The investment is aimed at improving access to credit for low-income public sector workers who are usually excluded from formal banking systems.

The three southern African countries continue to face serious economic challenges, including limited job opportunities, inadequate healthcare and education systems, and growing pressure from climate-related shocks. With international aid becoming less predictable, many households have struggled to sustain livelihoods or fund small-scale ventures.

Swedfund’s new funding seeks to close this gap by enabling more civil servants to access personal and business loans that support daily living and small enterprise growth. According to the organisation, these loans are not just about access to money but about fostering resilience and stimulating community-level economic development.

“With this loan we increase the possibilities for low-income individuals to secure financing that supports their livelihoods and productive activities, such as starting a small side business, expanding farming, covering education costs or building a house. This contributes to human development for many families and, in turn, fosters potential for local economic growth and more jobs,” said Jane Niedra, investment director of Financial Inclusion at Swedfund.

Select Africa’s customer base largely consists of civil servants, including teachers, nurses, and local administrators, who often find it difficult to obtain loans from traditional banks due to perceived high risk or lack of collateral. The company provides payroll-based lending, allowing borrowers to repay directly from their salaries, reducing default risk and enabling them to build a formal credit history over time.

Founded in 1999 with its first branch in Eswatini, Select Africa has since expanded its footprint across Lesotho, Malawi, Uganda, and Kenya. The Group now operates 19 branches and manages a gross loan book of about $108 million.

Through this partnership, Swedfund and Select Africa aim to unlock opportunities for thousands of underserved public workers, strengthening household incomes, encouraging entrepreneurship, and supporting the broader financial inclusion agenda in sub-Saharan Africa.

Through the investment, Swedfund aims to support the preservation and creation of decent jobs in small and medium-sized companies that otherwise struggle to find financing.

Small and medium-sized companies (SMEs) in Africa often struggle to access debt capital structured to fit their needs. This is particularly dire for the viable but temporarily distressed SMEs inhabiting commercial bank portfolios. 

Through the investment in TLG II, Swedfund bridges this gap by supporting a scalable credit solution that enables the growth of local companies, enhancing protection of at-risk jobs and sustainable creation of new ones.

“SMEs employ 80 percent of the African workforce, and nine out of ten new jobs on the continent are created by growing companies. 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. Through this investment we help achieving that, generating long-term impact,” says Jakob Larsson, senior investment manager, Swedfund.

TLG II has a for the African market innovative structure and combines flexible, long-term debt to SMEs with equity participation and guarantees issued by local banks.

This allows TLG to offer loans with tenors and interest rates that allow viable but struggling SMEs to unlock sustainable recovery and grow their businesses sustainably.

The investment is done alongside Norfund, the IFC and BPI France and sums up to a total of $75 million. Swedfund has an existing relationship with TLG through its investment in TLG Credit Opportunities Fund in 2018.