Verdant Capital Hybrid Fund initially has USD 36 million of committed capital; Support for micro, small and medium-sized enterprises (MSME) through investment in financial institutions; Better access to financing, creation of employment and income generation for MSME in Africa
The Verdant Capital Hybrid Fund (VCHF) has completed its first closing, with USD 36 million in committed capital.
The fund aims to have a significant developmental impact, such as job creation and income generation through SMEs and micro-enterpreneurship.
On a pan-African scale, the fund will invest hybrid capital and subordinated debt instruments in inclusive financial institutions.
Specialist banks, microfinance institutions, leasing and factoring companies, fintech and other non-bank financial institutions will be targeted by the fund.
A major focus will be on ensuring that the investments meet stringent environmental and social standards. The fund is aiming for two more closings, with a final close sum of $100 million.
The KfW Development Bank is giving USD 34 million to the VCHF on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
Aside from KfW, the fund has received capital commitments from private investors, including Verdant Capital, the VCHF fund manager.
Verdant Capital, a pan-African investment firm, has a track record of successfully advising and investing in the financial services industry for MSME in Africa.
Although the fund is situated in Germany, the majority of the investment team is spread among Verdant Capital’s offices in Africa.