The German subsidiary of Verdant Capital recently agreed to lend USD 9 million from the Verdant Capital Hybrid Fund to support subsidiaries of Sri Lanka’s Lanka Orix Leasing Company (LOLC) Holdings that offer savings and loans in Africa. These institutions, which serve Democratic Republic of Congo, Egypt, Ghana, Kenya, Malawi, Nigeria, Tanzania, Zambia and Zimbabwe, are to use the proceeds of the loan to strengthen their capital bases and on-lend to micro-, small and medium-sized enterprises (MSMEs). A portion of the funds also may be used for LOLC to expand into additional countries. The goals of the wholesale loan include to boost “financial inclusion, employment creation, income generation and economic growth” in the target countries. Verdant Capital has agreed to support the loan with technical assistance funding.
LOLC Holdings, which is a unit of the Japanese conglomerate Orix, has operations in a range of industries in Africa, Asia and Australia. The organization was founded in 1980 and reported USD 264 million in profits for the year 2022 on total assets of USD 4.7 billion.
Verdant Capital Hybrid Fund invests in inclusive finance for small and medium-sized enterprises (SMEs) in Africa via instruments such as “preference shares, holding company debt and subordinated debt.” As of 2022, the fund has a volume of USD 80 million, with a target of reaching USD 100 million by 2024.
Verdant Capital, a Mauritius-based corporate finance firm with additional offices in Ghana and South Africa, provides capital raising as well as merger and acquisition advisory services to clients in Africa. These clients span the agri-business, renewable energy, business services, financial services and manufacturing industries.
By Anaya Jhaveri, Research Associate
Sources and Additional Resources
Verdant Capital press release
https://verdant-cap.com/verdant-capital-hybrid-fund-completes-a-usd-9-million-investment-in-lolc-africa/
LOLC Holdings homepage
https://www.lolc.com
LOLC Holdings profile
https://lolc.com/assets/pdf/LOLC-Profile-24-01-2023.pdf
Verdant Capital fund descriptions
https://verdant-cap.com/specialist-funds/
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