Verdant Capital Hybrid Fund Invests USD 4.5 Million to Strengthen MSME Financing in Africa

Verdant Capital Hybrid Fund Expands Investment in LOLC Africa, Boosting Financial Inclusion Across the Continent.

Verdant Capital is excited to announce the successful completion of an additional investment of USD 4.5 million into LOLC Africa Singapore Limited ("LOLC Africa"), bringing the total commitment to USD 13.5 million. This follow-up investment follows an initial injection of USD 9 million in June 2023. Both investments have been structured as holding company loans, with the funds being directed toward LOLC Africa's operating subsidiaries in countries across the African continent, including Zambia, Rwanda, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo.

Catalytic Investment Approach: Expanding Financial Inclusion Across Africa

Founded in Sri Lanka in 1980, LOLC made its entry into the African market in 2018, driven by a commitment to serving the underserved populations across the continent. Verdant Capital Hybrid Fund is proud to be the first external investor in LOLC Africa’s operations, a significant milestone that highlights the Fund’s strategic approach to catalytic investments in emerging markets.

The total USD 13.5 million investment into LOLC Africa is part of a broader mission to support the growth of micro, small, and medium-sized enterprises (MSMEs) across Africa. Through this investment, Verdant Capital is reinforcing the Fund's focus on financial inclusion, job creation, and income generation, particularly in the underserved "bottom of the pyramid" segment.

The Fund's investment also plays a pivotal role in advancing LOLC Africa's commitment to expanding its MSME financing model, which targets areas in Africa where access to capital is most limited. These efforts are aligned with the broader objective of boosting economic growth and improving financial access for underserved communities.

A Strategic Partnership Focused on Financial Inclusion

The additional funding will be used to further strengthen the capital bases of LOLC Africa's existing subsidiaries in key African markets and to potentially establish new subsidiaries across the continent. This strategic partnership between the Verdant Capital Hybrid Fund and LOLC Africa is not just about pursuing financial returns, but also about facilitating tangible, long-term benefits for communities at the grassroots level.

LOLC Africa’s business model is centered on advancing financial inclusion by providing critical MSME financing and promoting customer deposits, making it one of the most effective players in driving the financial inclusion agenda in Africa. With a robust presence in key markets, LOLC is seen as one of the top-performing global microfinance groups, making it a natural partner for Verdant Capital’s focus on high-impact financial inclusion investments.

Additionally, the Fund’s Technical Assistance Facility (TAF) is contributing significantly to LOLC Africa’s operations. Through TAF, the Fund has supported LOLC Africa in achieving Social Ratings and Client Protection Pre-Certifications for its subsidiaries in Zambia and Egypt, with more initiatives expected in the near future.

Sustainable Growth and Community Impact

LOLC Africa’s strategy goes beyond commercial success. The company is deeply committed to sustainable growth and socially responsible business practices. Its mission is to create long-lasting benefits for the communities it serves, particularly in the areas of financial inclusion, economic development, and social empowerment.

Through its MSME financing, LOLC Africa is helping small businesses access the capital they need to grow and succeed. By targeting the lower-income population, the company is contributing to job creation, income generation, and overall economic development. This approach directly aligns with Verdant Capital’s goal of supporting companies that have a measurable, positive impact on the communities they serve.

The continued success of LOLC Africa's operations is not only beneficial for the company but also for the African economies it serves. This investment by Verdant Capital is an essential step in expanding the reach of MSME financing and promoting financial inclusion in regions that need it most.

Advisor Role: Suits & Advisors

Suits & Advisors (S&A) acted as the advisor to LOLC Africa on this transaction. With extensive experience in structuring complex investment deals, S&A provided critical guidance and support throughout the investment process.

Conclusion: A Strong Foundation for Future Growth

The Verdant Capital Hybrid Fund’s continued investment in LOLC Africa is a testament to the power of strategic partnerships in driving positive change in emerging markets. By supporting the growth of MSMEs and promoting financial inclusion across Africa, the Fund is not only achieving strong financial returns but also making a significant impact on the communities it serves.

As LOLC Africa continues to scale its operations across the continent, this investment will provide the necessary capital to support its expansion and further its mission of empowering underserved populations. With the continued support of Verdant Capital and other strategic partners, LOLC Africa is well-positioned for sustained growth and success in the years to come.