AFRICA – Sub-Saharan Africa-focused impact investor, Vital Capital has launched a new debt facility providing loans to companies to help them get through the COVID-19 pandemic while continuing to offer essential services.
The company, which typically takes equity stakes, has launched the Vital Impact Relief Facility, to offer businesses immediate access to capital in anticipation of a severe economic crisis that could result from the rapid spread of COVID-19 in the region.
These loans, which seek risk-adjusted returns, will help fundamentally sound African businesses providing impactful services to weather the economic consequences of the virus and put them in a position to thrive when the pandemic has ended.
“Because the coronavirus has already begun to impact a range of businesses in sub-Saharan Africa, there is an urgent need for the loans that many of these African companies will require to ride out this tumultuous period,” said Nimrod Gerber, managing partner at Vital Capital.
The Vital Impact Relief Facility will start with an initial US$10 million in capital and will issue roughly 10 loans on favourable terms of approximately US$1 million each with a duration of up to four years.
Vital also plans to open the facility to other investors to extend the available pool of capital.
“It’s a fast-developing situation that demands immediate action, so we are pleased to move forward with this debt facility and we encourage others to join us,” Nimrod added.
“The Vital Impact Relief Facility aims to give impactful enterprises the ability to continue offering their vital services through this crisis while building a bridge to realising their visions of becoming prosperous companies that can benefit millions of Africans.”