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Date: 30 June 2020

Verdant Capital supports key Inclusive Finance sector initiative on debt refinancing coordination

Verdant Capital supports key Inclusive Finance sector initiative on debt refinancing coordination

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 the same critical treatment for its MSME clients. Globally and in Africa, loan disbursement activity is again increasing as lockdowns ease and adapt; at the same time, “traditional“ financial institutions such as banks are in many cases even more “risk-averse” towards serving MSMEs. The framework provided by the MOU in coordinating efforts for the provision on ongoing, responsible refinancing pathways has already provided several practical examples of support.

Verdant Capital has been proud to play a role in this effort, working with other the MOU signatories and other such stakeholders throughout the crisis on debt restructurings for specific situations, while also facilitating fresh debt and equity investment for its clients across the Continent. We also continue to align and promote via our engagements the other important related initiatives such as usage of the “Crisis Assessment Tool” and contribution to the “TA Coordination Group.” Verdant Capital has also led COVID-response initiative of its own including the highly successful Video Africa virtual investor meeting event.

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