Verdant Capital Doubles Down: $13.5M Now Powering LOLC Africa’s MSME Expansion

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 brings the total investment in LOLC Africa to USD 13.5 million. This follows the initial investment of USD 9 million in LOLC Africa, completed in June 2023. Both investments are structured as holding company loans, and they are being directed towards LOLC Africa’s operating lending subsidiaries in Zambia, Rwanda, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo.

Founded in 1980 in Sri Lanka, LOLC entered the African continent in 2018. Verdant Capital Hybrid Fund is the first external investor in LOLC Africa’s operations, reflecting the Fund’s catalytic investment approach. These investments are driving the expansion of LOLC Africa’s micro, small and medium enterprises (MSMEs) financing footprint across the continent. Additionally, the Fund’s Technical Assistance Facility (TAF), has offered financial support for LOLC Africa’s Social Ratings and Client Protection Pre-Certifications for its subsidiaries in Zambia and Egypt, with further Technical Assistance initiatives in the pipeline.

LOLC is recognised as one of the top-performing global microfinance groups, and the Fund’s investment aligns with its strategy of picking the top performers in each theme or category. LOLC’s business model focuses on the “bottom of the pyramid”, increasing access to MSME financing and customer deposits, thereby advancing it financial inclusion objectives.

The Fund’s investment will provide LOLC Africa with more funding to support and expand the lending activities of its existing subsidiaries in Africa, primarily targeting MSMEs. Furthermore, the investment will strengthen the capital bases of the existing and potentially new subsidiaries in Africa. LOLC’s expansion of the MSME lending model is not only about pursuing its commercial ambition but is also a commitment to sustainable and socially responsible growth. By extending tangible benefits to those communities at the bottom-of-the-pyramid, LOLC Africa promotes financial inclusion, job creation, income generation, and overall economic growth.

This investment represents a diversified exposure to multiple African markets as LOLC continues to scale its operations. The Fund’s investment is also yielding a return aligned with the Fund’s return target, reinforcing the value of supporting high-impact financial inclusion initiatives in emerging markets.

Suits & Advisors (“S&A”) acted as an advisor to LOLC on this transaction.