Swedfund Restates Long-term Support for African Microfinance Expert through Additional Loan
Platcorp Holdings Limited, a financial services company based in East and Southern Africa, is making a significant impact on the region's economy by providing microfinance services to micro, small, and medium enterprises (MSMEs). With a focus on underbanked or underserved businesses, particularly women-owned enterprises, smallholder farmers, and those engaged in climate-resilient agriculture, Platcorp is helping to bridge the financing gap that many small entrepreneurs face.
The latest investment of $10 million from Swedfund, a development finance institution from Sweden, is the fourth such loan to Platcorp. This investment is backed by a 50% guarantee from the European Union's European Fund for Sustainable Development Plus (EFSD+), further amplifying its impact.
Platcorp's microfinance services have several key impacts. They help to financially include a largely credit-excluded population, with 80% of African SMEs lacking formal credit access[1]. By providing small loans, Platcorp enables economic growth through MSMEs, supporting trade, retail, agriculture, affordable housing, and education financing[1].
The company places a special emphasis on advancing women-owned enterprises, expanding their opportunities and economic empowerment[1][2]. In addition, Platcorp supports climate-smart agriculture, though agricultural loans represent about 10% of Platcorp’s portfolio due to the sector's high risk[1].
Platcorp's focus on micro enterprises extends to agriculture, with an average loan size of $320. This reflects a commitment to very small businesses, including informal traders and rural micro enterprises at the "bottom of the pyramid" in economic development[1][2][3].
The company also provides technical assistance to borrowers, including employing agronomists and providing on-the-ground advice to farmers[1]. This is particularly important for agricultural loans, where training is mandatory and individuals are onboarded while being trained[2].
In Kenya, a significant portion of dairy production is aggregated through cooperative systems. Platcorp's dairy production model allows individual farmers with five cows or less to use their cattle as collateral to upscale their business and expand into seasonal crops[1].
Platcorp's agriculture portfolio has grown significantly, financing over 37,000 agricultural clients in 2024[1]. The investment aims to help close the financing gap in East and Southern African countries, where small businesses often lack access to formal credit.
In summary, Platcorp Holdings Limited leverages microfinance to address the severe financing gap faced by small entrepreneurs and vulnerable groups in East and Southern Africa, catalyzed through sustained financial backing from development institutions like Swedfund. This, in turn, advances inclusive and sustainable economic development in the region.
- Platcorp Holdings Limited's recent $10 million investment in energy transition projects could be facilitated by blended finance, combining traditional finance with concessional capital to make renewable energy solutions more affordable.
- To further support affordable housing development in East and Southern Africa, financial inclusion efforts could extend to real estate industries, making housing loans accessible to more people.
- Development finance institutions might consider partnering with Platcorp Holdings Limited in a blended finance approach, providing investment for infrastructure development projects that align with their sustainable development goals.
- With the growing impact of climate change, Platcorp Holdings Limited's focus on climate-resilient agriculture could drive innovation in sustainable agricultural practices, making their business model attractive for investors seeking financial returns with a positive environmental impact.
