Knowledge

SPECIAL REPORT: One Size Does Not Fit All – Restructuring for Uncertain Times, from Verdant Capital

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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 Inaugural Video Africa Virtual Investor Conference

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Date: 29 May 2020

Video Africa by Verdant Capital

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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Restructuring – time for a change in direction?

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Date: 29 May 2020

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 – digital payments in the Covid-19 era

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Date: 29 May 2020

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 granted EMI license by Bank of Ghana

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Date: 30 April 2020

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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Proactive Crisis Management – Enterprises Taking Action to Stay Ahead of Crisis

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Date: 30 April 2020

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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Verdant Capital advises Planet42 on its ongoing capital raising programme. Planet42 (formerly ‘CarGet’) is the fastest-growing provider of Rent-to-Buy vehicle finance in South Africa

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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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“Impact in Action” at Verdant Capital

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Date: 24 March 2020

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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CBN widens activities of Microfinance Banks

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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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VIDEO AFRICA by Verdant Capital

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Date: 24 March 2020

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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Collateral Registry for Movable Assets: Helping unlock access to finance for MSMEs across Africa

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Date: 28 February 2020

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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Kenya’s APA Insurance Ltd wins the 10th European Microfinance Award in recognition of its response to “Strengthening Resilience to Climate Change”

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Date: 28 February 2020

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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Battle of the electronic payment juggernauts

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Date: 28 February 2020

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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Ghanaian government intends on digitising public services by 2020

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Date: 4 December 2019

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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S4A’s activities improve water access

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Date: 4 December 2019

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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Verdant Capital commissioned in October its first survey of investment professionals working for leading Microfinance Investment Vehicles (“MIVs”) investing in Africa.

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Date: 4 December 2019

The survey results support our assertion that growth in senior debt funding available for microfinance/inclusive finance institutions has positively contributed to their growth, but also to the rising leverage levels for the sector as a whole. The key takeaways from the survey: 70% of participants responded that the amount of MIV funding available is growing. This response was consistent for the last and next twelve months prospectively, as well as for funds available to invest globally and also those specifically allocated to Africa. 50% of respondents confirmed that capitalization ratios for their MFI investees are lower than 12-18 month ago […]

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Patrick Ball joins the Johannesburg team as a Director

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Date: 17 October 2019

Patrick has joined the Johannesburg team as a Director. Patrick has over 14 years’ experience in investment management in both global private equity and microfinance investing. Patrick has worked at leading global investors including Doughty Hanson & Co, Deutsche Bank, Developing World Markets (DWM) and Incofin Investment Management. Patrick brings a broad range of skills and experience to Verdant Capital, including investment banking at Bear Stearns in New York and London, and as CFO of FINCA’s microfinance bank in the DR Congo. Patrick will be dedicated full-time to the Verdant Capital Hybrid Fund upon its first close. Verdant Capital is […]

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Verdant Capital opens Lagos office and hires IK Izedonmwen

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Date: 17 October 2019

Ikponmwosa (or Ik. for short) joined Verdant Capital in August, to open Verdant Capital’s Lagos office. Verdant Capital’s office in Lagos is the firm’s fifth office in the continent, the others being Johannesburg, Accra, Kinshasa and Ebene. The physical presence in Nigeria is expected to increase the amount of business the firm executes in Nigeria, a market where Verdant Capital has been active at different stages in the cycle. Ik has over 18 years investment banking experience in West Africa. Prior to Verdant Capital, Ik performed similar roles at firms including Citi, FBN Capital / FBN Quest Merchant Bank, and […]

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Mobile Money Market in Cameroon

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Date: 17 October 2019

In Cameroon, the opportunity in its mobile money sector is underpinned by high mobile penetration rates. More than 20 million Cameroonians out of an estimated population of 24 million are currently subscribing to the mobile phone and notwithstanding the reduction in subscriber numbers, significantly more Cameroonians have a mobile phone than a bank account!  In Central Africa, Mobile Money Operators (MMOs) can only offer Mobile Money in partnership with banks. MMOs are doing what banks have not done i.e. serving informal or unbanked customers i.e. 85% of Cameroonians. Efforts remain to be made as so far only 5 out of 14 banks operating […]

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Trustco Group Holdings ratings upgraded to B+(NA)/B(NA)

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Date: 16 October 2019

The JSE-listed financial services group Trustco Group Holdings reported a successful completion of its formal debt term-extension process with the lender group which reflects a positive outlook and provides clarity of funding for the business going forward. The successful term-extension unlocks potential new funding for Trustco Finance. Trustco Finance works in parallel with group company, Institution of Open Learning (IOL) an accredited tertiary learning institution leveraging technology to provide remote learning on a part-time basis. Trustco Finance is the largest part of the Trustco’s banking and finance segment. The other part of the segment is Trustco Bank which has an […]

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Tugende: MicroFinanza’s Financial and Social Rating Affirmation

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Date: 16 October 2019

Tugende, founded in 2012 in Kampala is a leading technology-enabled productive asset financing company. It has achieved notable growth milestones including the financial and social aspects of the business. MicroFinanza completed a financial and social rating recently to support the capital raising programme arranged by Verdant Capital and was the first rating since inception. This rating produced impressive results for an institution of this size as indicated below. Its financial rating of BB Stable indicates that the institution has good risk management and financial performance. Other aspects include adequate governance and strong market position. Tugende has reached a critical scale […]

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Verdant Capital has hired Brett Roberts as a Director and Head of M&A.

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Date: 14 August 2019

Brett is an experienced M&A banker who has worked at bulge bracket investment banks in London and Johannesburg including Deutsche Bank and Bank of America Merrill Lynch.  In a 21-year career, Brett has also worked in M&A at Rand Merchant Bank, as an M&A specialist at Vodacom, and earlier in his career as an equity research analyst and as a strategy consultant. Brett has experience transacting in a range of sectors, including telecoms, mining, financial services, media, technology, healthcare, and industrials. Brett started work last month and reports to Edmund Higenbottam, Managing Director of Verdant Capital.

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Ethiopia opening up its financial sector

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Date: 25 June 2019

  Ethiopia expands access to its financial sector as it has approved Equity Group Holdings, Kenya’s biggest lender by market value to open a representative office in Addis Ababa. This will allow Equity Group to provide remittance services by partnering with an Ethiopian lender to target the three million Ethiopians living abroad. Equity Group’s entry into the country will give the lender access to a combined 500 million people in its six markets of operation including Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo. However, Equity Group won’t be the first Kenyan bank to gain access into […]

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Financial Inclusion in Africa boosted by African Digital Financial Inclusion (ADFI) Fund

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Date: 25 June 2019

  African Development Bank (AfDB) launched the African Digital Financial Inclusion Facility (ADFI) in June which is designed to boost digital financial transactions as well as aiding safety in Africa. This facility is supported by the Bill & Melinda Gates Foundation, the Agence Française de Développement (AFD) and the Government of Luxembourg with the goal of financially including at least 320 million Africans, the majority being women by providing access to digital financial services. The fund aims to disburse a total of USD 400 M to up-scale digital financial services in rural and poverty-stricken areas by 2030. Focus will be […]

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Financial Inclusion Enhancement Through Technology

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Date: 25 June 2019

  Partnerships between financial institutions and technology firms allow financial institutions to utilise modern technologies such as Artificial Intelligence (AI) and Data Science to create advanced, technology driven products with a greater reach thus enhancing financial inclusion. Such institutions include Medina Islamic Finance, a digital microfinance platform focused on Africa, partnering with United Labs which is a data science venture studio based in New York that focuses on social impact enhancement in Africa. This partnership allows Medina to leverage machine learning and data science to improve its microfinance digital banking platform while United Lab’s AI technology and automated local language […]

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Financial Inclusion through Digital Savings

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Date: 7 June 2019

    The importance of financially including underserved and low-income segments and expanding access to formal financial services has led to the development of advanced, technology driven products across developing countries. Digital Financial Services (DFS) recognises that although there are strong saving tendencies among adults in low-income countries, the usage of saving products at financial institutions is still low. Digital savings however, is still blossoming and identifying the market, product and policies is important as all these factors influence the usage of digital savings. The essential components of digital financial inclusion include: retail assets, digital transactional platforms, devices and additional […]

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La Regionale S.A Engages CNPS as Part of its Digital Transformation Plan

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Date: 7 June 2019

La Regionale S.A. (“La Regionale”) and the National Social Security Fund of Cameroon (“CNPS”) have entered into partnership agreement. CNPS is the state agency in charge of social security. Social security started in Cameroon in 1946. The partnership agreement allows La Regionale, as part of its overall financial services activities, to remit social insurance and entitlement payments on behalf of CNPS. La Regionale is headquartered in Cameroon and it is one of the leading and profitable “2nd category” MFI – a licenced deposit-taking financial institution allowed to provide loans and advances to SMEs and individuals. La Regionale is planning to […]

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Mastercard aiming to create a cashless Africa

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Date: 7 June 2019

  The majority of Africa depends heavily on cash for retail transactions and as a result, there has been an increase in innovative digital payment systems from leading technology companies such as Mastercard. Cash hinders growth in Africa as it places a strain on economies through production costs, crime, corruption and fraud prevention as well as the dangers associated with carrying cash. Small businesses are also negatively impacted due to the costs associated with accessing, securing, transporting and storing cash which further constrains growth if they don’t have the facilities to accept electronic payments. Mastercard believes that expanding access to […]

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