Tugende has raised USD 10 million in debt and equity capital from a consortium of investors arranged by Verdant Capital. This capital raise includes a strategic equity investment by Mobility 54, the Africa-focused investment fund of Toyota Tsusho Corp. This adds further strength to Tugende’s balance sheet and pushes the total balance sheet size above USD 30 million. Additional details on the equity raise can be found here. Tugende’s business has rebounded robustly after the lockdowns imposed in Uganda to help stem the spread of the COVID-19 virus. Since the relaxation of the lockdowns, Tugende’s client payments have recovered to […]
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One of Africa’s leading mobile money and digital remittances services provider, Zeepay, extends Visa payment solutions and credentials to simplify cross border remittances. Zeepay, a fast-growing African fintech, on 28 September 2020 announced a partnership with Visa that will allow Africans in the diaspora to send money directly onto Visa debit and prepaid cards in Ghana. Through the partnership, Zeepay will integrate Visa’s real-time push payments solution Visa Direct, with INSTNTMNY its money transfer platform, to provide users of the Zeepay app a fast, convenient and secure way to receive money and remittances directly into their eligible card credentials. This […]
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The Continent’s new intra-continental free trade agreement provides significant opportunity for small businesses. Open borders, improved contracts, and better structured value chains are some of the key benefits to small businesses from the African Continental Free Trade Area (“AfCFTA”). The AfCFTA commits the majority of the participating countries to 90 percent tariff cuts within a five-year period. The United Nations Economic Commission for Africa (“UNECA”) estimates that the AfCFTA has the potential to boost intra-African trade by 52.3% by eliminating import duties and could double trade if non-tariff barriers (“NTBs”) are also reduced. Micro, small and medium-sized enterprises (“MSMEs”), informal […]
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Retail Capital, a leading and first Merchant Cash Advance provider in the South African SME market, has retained its national BB+ credit rating from the Global Credit Rating (“GCR”) agency. Despite a downgrade in the sovereign rating of the South African Economy, which was hit even harder by Covid-19, the local small and medium enterprise (SME) financier has retained its national BB+ credit rating while its international rating has dropped by one notch to B- in line with South Africa’s credit downgrade in March, both ratings have a stable outlook. Local and international investors remain confident to place more funding […]
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Ethiopia recently announced two measures that represent hopeful steps towards opening its financial system to greater investment and sophistication. These measures could have positive implications for financial inclusion in the country. First, the National Bank of Ethiopia’s (“NBE”) passing of a directive on 18 August to allowing local currency banks to borrow from foreign banks. Ethiopia is one of Africa’s largest countries: its population of 115 million ranks second and its GDP size of USD 105 billion ranking seventh. Annual GDP growth has been one of Africa’s most dynamic, averaging between 8-12% annually since 2010. Potentially fueling future growth is […]
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Like elsewhere in Africa, the worst-case health impacts of Covid-19 in the DR Congo have so far not materialized. But like elsewhere, the economic impacts of the crisis have been swift and widespread. In response, the government announced several economic stimulus programs and initiatives. To increase liquidity and funding, the Banque Centrale du Congo (“BCC”) granted a moratorium on the increase in commercial banks’ minimum capital requirements to USD 50 million until January 2022. The BCC also opened a long-term funding facility for banks for up to 24 months and relaxed requirements on the classification of non-performing loans (“NPLs”), while […]
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Many businesses have been facing new challenges as a result of the COVID-19 Pandemic and related restrictions on ordinary life and commerce. While many businesses have enjoyed new opportunities, the net impact on most South African companies has been negative and many businesses have found themselves in financial distress. Verdant Capital is pleased to announce that it has partnered with the COBRA initiative – which stands for COVID Business Rescue Assistance. The COBRA initiative was established to provide assistance from professional advisors to South African businesses in need. Verdant Capital offers services both in respect of M&A advisory and restructuring […]
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Africa’s second-largest copper exporter was already burdened by high fiscal deficits and foreign debts heading into the crisis; Zambia’s budget balance was approx. a deficit of 17.6% of GDP with foreign exchange reserves representing import cover of only eleven weeks (Source: Fitch Solutions, June 2020). The COVID-19 pandemic has further constrained the sovereign’s external liquidity. Reflecting this risk, both Fitch and Moody’s downgraded Zambia’s long-term issuer ratings in April (to CC and Ca, respectively), citing the increased likelihood of a default event. Since then, the country has hired Lazard’s as advisor on a formal ‘liability management’ mandate in negotiations with […]
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Late last year, Ivorian President Alassane Ouattara and his French counterpart Emmanuel Macron jointly announced plans for the West African CFA Franc (the “XOF”) to be replaced by a new regional currency, the “Eco”, from mid-2020, reversing the decades-long currency regime in West Africa. The XOF is pegged to the EUR at 1 EUR to 655.957 CFA Francs. The critical tenant of the currency is that the French Treasury guarantees convertibility at this fixed-rate, in exchange for UEMOA-member countries depositing 50% of their respective reserves with the French Treasury. The timing of the December announcement was viewed with some surprise, […]
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Restricted access to finance for SMEs remains a roadblock to growth for economies worldwide. Africa remains no different, as SMEs typically provide 50% or more of the workforce in most countries, yet the SME “funding gap” perpetually totals in the billions of dollars. SMEs are continually frustrated by raising capital from traditional funding channels such as banks, who still typically require traditional (and expensive) information sources such as audited financial statements that few SMEs have a consistent need for or collateral security that few SMEs have access to. The current pandemic-induced economic crisis is accentuating this situation, with SME demand […]
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South Africa is poised to enter a phase of normality under “advanced” level 3 of the national lockdown as announced by the President of South Africa, Cyril Ramaphosa on the 17th of June 2020. South Africa entered level 3 on June 1, 2020. The “advanced” level 3 is a further relaxation of the lockdown. Most businesses will be returning to normal trading at this level. Following consultative discussions with scientists and industry leaders, the country is easing restrictions on certain business industries. Restrictions will be eased in South Africa for the following activities: Restaurants for ‘sit-down’ meals Personal care services, including […]
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Verdant Capital has signed the Memorandum of Understanding (MOU) on “Coordinating among MIVs in response to COVID-19”. Verdant Capital has long collaborated with other market participants on such initiatives and recognizes the constructive outcomes for the viability inclusive financial institution (IFIs) that can result from coordination and transparency at this critical juncture for the sector. Specific measures among lender groups to ease the burden on such institutions – such as consolidated reporting and liquidity forecasting templates and coordinated reconsideration of financial covenant thresholds and repayment schedules – can immediately alleviate liquidity pressures that provide these institutions with the ability to replicate […]
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Category: Opinion
Author: Edmund Higenbottam, Patrick Ball
Publication: Making Finance Work for Africa Blog
Date: 8 June 2020
Restricted access to finance for SMEs remains a roadblock to growth for economies worldwide. Economies across the African continent remain no different: in South Africa, where SMEs are estimated to employ between 30 and 50% of the workforce and contribute 20% of GDP[1], the estimated credit gap for SMEs in SA between $6 and $23 billion;[2] in Kenya, recent estimates put the MSME Finance gap as a percentage of GDP at 31%, totalling nearly $20 billion.[3] Similar estimates put SMEs providing 80% of the country’s employment and contributing 20% of GDP;[4] and in Côte d’Ivoire, 2016 government reports indicated that […]
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Category: Opinion
Author: Edmund Higenbottam, Patrick Ball
Publication: MicroCapital Monitor, May 2020
Date: 1 June 2020
This sponsored content was written by Edmund Higenbottam and Patrick Ball, who serve, respectively, as the Managing Director and a Director of Verdant Capital. Verdant Capital is a leading specialist financial advisory firm that operates across Africa. A combination of factors is challenging the economic sustainability of financial institutions and other businesses large and small across Africa. Globally, the COVID-19 crisis and associated lockdowns have had the effect of “calling the end of a long bull market” that has run since the credit crisis of 2008. In most African markets, however, the bull market had already ended some years before […]
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Verdant Capital successfully held its inaugural Video Africa virtual investor conference on May 5-7. Over the three days, more than 150 one-on-one meetings were held with over 50 leading relevant investors and eight of our selected clients with operations in seven countries across Africa, ranging from microfinance banks to credit-only institutions and “fintechs”. For the foreseeable future, logistical challenges, especially around travel, will impact how cross-border investment flows are negotiated and diligenced. Video Africa plays an important role in stimulating access to finance for these types of institutions working within the parameters of the “new normal”. Such funding is important now […]
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A combination of factors in the current environment is challenging the economic sustainability of businesses and financial institutions large and small across Africa. Globally, the COVID-19 crisis and associated lockdowns had the effect of “calling the end of a long bull market” since the credit crisis in 2008. In most African markets, the bull market had already ended some years before the pandemic. In Africa, the pandemic has compounded the difficulties presented by weaker commodity prices, sovereign credit challenges, volatile exchanges rates and uncertain public policy regimes. From an investment perspective, there has been an increasingly “risk-off” investor approach to […]
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Ghana has been taking steps to sustain its economy amidst the coronavirus pandemic and related lock-downs and has started multiple initiatives. African countries, in general, have taken a hard knock from the impact of the pandemic and most countries remain in the early stages. The Ghanaian government’s quest to ease the pain of small businesses from the devastating consequences of the novel coronavirus is expected to reach at least 200,000 companies, as said by the National Board for Small Scale Industries (NBSSI). Finance Minister Ken Ofori-Atta in March announced that as part of the Coronavirus Alleviation Program (CAP), an amount […]
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Zeepay Ghana has been awarded the Electronic Money Issuer (EMI) license to operate as a mobile financial services company by the Bank of Ghana, the regulator of banking and financial services. As a leading African fintech company with footprint in over 20 African markets, their service will now enable subscribers to utilise a complete set of mobile money services such as Cash In – Cash Out, Peer-to-Peer (P2P) Transfers, Micro Insurance, Mortgage Remit, Airtime top up, Bill Payment and Pension Collections all in partnership with third parties such as Insurance Companies, Banks, and Pension Trustees amongst others extending its current […]
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Verdant Capital’s clients have proactively addressed the pandemic-induced economic crisis, on behalf of staff and clients, acting in cooperation with stakeholders. The companies are looking ahead at their strategic positioning for the period post crisis. Some examples of the steps taken are set out below. Tugende, the leading MSME asset finance firm in East Africa, quickly suspended all penalties for two months and allowed clients to retain their assets and keep working where possible under local lockdown rules. Tugende also provided a $6.50 unconditional cash transfer to its 23,000+ clients across Uganda and Kenya to help with household essentials during […]
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Category: Financial Inclusion Africa
Author: MacDonald Gomo
Date: 30 April 2020
Following the successful closing of a 2.3-million-euro equity capital raise, Planet42 is seeking local and hard currency debt funding from specialist investors for the expansion of its second-hand vehicle long-term rental portfolio. Planet42 democratizes access to mobility by serving the financially excluded portion of the population – the people ignored by banks and other traditional financiers. The founding team of Planet42 has extensive experience in alternative vehicle finance and private equity in Africa. The CEO was previously a Country Manager in Mogo Finance while the CFO was the Head of African Investments for Trigon Capital. The customers of Planet42 are […]
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Verdant Capital is pleased to announce that it has become a Signatory of the Responsible Finance Forum’s Investor Guidelines for Responsible Investing in Digital Financial Services For more info click here
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Category: Media
Date: 25 March 2020
https://www.theeastafrican.co.ke/business/DR-Congo-open-for-business-as-Kenyans-come-calling/2560-5499778-t5qudvz/index.html
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Verdant Capital’s clients continue to translate social intent into real-world impact. To ensure it properly supports their impact objectives – and meaningfully aligns and contributes to best practices – Verdant Capital is continually enhancing its industry collaboration: CERISE SPI4: The SPI4 social audit tool, overseen by French NGO CERISE, assists financial institutions to better evaluate their implementation of the Social Performance Task Force’s “Universal Standards for Social Performance Management”, including the Smart Campaign’s Client Protection Principles. The tool is now an industry standard. Verdant Capital participated in the SPI4 Steering Committee developing the new web-based tool, comprised of leading industry […]
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Category: Financial Inclusion Africa
Author: MacDonald Gomo
Date: 24 March 2020
The Central Bank of Nigeria (“CBN”) has updated its Revised Supervisory and Regulatory Guidelines for Microfinance Banks (“MFBs”) in Nigeria to support their continued development and sustainability. A recent financial sector report published by the CBN concluded that the MFB sector is facing headwinds, including increased competition (for origination and deposits) and increasing credit risk. This is considered the case, especially for the smaller institutions. With these conclusions in mind, in early March the CBN announced a new minimum capital requirement for MFBs, while also splitting the categories of licences from three into four. The new minimum capital structure, states […]
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Given the increasing restrictions on travel in most countries, due to the Covid-19 pandemic, some impact on cross-border flows of investment are inevitable. However, Verdant Capital is committed to maintaining its funding initiatives for its clients as pro-actively as possible. In fact, the work of specialist banks, microfinance banks, microfinance institutions, and fintechs in facilitating credit to the real economy in Africa is now more important than ever. Over the last five years, Verdant Capital has arranged for clients each year in early May one-one-one investors meetings in London. In 2020, May 5 to May 7, Verdant Capital is hosting […]
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Micro-, small- and medium-sized businesses (MSMEs) remain the engines of Africa’s economies. They are the principal job creators, and thus critical sources of liquidity. Paradoxically, most entrepreneurs behind these ventures do not have land or real estate to use as collateral to access expansion capital such as bank loans. A 2006 World Bank study affirmed this observation, reporting that 50% of credit applications to banks were rejected because of “insufficient collateral.” Microfinance plays an integral role in fulfilling this liquidity gap in Africa, as elsewhere, but is often insufficient, keeping many MSMEs from realizing their potential. Furthermore, weak creditor rights, […]
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APA Insurance Ltd (“APA”) is a Kenyan insurance company, providing index-based agriculture insurance to cover yields and livestock, providing farmers with a safety net. Index-based insurance is an innovative approach to insurance whereby payments are linked to easily measured environmental conditions known as an “Index” (e.g. the level of rainfall, yields or vegetation levels as measured by satellite) directly connected to the loss of agricultural output. When the Index exceeds a particular threshold, farmers automatically receive compensation. In Kenya, over 75% of farmers are smallholders and are especially vulnerable to the economic impact of climate change. APA covers more than 350,000 families throughout Kenya […]
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The Nigerian payments space has the two biggest electronic payment rivals going toe-to-toe in the market. Visa and Mastercard, two of the largest companies in the world, each with market capitalisations of multiple hundred billions of dollars, have been making investments in Nigeria in an attempt to complement their core business and increase their exposure to Africa’s largest economy. Between the two companies they have made four investments in the payments sector in Nigeria, in-keeping with similar investments made in other large emerging markets operators. It is estimated that the number of cards issued in Nigeria by December 2019 […]
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The Ghanaian government intends on digitising its public services by 2020, with the aim of achieving 100% paperless and cashless transactions. The West African country also intends to tag every household electronically, including informal settlements, with the aim of eradicating corruption in the country’s public sector. This initiative comes at a very interesting time for the country, with meaningful adoption by the consumer services sector of digital services, which include mobile money, cashless payment solutions, digital remittances and cloud-based services amongst others. Using technology to enhance the transparency and accountability of administrative systems will, in turn, achieve in the short term […]
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Solutions 4 Africa (“S4A”), a member of the VinMart Group of Companies, is the leading provider of water infrastructure solutions in the Democratic Republic of Congo (“DRC”). S4A’s two flagship projects shall impact close to 2 million people (roughly 2.5% of the country’s population) who will finally benefit from access to potable water as well as basic sanitation and hygiene facilities. The first project has been contracted by the state water utility, (REGIDESO), to provide potable water to approximately 500,000 residents of Kolwezi. The second, in a rural area close to Mbuji-Mayi, has been contracted by ENABEL (the Belgian Development Agency) […]
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