Assisting an African private credit provider with the development of its five-year corporate strategy

Background and context

Norsad Capital “Norsad” is a well-established investment company that has been operating in the Southern African (SADC) region for over 30 years. Norsad offers medium to long-term risk capital to mid-market growth companies across SADC. The firm provides tailor-made debt solutions of between $US 5 million to $10 million to profitable businesses and commercially viable projects that deliver substantial impact. Over the past 30 years, Norsad has invested over US$700 million into more than 170 companies in 12 countries in the Southern Africa region.

Purpose of the engagement

Nova Economics was subcontracted by Emergent Africa to assist the SADC-focused private credit provider, Norsad Capital, with the development of their 5 to 10-year growth strategy. The broader objectives were to assist the Norsad executive to test and refine their existing corporate strategy by providing insight into recent trends in the market for private credit in Sub-Saharan Africa and by comparing the merits of different strategies for growth around geographic and product diversification.

Our approach

We followed an approach centred on market research and collaborative strategy workshops that sought to answer key questions. The process was as follows:

• Analysed the market for private capital across several African countries and identified the most promising geographies
• Identified, examined and profiled examples of leading impact investors and private credit providers active in Sub-Saharan Africa. We sought to understand industry trends; geographic, sector and impact focus areas; products and services; funding sources and structuring; and key success factors to extract lessons for Norsad.
• Ran a series of workshops to refine Norsad’s strategic goals, objectives and market positioning
• Interviewed around 20 individuals from companies in private credit and equity, impact investors on the African continent, and members of Norsad’s board.
• Identified and defined various strategic options for Norsad’s growth’s based on geographic and sector diversification.

Outcomes of the project

The 5 to 10-year growth strategy was developed and was approved by the Norsad board. The outcomes of its implementation will emerge in the medium- to long-term.