Verdant Capital and KfW create a new fund to support the growth of micro, small and medium-sized enterprises (MSMEs) in Africa


Green Capital ( Hybrid fund initially has $36 million in committed capital; Support to micro, small and medium enterprises (MSMEs) through investments in financial institutions; Improved access to finance, job creation and income generation for MSMEs in Africa

Verdant Capital Hybrid Fund (VCHF) reached its first close with a committed capital of $36 million. The fund aims for high development impact, including job creation and income generation through SMEs and micro-entrepreneurship. The fund will invest hybrid capital and subordinated debt securities in inclusive financial institutions on a pan-African basis. The fund will target specialty banks, microfinance institutions, leasing and factoring companies, fintechs and other non-banking financial institutions. Emphasis will be placed on the compliance of investments with high environmental and social standards. The fund is targeting two more closes with a targeted final closing amount of 100 million. usd.

The KfW Development Bank, on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), is contributing approximately $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, an investment manager operating on a pan-African basis, has a successful track record in 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 offices across Africa.

The raison d’être of the fund is to fill market gaps in terms of the availability of equity, equity-like or hybrid capital in the inclusive financial institutions sector in Africa. This capital is essential, especially because the COVID-19 pandemic has eroded the capital of African lenders. VCHF investments can be leveraged through traditional debt financing, thereby attracting other investors and ultimately expanding lending to MSMEs. The fund also intends to expand the use of these hybrid financial instruments in Africa and contribute to the overall development of capital markets in Africa.

The German federal government is planning an additional budget of $4.5 million for accompanying support measures. the VCHF Technical Support Facility will support African financial institutions in growing their MSME loan portfolios, building organizational capacity and improving responsible finance standards, and is an important part of the fund’s post-investment value-added strategy.
Distributed by APO Group on behalf of Verdant Capital.

Media inquiries:
Green Capital:
Liezel van Greunen,
Phone. : +27 10 140 3700
E: [email protected]

KfW Development Bank
Dr. Charis Pöthig
Phone. : +49 69 7431 4683
Email: [email protected]

About Verdant Capital:
Verdant Capital is an investment manager and investment bank operating on a pan-African basis and specializing in private credit and private equity.

About KfW:
KfW is one of the largest and most experienced promotional banks in the world. Established as a public law institution in 1948, the German federal government holds an 80% stake and the German federal states hold a 20% stake in the bank.

The KfW Development Bank carries out financial cooperation (FC) projects with developing countries on behalf of the German Federal Government. The 1,003 head office employees and 409 experts in 68 regional offices cooperate with partners around the world. The aim is to fight poverty, ensure peace, protect the environment and the climate as well as ensure a fair globalization. KfW is a competent and strategic advisor on current development policy issues.

Verdant Capital and KfW create a new fund to support the growth of micro, small and medium-sized enterprises (MSMEs) in Africa


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