Sub-Saharan Africa (“SSA”) has 46 countries and a population of over 1 billion people. Around 66% of adults in SSA are unbanked – nearly half of all unbanked people globally live in Africa. The SSA banking sector remains underdeveloped but poised for growth. This lack of access, results is many detrimental outcomes including diminished prospects for employment, education, healthcare, and housing.
Inclusive Financial Institutions (“IFIs”) are seeking to bridge this gap by leveraging best practices, utilizing new technologies, reducing transaction costs and minimums. Mobile and digital technologies have helped boost financial inclusion and account ownership in SSA significantly in recent years. The focus activities for IFIs include: traditional microfinance; lending to Micro, Small and Medium-Sized Enterprises (“MSMEs”); housing finance; leasing; or specific segments such as education finance, health finance or agri-value chain financing. Many IFIs in this region are experiencing strong growth but lack access to sufficient debt and equity funding to sustain their growth trajectory and meet this end-market need.
Verdant Capital will be providing hybrid capital to Inclusive Financial Institutions in principally low and lower middle-income countries in Sub-Saharan Africa. Providing this capital is essential for these institutions to expand their financing operations and increase financial inclusion (i.e. banking the unbanked) in low income and lower middle-income countries in Africa.