Verdant Capital Hybrid Fund

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The Verdant Capital Hybrid Fund (VCHF) aims to provide hybrid capital to (micro) financial institutions, smaller banks, fintech, leasing and factoring companies in Africa. Due to the COVID-19 pandemic, the equity of financial institutions in Africa has declined, limiting their ability to lend to micro, small and medium-sized enterprises (MSMEs). The aim of the VCHF is to improve access to tailor-made financial products for African MSMEs by providing financial institutions with equity-enhancing instruments. This is intended to promote the systemic development of the MSME financial sector in Africa and indirectly contribute to poverty alleviation. The fund, in which various investors, including private ones, are to participate, was launched in Germany. In addition, the fund is accompanied by a Technical Assistance Facility (TAF), which is tasked with advising and supporting the supported financial institutions. These funds will be used to support financial institutions in areas such as product development, improving environmental and social management systems and introducing responsible finance standards.