Medium-sized businesses seeking new capital to steer operations through the coronavirus scourge can now access cash from impact investor Vital Capital's Sh1 billion Kenyan debt facility.
Vital Capital managing partner Nimrod Gerber said it would provide 10 loans worth Sh100 million each to promising Kenyan companies operating in the agro-industry and processing, education, healthcare and sustainable infrastructure.
"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 companies will require to ride out this tumultuous period," he said.
He said the loans are to be repaid within the next four years and urged more investors from across the world to join the pool to help companies remain afloat during and after the pandemic
"It is a fast-developing situation that demands immediate action and we encourage other investors to join us. The Vital Impact Relief Facility aims to give impactful enterprises the ability to continue offering vital services through this crisis while building a bridge to realising their visions of becoming prosperous companies that can benefit millions of Africans," he added.
The firm said Kenya and Uganda are its initial targets with Ghana, Democratic Republic of Congo, Côte d'Ivoire, Angola and Senegal planned in the next phase of expansion.
The firm, which typically takes equity stakes in upcoming enterprises, said the loans which seek risk-adjusted returns, will help fundamentally sound African businesses weather the economic consequences of the virus and put them in a position to thrive when the pandemic ends.
The firm, which has hired Guido Boysen formerly serving as chief executive of SME lender Grofin, said he will utilise his vast experience in creating and managing targeted debt facilities in Africa to co-lead the new business.
Vital Capital that owns a stake in a steam-power generating firm working at Menengai wells in Nakuru County, has been making targeted investments in sub-Saharan Africa since 2011.