Proparco has made an equity investment in a fund investing in SMEs in Ghana and Nigeria.

Verod Capital Growth Fund III is a USD 200m capital development/transfer fund based in Lagos. It has been raised by the manager Verod Capital Management Limited. Building on its experience of the two previous funds (USD +120m invested), Verod is today continuing its strategy by mainly targeting two countries (Nigeria and Ghana). A pioneering player and leader in equity investment in Nigeria, Verod stands out for its local footprint, with an office in Lagos opened in 2008 and another in Accra, and a strategy to support SMEs, whereas many Nigerian managers target larger companies more.

The fund is planning over a dozen investments to finance the external growth and development of the productive assets of the target companies. Despite its generalist position, the fund will target industries facing domestic demand where its team’s experience will allow it to replicate its successes, such as in FMCG, education, health, agribusiness, financial institutions and insurance.  

Based on the 2 predecessor funds (VCG I and VCG II) and the project pipeline, positive impacts are expected in terms of economic and social development for the III fund:

• On the economic front, the fund should support access to financing for local SMEs, as 80% of the commitments of VCG III should target SMEs, a large proportion of which are located in rural areas. The companies invested in will also contribute to the tax revenues of Nigeria and Ghana.
• On the social front, the project should create or maintain over 1,200 direct and indirect jobs. 33% of these jobs should be held by women and, more generally, the project could have a positive impact in terms of gender via the support to women’s entrepreneurship and leadership. Support and training should be provided to employees of the underlying companies at the initiative of the fund.