TLG Capital Zambia closes $5m SME lending facility

TLG Capital structured the scaling facility for Shona Capital Zambia. The deal targets businesses too large for microfinance but too small for traditional banks. This segment faces a $2 billion financing gap across Zambia.

The facility releases funds in stages as Shona grows its loan book. TLG designed this structure to manage risk while supporting expansion. Additional guarantors and partners will join the arrangement as the business scales.

Funding comes from TLG’s Africa Growth Impact Fund II. The fund’s backers include IFC, Norfund, Swedfund, and Bpifrance. This marks TLG’s first investment in Zambian markets.

Speed Advantage in SME Lending

Shona Capital Zambia focuses on the $10,000 to $100,000 lending range. It serves established SMEs that lack the documentation needed for commercial bank loans. Traditional lenders often take weeks to process applications. Shona delivers funding decisions within five days.

This speed helps businesses capture time-sensitive opportunities. Zambian SMEs can now access credit when market conditions favour growth. The approach fills a clear market gap that has persisted for years.

Isha Doshi, who co-founded TLG Capital, highlighted the challenge in Zambia’s middle market. She described businesses that are “too established for microfinance, too informal for banks”. This positioning creates a distinct investment opportunity.

Cash Flow Assessment Model

Shona’s credit model prioritises cash flow analysis over traditional collateral requirements. The team assesses each business’s growth potential and revenue patterns. This approach builds fairer access to credit for Zambian entrepreneurs.

TLG Capital manages private credit across sub-Saharan Africa. The firm’s previous deals include successful deployments in Kenya and Uganda. Zambia represents natural expansion into another underbanked market.

The facility signals growing investor interest in Africa’s SME sector. Structured debt products like this one offer scalable impact with measurable returns. More funds may follow as Shona demonstrates its market approach and builds its loan portfolio.

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