Verdant Capital has announced that its Verdant Capital Hybrid Fund (the “Fund”) has completed an additional investment of USD 4.5 million in LOLC Africa Singapore Limited (“LOLC Africa”). This investment increases the Fund’s total investment in LOLC Africa to USD 13.5 million.
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Strengthening LOLC Africa’s MSME financing
The new investment follows the Fund’s initial investment of USD 9 million completed in June 2023. Both investments are structured as holding company loans directed towards LOLC Africa’s operating lending subsidiaries in Zambia, Rwanda, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo.
LOLC Africa entered the African market in 2018, expanding from its origins in Sri Lanka where it was founded in 1980. Verdant Capital Hybrid Fund remains the first external investor in LOLC Africa’s operations, underlining the Fund’s catalytic investment approach to financial inclusion.
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Technical assistance to support responsible growth
Alongside financial investment, the Fund’s Technical Assistance Facility (TAF) has provided support for LOLC Africa’s Social Ratings and Client Protection Pre-Certifications for its subsidiaries in Zambia and Egypt. Further technical assistance initiatives are planned.
The Fund’s involvement aligns with its strategy of investing in top-performing institutions in their categories. LOLC’s model targets the “bottom of the pyramid”, focusing on expanding access to MSME financing and customer deposits.
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Advancing financial inclusion and economic growth
The Fund’s investment will enable LOLC Africa to expand its lending activities across its African subsidiaries. The focus remains on providing support to micro, small and medium-sized enterprises (MSMEs), strengthening the capital bases of existing operations, and supporting potential new subsidiaries across the continent.
Through this expansion, LOLC Africa is aiming to promote financial inclusion, employment creation, income generation, and overall economic growth in the markets where it operates.
The Fund stated that its investment “is yielding a return aligned with the Fund’s return target”, while also contributing to initiatives that extend tangible benefits to underserved communities across Africa.
Diversified exposure across African markets
This latest investment represents a diversified exposure to multiple African markets as LOLC continues to scale its operations. The Fund’s partnership with LOLC Africa reflects a commitment to supporting sustainable and responsible financial growth initiatives across emerging economies.
