ALCB Fund Invests US$3 Million in UsPlus Social Bond

Brock Hoback, ALCB Fund Lead

The African Local Currency Bond Fund (ALCB Fund) deployed USD 3 million (ZAR 50 million) into a 4-year senior unsecured social bond issued by South African alternative lender UsPlus Limited.

This marks ALCB’s second commitment, following a ZAR 40 million allocation in 2024, further tapping UsPlus’s ZAR 1 billion Note Programme.

The JSE-listed issuance explicitly finances invoice discounting and purchase-order facilities for Black-owned, women-owned, and youth-owned MSMEs.

What is the ALCB Fund investing in UsPlus?

The African Local Currency Bond Fund (ALCB Fund) has invested a further USD 3 million (ZAR 50 million) in a 4-year senior unsecured social bond issued by UsPlus Limited, a South African fintech-enabled provider of working-capital finance for micro, small and medium-sized enterprises (MSMEs).

The notes were issued under UsPlus' ZAR 1 billion Note Programme and listed on the Sustainability segment of the Interest Rate Market of the Johannesburg Stock Exchange (JSE).

The investment marks the second time the ALCB Fund has invested in UsPlus, following its initial ZAR 40 million (USD 2.2 million) commitment in 2024. That first investment supported UsPlus in accessing the public bond market as a debut thematic issuer.

UsPlus bond at a glance

Detail	Transaction
Issuer	UsPlus Limited
Investor	African Local Currency Bond Fund
Investment	ZAR 50 million (USD 3 million)
Bond maturity	4 years
Bond type	Senior unsecured social bond
Note programme	ZAR 1 billion
Listing	JSE Sustainability segment
Market	South Africa
Previous ALCB Fund investment	ZAR 40 million (USD 2.2 million) in 2024
Interest-rate benchmark	ZARONIA
Use of proceeds	Eligible social projects

Why is the UsPlus bond significant for South Africa's debt markets?

The transaction also represents an important development for South Africa's thematic debt market.

The UsPlus issuance is among the earlier corporate social bond transactions to reference ZARONIA, the South African interest-rate benchmark that is replacing JIBAR.

The use of ZARONIA also connects the transaction to South Africa's transition toward its newer domestic interest-rate benchmark, while the social-bond structure channels institutional capital toward financing for MSMEs.

For the ALCB Fund, the transaction demonstrates its role as an anchor investor in local-currency debt markets. By providing long-term local-currency capital, the fund seeks to help African issuers reduce exposure to foreign-exchange risk while strengthening domestic capital markets.

How will UsPlus use the social bond proceeds?

The proceeds will be allocated exclusively to eligible social projects under the UsPlus Social Bond Framework.

The framework received independent third-party verification from IBIS ESG Consulting Africa, providing an external assessment of the framework underpinning the use of proceeds.

UsPlus provides working-capital finance through several products designed to help businesses access cash tied up in payment cycles, including:

• Invoice discounting

• Factoring

• Purchase-order financing

• Financing linked to transferable instruments such as invoices, purchase orders and contracts

Through its Social Bond Framework, UsPlus targets financing for Black-owned, women-owned and youth-owned MSMEs, as well as qualifying enterprises operating in priority provinces and selected high-impact sectors.

How does UsPlus support MSMEs?

UsPlus focuses on a financing challenge faced by businesses that may have to wait for customers to settle invoices or fulfil payment obligations.

Its working-capital solutions allow eligible businesses to unlock liquidity tied up in payment cycles. The company says the new bond financing will enable it to extend this support to more businesses across South Africa.

According to UsPlus Founder and CEO Leonidas Kirkinis, the financing will help businesses manage cash-flow constraints, fulfil contracts, and sustain or grow employment.

The transaction therefore links institutional bond-market capital with working-capital financing for MSMEs, while the social-bond framework directs the proceeds toward defined social-impact categories.

What does the second ALCB Fund investment mean for UsPlus?

The ZAR 50 million follow-on investment is larger than the ALCB Fund's initial ZAR 40 million investment in 2024.

The ALCB Fund described the follow-on transaction as evidence of the potential for anchor investment to support a durable local-currency funding platform.

Brock Hoback, Fund Lead at the ALCB Fund, said the investment would help UsPlus broaden working-capital access for MSMEs while supporting employment, inclusion and the development of South Africa's thematic bond market.

Kirkinis said the increased support reinforces UsPlus's strategy of using the debt capital markets to expand finance for MSMEs and described the issuance as an example of how social bonds can connect institutional capital with economic inclusion.

Who are the key entities behind the transaction?

The transaction brings together an African local-currency investment vehicle, a South African fintech-enabled finance provider and a specialist emerging-markets investment manager.

African Local Currency Bond Fund: Established in 2012 by KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the ALCB Fund invests in African local-currency bond issuances. It acts as an anchor investor for financial institutions, corporates and impact-driven enterprises seeking long-term local-currency financing. The fund is managed by Cygnum Capital.

UsPlus Limited: Founded in South Africa, UsPlus provides working-capital finance to MSMEs through the purchase and financing of transferable instruments, including invoices, purchase orders and contracts. Its social-finance strategy focuses on expanding working-capital access among targeted MSME groups.

Cygnum Capital: Established in 2008, Cygnum Capital is a specialist investment bank and asset manager focused on frontier and emerging markets. It manages the ALCB Fund and provides financial solutions across its target markets.

What does the UsPlus transaction mean for local-currency financing?

The transaction illustrates how local-currency bond markets can connect institutional capital with SME and MSME financing needs.

For UsPlus, the ZAR 50 million investment provides additional funding capacity through a public debt-market instrument. For the ALCB Fund, the transaction represents a second investment in the same issuer following its ZAR 40 million commitment in 2024.

The combination of a ZAR 1 billion Note Programme, a 4-year bond maturity, a social use-of-proceeds framework and a JSE listing places the transaction within South Africa's developing thematic and local-currency debt-market ecosystem.

As UsPlus expands its working-capital financing, the transaction also demonstrates how social bonds can be structured around the financing needs of MSMEs while giving institutional investors access to defined social-impact assets.