IFC and TLG Capital Unveil $75M AGIF II Fund to Rescue African SMEs Amid Credit Stress

The fund is significantly anchored by IFC’s Distressed Asset Recovery Program (DARP), which has committed up to $20 million.

In a bold move to support Africa’s small and medium-sized enterprises (SMEs) and protect thousands of jobs across the continent, the International Finance Corporation (IFC) and TLG Capital have jointly announced the first close of the TLG Africa Growth Impact Fund II (AGIF II). With $75 million already raised, this private credit fund aims to provide strategic and flexible financing to distressed but viable SMEs, enabling them to stabilize and grow despite ongoing economic headwinds.

A Strategic Anchor: IFC and Development Partners

The fund is significantly anchored by IFC’s Distressed Asset Recovery Program (DARP), which has committed up to $20 million. The commitment is bolstered by key global development finance institutions, including Swedfund (Sweden), Norfund (Norway), Bpifrance (France), and the UK’s Foreign, Commonwealth & Development Office (FCDO) through its Manufacturing Africa initiative. This international coalition of backers reflects the growing recognition of the vital role SMEs play in Africa’s economic resilience.

Empowering Up to 20 Enterprises Across Critical Sectors

AGIF II intends to channel funds to approximately 20 SMEs across multiple African nations. These enterprises are often burdened by high-interest loans and shrinking access to affordable capital—particularly in times of global financial uncertainty. By collaborating with local African banks, the fund will offer tailor-made financing that bridges capital gaps and preserves business continuity.

The initiative spans essential sectors such as:

• Manufacturing – Enhancing local production capacity

• Healthcare – Strengthening critical service delivery

• Agriculture – Ensuring food security and rural employment

• Telecommunications – Supporting digital infrastructure

Addressing a Pressing Challenge

Statistics reveal that one in four SME loans in Africa is currently under stress, exacerbated by macroeconomic volatility and external shocks such as inflation, currency fluctuations, and supply chain disruptions. Despite these pressures, African entrepreneurship remains robust.

“AGIF II is our answer to that call for partnership,” remarked Isha Doshi, Co-Founder of TLG Capital. “It’s about capital that understands context—financing that’s flexible, strategic, and backed by advisory horsepower from McKinsey, BDO, ESS, and Ndarama Works.”

The fund distinguishes itself by combining financial investment with technical and strategic advisory support, helping SMEs not just survive but transform their operating models for long-term sustainability.

Mobilizing Private Capital for Development Impact

IFC’s Aliou Maiga, Director of the Financial Institutions Group for Africa, emphasized the broader mission:

“This initiative incorporates a strong mobilization component that aims to leverage private sector funding to enhance the growth of financially stressed but sustainable SMEs. The fund will support local businesses that provide job opportunities and vital goods and services, contributing to the inclusive growth of the communities where these companies operate.”

AGIF II also aligns with the United Nations Sustainable Development Goals (SDGs) by focusing on:

• Promoting gender equality

• Supporting local ownership and decent work

• Driving sustainable industrialization

• Targeting investment in the UN’s least developed countries (LDCs)

A Boost to Nigeria’s Manufacturing Sector

Speaking from Lagos, Jonny Baxter, UK Deputy High Commissioner, stressed the importance of local production:

“A strong manufacturing sector is key to driving economic growth and industrialization in Nigeria and across Africa. By supporting TLG Capital, we’re fostering greater capital flows into Nigeria, which in turn supports job creation, generates wealth, and secures a prosperous future.”

Building on DARP’s Track Record

Since its inception in 2007, IFC’s DARP has become a global leader in addressing distressed assets. With $9.2 billion committed—including $6 billion in mobilized capital—the program has helped banks offload over $46 billion in non-performing loans, directly impacting 21 million debtors by resolving their obligations. DARP’s methodology includes acquiring distressed assets, refinancing viable but overburdened entities, and working closely with banks on SME restructuring.

A Lifeline with Long-Term Vision

The launch of AGIF II represents more than just a financial intervention. It is a blueprint for building resilience in Africa’s SME sector—combining capital, strategic insight, and local partnerships to ensure that innovation and entrepreneurship are not stifled by temporary adversity. With coordinated support from global partners and a commitment to impact, this initiative is set to become a cornerstone of inclusive economic growth across the continent.