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FSD Africa Investments commits $4.5 million to a new fund supporting MSMEs through pandemic recovery

Dec 17, 2020
FSD Africa Investments commits $4.5 million to a new fund supporting MSMEs through pandemic recovery

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FSD Africa Investments (FSDAi), the investment arm of FSD Africa, has announced a $4.5million commitment to Funds set up by Lendable Inc. (Lendable). This will boost the capacity of alternative financial service providers in sub-Saharan Africa to provide credit to micro, small and medium enterprises (MSMEs) recovering from the effects of the pandemic.

Lendable is a fintech startup which provides structured finance to alternative lenders in frontier and emerging markets. By providing funds to support the lending capacity of alternative financial service providers, these providers will, in turn, provide much-needed capital to MSMEs. This is at a time when MSMEs need help in fuelling their recovery from the effects of the pandemic – and when credit from other sources may be difficult to raise.

FSDAi’s investment will strengthen two new funds set up by Lendable to lend to MSMEs. The first will provide capital of at least $31 million to eight financial service providers lending to MSMEs across sub-Saharan Africa. The second aims to provide $100 million in support to fintech companies lending to MSMEs in Africa and other emerging markets. FSDAi’s initial $4.5 million investment into the larger fund in the first quarter of 2021.

“The adverse economic effects brought on by COVID-19 have hit micro, small and mediumsized enterprises particularly hard. Our support to the Lendable funds will meet two pivotal goals of providing small and medium businesses easier access to much-needed capital while accelerating broader financial inclusion on the continent,” said Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments.

FSDAi and Lendable also expect the funds to highlight sub-Saharan Africa as a viable investment destination for global commercial investors. The funds have the potential to channel even more capital to the continent, further expanding credit markets and access to financial services.

Original source: FSD