Verdant Capital has announced a significant boost to its investment in LOLC Africa, with the Verdant Capital Hybrid Fund committing an additional $4.5 million. This latest investment increases the total commitment to LOLC Africa to $13.5 million, following an initial investment of $9 million that was completed in June 2023.
The structure of both investments is designed as holding company loans, which are strategically allocated to LOLC Africa’s operating lending subsidiaries. These subsidiaries are spread across several African nations, including Zambia, Rwanda, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo. This widespread allocation underscores the fund’s commitment to enhancing financial services across the continent.
LOLC, originally founded in Sri Lanka in 1980, made its entry into the African market in 2018. Since then, it has positioned itself as a key player in the region, with the Verdant Capital Hybrid Fund being the first external investor in LOLC Africa’s operations. The infusion of capital from this fund is pivotal in supporting LOLC Africa’s mission to expand its presence in the micro, small, and medium enterprise (MSME) financing sector throughout Africa.
The business model of LOLC focuses on serving the ‘bottom of the pyramid’ demographic, aiming to enhance access to MSME financing and customer deposits. This approach aligns with the broader goal of advancing financial inclusion across the continent, ensuring that underserved populations have access to essential financial services.
The latest investment from Verdant Capital will provide LOLC Africa with the necessary capital to further grow the lending activities of its subsidiaries, particularly in the MSME sector. Additionally, it will bolster the capital base of both existing operations and potential new ventures across Africa, thereby reinforcing LOLC Africa’s capacity to meet the financial needs of small and medium enterprises in the region. This strategic partnership is set to play a crucial role in fostering economic growth and development in the African markets where LOLC operates.
