Kenya’s FinTech Lendable secures funding from Dutch Development Bank
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Lendable, the first debt platform designed specifically for African alternative lenders – non-banking, asset backed finance providers operating in microfinance, and a range of Pay-as-you-go (PayGo) services – has continued to attract investors with the entry of Dutch funders.
The Kenyan firm has received a USD 4.5 Million convertible grant from Dutch funder, FMO. The convertible grant is being provided by the Dutch government’s MASSIF fund, managed by FMO.
It aims to reach targeted end-beneficiaries through financing local financial intermediaries and institutions that can contribute to their development. This will fund loans from Lendable’s alternative lender clients across Africa – to small and micro enterprises, and low-income consumer borrowers.
Lendable was founded in 2014 and currently provides structured finance facilities to seven fast-growing alternative lenders across African markets, including off-grid energy companies, small and medium-sized enterprise (SME) lenders and asset finance companies.
The company has been a leading light in providing loans to organisations that offer unstructured loans, mainly in the energy pay as you go sector.
FMO’s grant will contribute to financial inclusion in Africa by catalysing innovative, technology-driven business models. Alternative lenders in Africa are using Internet of Things (IOT) and mobile technologies to unlock new financial services and improve access to income-generating assets for low-income homes.
Daniel Goldfarb, CEO of Lendable, said: “By working with FMO we can scale-up the volume of capital reaching SMEs and consumers in our markets as well as to support our partners in implementing the Responsible Finance Guidelines. As we scale, finding parties like FMO that are willing to invest alongside Lendable to de-risk commercial investment is key to our success.”
Lendable’s ‘Maestro’ technology platform allows for direct data integration with these alternative lenders, including loan portfolio data analysis and cash flow predictions. Maestro also provides high quality portfolio management information to alternative lenders and investors in Lendable’s SPVs (Special Purpose Vehicles). This is increasingly popular with investors who have traditionally struggled to get detailed price, risk and portfolio quality metrics from impact-focused lenders.
Martin Steindl, FMO’s manager for the convertible grant programme under MASSIF, said: “The ability to harness cutting-edge technology is key to unlocking alternative lending channels in African markets and reducing the financial exclusion of smaller enterprises, which is exactly what Lendable’s proprietary platform and securitization capabilities offer.”
With a leading impact investor, FMO supports sustainable private-sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO focuses on three sectors that have high development impact: financial institutions, energy, agribusiness, food and water. With a committed portfolio of EUR 9.2 billion spanning over 82 countries, FMO is one of the larger bilateral private-sector developments banks globally.
Source: African Strategic-Ventures (ASV) & The Exchange.