The Diocese of London and City business leaders have have launched a new social investment fund for microfinance in Africa.

Arcubus was launched this week at a Guildhall dinner attended by the Bishop of London and President of Arcubus, the Rt Rev Richard Chartres, Patron of Arcubus, Sir Michael Snyder, City business leaders and microfinance experts.

The partnership emerged from the goals of Just Share, a coalition of churches and development agencies based at St Mary-le-Bow Church in the City, which aims to engage with the City on issues of global development and justice and encourage positive action in response.

Arcubus aims to raise £1m in 2010 through a combination of donations and investments in a Social Investment Bond issued by Citylife Ltd.

The money will be channelled to a partnership of microfinance NGOs who will offer small loans, savings accounts and insurance to some of the poorest people in Mozambique and Tanzania, enabling them to expand micro-businesses,create and sustain jobs, invest in health and education, and contribute to the economic growth of their countries.

Together, Opportunity International, the MicroLoan Foundation and Five Talents UK, three of the UK’s most established and proven microfinance NGOs will build four new banks and four microfinance offices in Niassa.

A fourth partner, Microfinance Without Borders, will arrange short-term microfinance placements in Kenya for City workers, enabling them to share their expertise and develop new skills and interests.

The money raised will help the Diocese of London to meet the target set out in the London Challenge to raise £2,012,000 for development in Africa by 2012.

The Rev George Bush, Rector at St Mary-le Bow Church and Chair of the Trustees at Arcubus, said: “Arcubus is a great example of London churches working in partnership with the City to encourage positive action on global development in Africa.”

Sir Michael Snyder, Patron of Arcubus, said: “Increasing trade and investment in Africa is crucial to its development - and to our own. Microfinance lays the foundations for new markets and prosperity.”

The Bishop of London, President of Arcubus, adds: “Arcubus offers a unique opportunity to overcome the injustice which denies so many people a share in our rich and fruitful earth. I commend it to you.”

The project has been welcomed by the UK Department for International Development as a way for UK businesses to support entrepreneurism and economic growth in Africa.