Verdant Capital, an investment manager and investment bank specializing in the private capital markets and operating on a Pan-African basis, has announced its plans to invest its Verdant Capital Hybrid Fund $9 million in the lending subsidiaries in Zambia, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo.
The Hybrid Fund is structured as a holding company loan in LOLC Africa Singapore Limited (Pvt) Ltd, which was founded in 1980 in Sri Lanka and entered the African continent in 2018.
According to a news report circulated by African Press Organization (APO) Group on behalf of Verdant Capital, the Hybrid Fund is the first external investor in the Africa operation and attests to the firm’s catalytic mission in the continent.
The firm stated that the investment would help expand LOLC Africa’s footprint of micro, small and medium enterprises (MSMEs) financing in Africa and is expected to benefit from initiatives supported by the Fund’s technical assistance facility.
Verdant Capital further clarified that the Fund’s investment would provide LOLC Africa with more funding to support and expand the lending activities of its existing subsidiaries in Africa, which are mainly targeted at micro, small and medium sized enterprises (MSMEs).
Similarly, the firm maintained that the investment would also strengthen the capital bases of the existing and potentially new subsidiaries in Africa.
Also, it pointed out that the LOLC’s expansion of the MSME lending model was not only about pursuing its commercial ambition but doing so in a sustainable and socially responsible manner to deliver tangible benefits to those communities at the bottom- of-the-pyramid, who are often underserved by formal financial institutions including commercial banks, thereby promoting financial inclusion, job creation, income generation, and economic growth.
The investment represents a diversified exposure to different markets in Africa following LOLC’s entry into Africa and as they scale their African business.
The Fund grossed $36 million as at First Close in December 2021 and has a target of $100 million at Final Close in 2024.
