Swedfund invests US$10mn to enable small and medium-sized enterprises, SMEs, in sub-Saharan Africa to access growth capital and thereby expand their operations. The investment is in TLG Credit Opportunities Fund (COF).
‘Swedfund’s mission is to reduce poverty through investing in sustainable businesses and we are therefore pleased to support TLG’s mission to empower entrepreneurs in Sub-Saharan Africa. Through COF, TLG helps necessary expansion capital reach small and medium-sized businesses. These companies play a key role in creating formal job opportunities and inclusive growth, which goes hand in hand with Swedfund’s mission. Further, TLG’s focus on tracking impact metrics such as gender equality in its portfolio companies, is very much aligned with Swedfund’s strategy,’ said Maria Håkansson, CEO, Swedfund.
According to the International Finance Corporation (IFC), four out of five new jobs in developing countries are created by SMEs and account for up to 33 percent of GDP. But in sub-Saharan Africa, SMEs often have limited opportunities to be granted traditional bank loans as banks tend to focus on larger corporates. The lack of access to finance restricts growth and the creation of more jobs.
‘The concept of the fund is simple: To plug the “missing middle” funding gap for sub-Saharan African SMEs. We are excited to have Swedfund on board as partners and we hope to strengthen the overall economic ecosystem in sub-Saharan Africa by also working with relevant authorities.’ said Zain Latif, CEO, TLG Capital.
TLG launched COF in 2016 to target the SME funding gap across sub-Saharan Africa. Since inception, the fund has provided tailored funding solutions to companies in healthcare, retail, telecom and FinTech. COF's investment strategy fits closely with Swedfund's business model based on three pillars – impact on society, sustainability and financial viability.
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Swedfund, owned by the Swedish state, provides risk capital, expertise and financial support for investments in local companies in the developing markets of Africa, Asia, Latin America and Eastern Europe. Our mission is poverty reduction through sustainable business, contributing to economic and environmental development as well as a positive impact to society. Swedfund's investment strategy rests on three main pillars: impact on society, sustainability and financial viability. Since 1979 Swedfund has been engaged as an active, responsible and long-term investor in more than 260 companies worldwide.