The International Finance Corporation (IFC) and TLG Capital have announced the first close of the TLG Africa Growth Impact Fund II (AGIF II), securing $75 million to provide financial support to distressed but viable small and medium-sized enterprises (SMEs) across Africa.
The fund aims to assist up to 20 SMEs facing loan stress, offering flexible local capital to help them withstand economic shocks and continue operations.
Anchored by IFC’s Distressed Asset Recovery Program (DARP) with a commitment of up to $20 million, AGIF II also receives backing from Swedfund International, Norfund, Bpifrance, and the UK’s Foreign, Commonwealth and Development Office (FCDO) through its Manufacturing Africa program.
“Today, one in four SME loans in Africa is under stress,” said Isha Doshi, Co-Founder of TLG Capital. “And yet, the entrepreneurial spirit is unshaken. AGIF II is our answer to that call for partnership. It’s about capital that understands context financing that’s flexible, strategic, and backed by advisory horsepower from McKinsey, BDO, ESS, and Ndarama Works. TLG AGIF II brings together both capital and capacity building.”
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Aliou Maiga, IFC’s Financial Institutions Group (FIG) Director for Africa, emphasized the fund’s role in mobilizing private sector funding to support financially stressed yet viable SMEs.
“The fund will support local businesses that provide job opportunities and vital goods and services, contributing to the inclusive growth of the communities where these companies operate,” he said.
The fund targets key sectors including manufacturing, healthcare, agriculture, and telecommunications. In Nigeria, for instance, Terra Aqua, an aluminum recycling company in Ogun State, is set to receive $7.5 million in debt financing, contingent upon meeting environmental, social, and governance (ESG) benchmarks. This investment is expected to create 200 direct and 752 indirect jobs.
Jakob Larsson, Senior Investment Manager at Swedfund, highlighted the importance of SMEs in Africa’s economy, noting that they employ 80 percent of the workforce and generate nine out of ten new jobs on the continent.
“To protect existing jobs and to create new ones is crucial for poverty reduction. For African SMEs to survive and grow, it is important that there is a functioning market with the right, fit-for-purpose financial services addressing diverse local challenges,” he said.
UK Deputy High Commissioner in Lagos, Jonny Baxter, added, “A strong manufacturing sector is key to driving economic growth and industrialization in Nigeria and across Africa. By supporting TLG Capital, we’re fostering greater capital flows into Nigeria, which in turn supports job creation, generates wealth, and secures a prosperous future.”
