 different South African provinces
• 99% of clients are female

Covid’s influences
Onyago highlights 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.

She says: “Despite these challenges, we appreciated the SEF’s commitment to providing us with monthly updates on their recovery plan. Following the pandemic SEF stabilised the loan book and returned to normal operations. As a result, there has been growth and improved stability in portfolio quality.

“To capitalise on this positive momentum, we conducted another due diligence assessment in August 2024, which culminated in the disbursement of a further USD 3 million in November 2024.”

What comes next?
The fruits of BlueOrchard’s support can be seen in the success of SEF’s efforts to promote financial inclusion. With BlueOrchard’s backing, the MFI has expanded its outreach to seven provinces—successfully serving 175 136 borrowers, with an average loan size of USD 250. While there is still a long way to go, Schroders and BlueOrchard are encouraged by the positive impact the partnership with SEF has had on the local community in South Africa and is proud to be supporting an organisation that does such essential work in empowering women micro-entrepreneurs.

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