Lendable Group (“Lendable”) has announced the final close of its Lendable MSME Fintech Credit Fund (“Fund”), which raised $110 million in investable capital, exceeding the $100 million target. The Fund is Lendable’s fourth private debt fund, providing on and off balance sheet debt to fintechs in Africa and Southeast Asia that support MSMEs and the digital business ecosystem.
The Fund is a hybrid finance instrument that successfully brings together top investors such as humanitarian organisations, development finance institutions, and commercial institutional capital. A significant European insurance business joined the existing roster of international investors, which included the United States International Development Finance Corporation (DFC), JICA, FMO, BIO, EMIIF, SIFEM, OeEB, USAID, and FSDAi, as part of the final close. The Fund is a five-year and nine-month closed-ended Luxembourg Reserved Alternative Investment Fund (RAIF), with the initial loss capital tranche provided by FSDAi and EMIIF.
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“DFC’s anchor investment of $20 million promotes financial inclusion by enabling Lendable to provide financial services for underserved businesses and communities across Africa and Asia, with a commitment to diversity and gender equity,” said Agnes Dasewicz, DFC’s Chief Operating Officer. “DFC’s support for Lendable helped the fund mobilize additional capital and ultimately raise $110 million in funding, illustrating the critical role of development finance institutions in catalyzing private sector investment toward development outcomes.”
With LMFCF, Lendable also expands its presence in Southeast Asia. “EMIIF, an Australian government investment mechanism, was designed to provide blended finance solutions so that more private capital can be mobilized towards impact investing strategies. We are excited to partner with Lendable and provide a first-loss investment to catalyse additional capital for fintechs in Southeast Asia”, said Ralitsa Rizvanolli, Director of Investments, EMIIF.
The Fund represents a watershed moment for impact funds in the financial inclusion arena, attracting a diverse variety of investors to the asset class, some of whom have never been involved in fintech transactions before. The Fund is an Article 9 Fund in accordance with the SFDR rules, with 100% of its investments made in socially beneficial and ESG-compliant fintechs.
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Lendable will put this money to work for fintechs in Africa and Southeast Asia. The Fund intends to make loans to over one million individuals and MSMEs, as well as over 300,000 women end borrowers, producing significant income for those who have been financially excluded. This funding will directly contribute to Lendable’s aim of decreasing inequities, promoting gender equality, and fostering economic growth.
Chris Wehbé, CEO of Lendable stated, “We are delighted to announce the final close of the Lendable MSME Fintech Fund. It has been a great pleasure to work with our development finance and commercial investors to design an innovative pool of capital that will drive real impact across emerging, frontier and pre-frontier markets.”
The Fund will evaluate live borrower data from its investee fintech CRMs using Lendable’s proprietary technology, Maestro, which provides an unprecedented degree of detail across the entire loan book. This amount of transparency, both on an individual loan and across the portfolio, improves credit underwriting and enables more effective and efficient risk management. This level of understanding also enables Lendable to monitor and verify effects, resulting in robust impact reporting.
The Fund is actively exploring investment opportunities as of January 30, 2023, and has already invested over $70 million with borrowers in Kenya, Uganda, South Africa, Egypt, Benin, Tanzania, Ghana, Bangladesh, the Philippines, Vietnam, Indonesia, and Thailand.
The Fund most recently invested in Finclusion Group, an African credit-led neobank. Other African startups the Fund had previously invested in include Planet42; OneFi; Trella; and Moove Africa.
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Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard