Inside TLG Capital’s 2026 investment plan for Africa’s SME market

TLG Capital is positioning for an aggressive expansion in 2026, targeting a $200 million raise to deepen lending to small and medium-sized enterprises (SMEs) across Africa, as private credit gains traction as a critical financing tool on the continent.

The London-based investment firm, which has completed 41 investments and 30 exits across 20 African countries since 2012, is doubling down on its strategy of providing structured credit to underserved businesses navigating volatile macroeconomic conditions.

Africa private credit expansion

Private credit is increasingly filling financing gaps left by banks across Africa, offering flexible capital solutions with predictable cash flows and downside protection. TLG is leveraging this model to support small and medium-sized enterprises across sectors including healthcare, agriculture, manufacturing, and financial services.

Fundraising and institutional backing

TLG’s flagship vehicle, the Africa Growth Impact Fund II, has reached a $75 million first close, backed by institutional investors including the International Finance Corporation, Norfund, Swedfund, and Bpifrance.

By March 2025, Norfund committed $10 million to the fund, reinforcing investor confidence in TLG’s structured credit approach. The firm’s partnership with FCMB Asset Management also led to the full deployment of the oversubscribed FCMB–TLG Private Debt Fund Series 1, highlighting growing appetite for private debt in Nigeria.

Performance and returns resilience

TLG has demonstrated resilience in navigating macroeconomic shocks. In March 2025, the firm exited a $12 million investment in a Nigerian consumer platform, delivering an approximate 18% return in U.S. dollar terms over six years.

The exit came despite significant macroeconomic pressures, including sharp currency depreciation and rising inflation, underscoring the durability of structured credit strategies in frontier markets. You may want to verify the exact depreciation figure from a primary economic source.

Sector expansion across Africa

TLG continues to expand its footprint across key African markets, In Kenya, it invested $6.5 million in Ark Group, an education provider, to expand infrastructure.

In Uganda, it extended a senior secured facility of up to $2 million to a healthcare distributor.

In Zambia, it backed SME lender Shona Capital with a $5 million facility to address a financing gap estimated at around $2 billion. This figure should be verified from official reports.

In Ghana, it structured a $10 million facility supporting the acquisition of an insurance platform.

Positioning for long-term growth

With Africa expected to drive a significant share of global population growth in the coming decades, demand for scalable financing solutions continues to rise. I recommend verifying the exact percentage from UN sources.

As TLG advances toward its $200 million fundraising target, the firm is betting on disciplined underwriting, institutional partnerships, and impact-driven investing to deliver returns while supporting economic development across Africa. Its growing footprint signals increasing investor confidence in Africa’s private credit market, even as macroeconomic risks persist.