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Verdant Capital and KfW establish new fund to support micro, small and medium-sized enterprises (MSME) growth in Africa

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                                The fund will invest hybrid equity and subordinated debt instruments in inclusive financial institutions on a pan-African basis.
                            
                            
                                                
                            
                                                            JOHANNESBURG, South Africa, January 14, 2022/APO Group/ -- 
                                                        
                            Verdant Capital (www.Verdant-Cap.com) Hybrid Fund initially has  million of committed capital;  Support to micro, small and medium enterprises (MSMEs) through investment in financial institutions;  Better access to finance, job creation and income generation for MSMEs in Africa



Verdant Capital Hybrid Fund (VCHF) has reached its first closing with a committed capital of USD 36 million.  The fund aims for high development impact, including job creation and income generation through SMEs and micro-enterprises.  The fund will invest hybrid equity and subordinated debt instruments in inclusive financial institutions on a pan-African basis.  The fund will target specialized banks, microfinance institutions, leasing and factoring companies, fintech and other non-bank financial institutions.  A strong focus will be ensuring that investments meet high environmental and social standards.  The fund is targeting two more closings with a target final closing amount of 100 Mio.  AMERICAN DOLLAR.

The KfW Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), is contributing around USD 34 million to the VCHF.  In addition to KfW, the fund benefits from capital commitments from private investors, including VCHF's fund manager, Verdant Capital.

Verdant Capital, a pan-African investment manager, has a successful track record of advising and investing in the financial services market for MSMEs in Africa.  The fund is domiciled in Germany, but most of the investment team is based in Verdant Capital's offices in Africa.

The rationale for the fund includes addressing the gap in the market in terms of equity capital availability, similar to equity or hybrid capital in the inclusive financial institutions sector in Africa.  That capital is badly needed, even as the COVID-19 pandemic has eroded the capital bases of African lenders.  VCHF investments can be leveraged through traditional debt financing, attracting other investors and ultimately expanding lending to MSMEs.  The fund also aims to expand the use of such hybrid financial instruments in Africa and to contribute to the overall development of capital markets in Africa. 

The German federal government is providing an additional budget of USD 4.5 million for additional support measures.  The VCHF Technical Assistance Fund will help African financial institutions increase their MSME loan books, strengthen organizational capacities and improve responsible finance standards, and forms an important part of the VCHF's post-investment value-added strategy. bottom.
Verdant Capital and KfW establish new fund to support micro, small and medium-sized enterprises (MSME) growth in Africa

The fund will invest hybrid equity and subordinated debt instruments in inclusive financial institutions on a pan-African basis.

JOHANNESBURG, South Africa, January 14, 2022/APO Group/ —

Verdant Capital (www.Verdant-Cap.com) Hybrid Fund initially has $36 million of committed capital; Support to micro, small and medium enterprises (MSMEs) through investment in financial institutions; Better access to finance, job creation and income generation for MSMEs in Africa

Verdant Capital Hybrid Fund (VCHF) has reached its first closing with a committed capital of USD 36 million. The fund aims for high development impact, including job creation and income generation through SMEs and micro-enterprises. The fund will invest hybrid equity and subordinated debt instruments in inclusive financial institutions on a pan-African basis. The fund will target specialized banks, microfinance institutions, leasing and factoring companies, fintech and other non-bank financial institutions. A strong focus will be ensuring that investments meet high environmental and social standards. The fund is targeting two more closings with a target final closing amount of 100 Mio. AMERICAN DOLLAR.

The KfW Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), is contributing around USD 34 million to the VCHF. In addition to KfW, the fund benefits from capital commitments from private investors, including VCHF‘s fund manager, Verdant Capital.

Verdant Capital, a pan-African investment manager, has a successful track record of advising and investing in the financial services market for MSMEs in Africa. The fund is domiciled in Germany, but most of the investment team is based in Verdant Capital’s offices in Africa.

The rationale for the fund includes addressing the gap in the market in terms of equity capital availability, similar to equity or hybrid capital in the inclusive financial institutions sector in Africa. That capital is badly needed, even as the COVID-19 pandemic has eroded the capital bases of African lenders. VCHF investments can be leveraged through traditional debt financing, attracting other investors and ultimately expanding lending to MSMEs. The fund also aims to expand the use of such hybrid financial instruments in Africa and to contribute to the overall development of capital markets in Africa.

The German federal government is providing an additional budget of USD 4.5 million for additional support measures. The VCHF Technical Assistance Fund will help African financial institutions increase their MSME loan books, strengthen organizational capacities and improve responsible finance standards, and forms an important part of the VCHF‘s post-investment value-added strategy. bottom.

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