IFC and TLG Capital have announced the first close of a new private credit fund, TLG Africa Growth Impact Fund II (AGIF II), with $75m raised.

IFC, through its Distressed Asset Recovery Program (DARP), is anchoring the AGIF II Fund with a commitment of up to $20m, which is also backed by Swedfund, Norfund, Bpifrance, and the UK Foreign, Commonwealth & Development Office (FCDO) through its Manufacturing Africa program.

The fund will provide financing in partnership with African banks to support up to 20 SMEs that face stress with their existing loan options.

This financing offers them a local capital lifeline to weather macro shocks or other challenges they are facing, helping them emerge stronger.  

The fund is partnering with banks in many African countries and will support businesses across vital sectors, including manufacturing, healthcare, agriculture, and telecoms.

“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.”

“This initiative incorporates a strong mobilization component that aims to leverage private sector funding to enhance the growth of financially stressed but sustainable SMEs,” said Aliou Maiga, IFC’s Financial Institutions Group (FIG) Director for Africa.

“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.”

The fund targets the UN’s least developed countries, promoting gender equality, local ownership, sustainable industrialization and decent work—aiming to demonstrate that strong development outcomes and strong returns can go hand in hand.

UK Deputy High Commissioner in Lagos, Jonny Baxter, said: “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. TLG Capital is one of the key partners we are working with to improve foreign direct investments that support manufacturing in Nigeria, which will have a lasting positive impact on both our economies.”

IFC's DARP focuses on the acquisition and resolution of distressed assets, the refinancing and roll-over risk of viable entities, and the restructuring of SMEs.

Since it was established in 2007, DARP has committed $9.2bn globally, including the mobilization of $6bn.

This has enabled banks to offload over $46bn of non-performing loans, while helping over 21 million debtors resolve their obligations.