Debt Financing Emerges as Preferred Strategy for African Investments

Rosanne Whalley, managing partner of Nairobi-based AHL Venture Partners, has observed firsthand the mixed performance of Africa’s investment landscape over 17 years. Having experimented with various approaches—from early-stage equity to debt instruments—Whalley and her team have concluded that private credit offers the most compelling combination of financial returns and impact.

AHL Venture Partners was founded in 2007 by a European family seeking to support African entrepreneurs. For over a decade, the firm diversified its investments across various asset classes while building expertise in local markets. Around 2020, the family granted Whalley’s team autonomy to define their investment strategy—a rare privilege in African institutional investing.

The decision to prioritize debt financing stemmed from several factors: Debt recycles more quickly than equity, offering investors greater capital efficiency; returns tend to be more predictable with established businesses generating cash flows; and the liquidity profile allows for redeploying funds to support new ventures.

Whalley’s perspective extends beyond her firm’s strategy. She believes impact investing has often fallen short of expectations, that development finance institutions sometimes view private credit managers as competitors rather than partners, and that imposing sustainability requirements on early-stage companies can hinder their growth potential.

AHL Venture Partners has already invested in over 35 businesses across Africa and is currently raising a dedicated debt fund to expand its lending activities. Whalley’s experience suggests a growing recognition among investors that private credit may offer a more sustainable path toward both financial success and meaningful impact on the continent.