Africa is home to an increasing number of growth companies in need of capital. Before these businesses start tapping into sources of funding to expand operations, they must evaluate the type of finance that suits their particular needs.
There are a number of capital options for fundraisers, which include conventional debt from local banks, investment from Private Equity (PE) firms and soft loans from Development Finance Institutions (DFIs).
But the structural mismatch between the supply and demand for capital has been a recurring theme in the African investment ecosystem, despite the different channels for raising funds. In our view, this funding option gap has led to the emergence of private debt as a preferred investment type.
As the total value of available capital increases and the investment ecosystem deepens, access to credit will be critical to boosting the performance of African companies and the overall macroeconomic environment.
Find out how private debt is unlocking investment opportunities in Africa
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