Verdant makes $2.5m investment to back SA fiber-focused SMEs
Verdant Capital has unveiled a revolving credit facility of $2.5 million for Enable Capital, a South African firm specializing in offering short-term funding solutions to SME subcontractors engaged in the physical construction and deployment of fiber network infrastructure across South Africa at local, regional, and national levels.
Enable's tailored funding solutions address the specific challenges faced by SME subcontractors, encompassing aspects like equipment hire, the supply of building materials, and diesel procurement. By engaging directly with suppliers and service providers in bulk, Enable Capital streamlines processes for the benefit of subcontractors.
This collaboration with Verdant Capital positions Enable to continue its support for SMEs involved in fiber deployment, contributing to economic growth in vital areas and communities. The focus extends beyond affluent regions, aiming to bridge the digital divide by facilitating the rollout of fiber network infrastructure in areas with unequal internet access, thereby enhancing internet accessibility for all.
Key Takeaways
Enable Capital represents one player in a pool of companies, both legacy and startups, looking to provide SME financing in Africa. Lack of access to working capital remains a huge problem facing the growing small and mid-sized retail sector in emerging and frontier markets, including Africa. Available data shows a $330 billion financing deficit for the small enterprises that make up 90% of businesses on the continent—and it’s a problem several startups and foreign investors are particularly keen to address as it promises attractive returns. More so, Africa’s telecommunications industry has witnessed rapid growth over the past two decades while playing a key role in shaping the continent’s economy. Much of this growth is driven by some deregulation of the sector, a large young population increasingly adopting mobile voice and data services, and investments in network infrastructure like Verdant's funding.
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