LOLC Africa Gets Additional USD 4.5 M Boost From Verdant Capital To Support MSME Lending

Verdant Capital has made an additional investment of USD 4.5 M in LOLC Africa through its Verdant Capital Hybrid Fund, bringing its total investment in the company to USD 13.5 M.

This latest round follows Verdant’s initial investment of USD 9 M completed in June 2023. Both tranches are structured as holding company loans, designed to expand LOLC Africa’s flexibility in allocating capital across its network of subsidiaries in Zambia, Rwanda, Egypt, Kenya, Tanzania, Nigeria, Malawi, Zimbabwe, Ghana, and the Democratic Republic of Congo.

The goal is to strengthen the balance sheets of its local subsidiaries, support their lending capacity to micro, small, and medium enterprises (MSME), and accelerate growth in markets where access to finance remains limited.

LOLC Africa is a subsidiary of LOLC Group, a Sri Lankan conglomerate with operations spanning financial services, agriculture, renewable energy, and more. Having built a strong presence in Asia for decades, LOLC entered the African market in 2018 by acquiring a controlling stake in Fina Trust Microfinance Bank, one of the leading microfinance institutions and has since established non-bank financial institutions across several countries.

Its model is centered on serving the “bottom of the pyramid,” expanding access to financing and deposit services for those typically left out of the formal financial system.

By targeting micro, small and medium-sized enterprises (MSMEs), the investment aims to support more than just business credit but also enable entrepreneurship, generate employment, and support income stability in underserved communities.

The investment comes at a time when many African MSMEs continue to face limited access to credit, often relying on informal finance or personal savings to fund operations. Financial inclusion remains a policy priority across the continent, and non-bank financial institutions like those operated by LOLC play a growing role in filling credit gaps.

The new investment is expected to help LOLC Africa expand the lending activities of its subsidiaries and strengthen their capital bases. This is especially important as the company looks to scale its operations, not just in existing markets but also in new countries where demand for MSME financing continues to grow. The funding supports both commercial ambitions and LOLC’s broader mission of promoting financial inclusion, creating jobs, and stimulating economic growth in low- and middle-income segments across the continent.

Beyond funding, Verdant has also offered support for the group through its Technical Assistance Facility. This support includes financing social ratings and client protection pre-certifications for subsidiaries in Zambia and Egypt, with further Technical Assistance initiatives in the pipeline.

For Verdant Capital, the investment in LOLC Africa aligns with its own strategy of selecting top-performing operators in each sector and delivers exposure across multiple African markets. The Fund’s investment is also yielding a return aligned with the Fund’s return target.

The transaction was advised by Suits & Advisors (“S&A”), which acted as financial advisor to LOLC.

The deal marks another milestone in LOLC’s African expansion and strengthens the long-term partnership between the two institutions.