Verdant Capital arranges a revolving credit facility for Pan African Building Society
Verdant Capital has arranged for leading Zambian non-bank financial institution, Pan African Building Society (PABS) a revolving credit facility to support its invoice discounting and supply chain financing activities. The initial facility amount is USD 3 million, with the opportunity to upsize, and the financing is supported by technical assistance. The intention is that the financing structure will provide a platform which other funders may ultimately join.
PABS is a leading Zambian deposit-taking financial institution regulated by the Bank of Zambia under the Banking and Financial Services Act and the Building Society Act. The institution has a total balance sheet of approximately USD 30 million and the Hawkwood Mukwa Fund, a successful African fund focused on the SADC region, is the major shareholder. PABS has existed in its current form since its acquisition of the Industrial Credit Company in 2012 and the majority of its loans and advances are SME and corporate leases and loans. While continuing its successful retail and mortgage activities, the institution has been focused on broadening its product offering to SME and corporate clients. The invoice discounting product and related financing is part of this successful product innovation: clients of PABS will have the opportunity to discount their invoices against pre-approved debtors or buyers and receive early cash payments, thereby generating a new secured asset class in PABS’s loan book.
The transaction illustrates strong investor confidence in PABS as an institution, continued investor support for transactions in Zambia, as well as the breadth of bespoke financing solutions available to clients of Verdant Capital.