Emerging and Growth Markets | December 15, 2022

TLG Capital partners with two investors in Africa to lend to startups and growing businesses

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, December 15 – There’s a $330 billion financing gap for small and mid-sized businesses in Africa. TLG Capital is teaming up with growth-stage lender Norsad Capital in Botswana to provide capital to small and mid-sized businesses. Together the firms have $400 million in assets under management.

Norsad, an impact investor, has been providing loans of $500,000 to $10 million to Southern African businesses in hospitality, energy, retail and financial services for the past 30 years. Its portfolio includes the Eswatini Development Finance Corporation, a hydroelectric project in Zimbabwe, and a hotel in Malawi’s second largest city, Blantyre.

Venture debt

TLG also is partnering with Lagos-based Future Africa on a $25 million venture debt fund for Future Africa’s portfolio companies. Venture debt is scarce in many emerging markets, leaving companies reliant on expensive equity capital to cover working capital, property rentals or inventory financing costs.

The market environment is making equity harder to find, notes Future Africa’s Iyinoluwa Aboyeji, “plus the terms are most likely not going to be friendly.”

Future Africa launched six years ago and has backed more than 90 African startups.