MICROCAPITAL BRIEF: Tugende raises $ 17 million in debt from Symbiotics, Goldfinch, Nordic Microfinance Initiative, Lendahand to expand vehicle and equipment financing for MSMEs in Kenya, Uganda

Tugende, a financial technology (fintech) company specializing in vehicle finance in Uganda and Kenya, recently raised $ 17 million in debt financing. The company plans to use $ 12 million in fresh cash to support the growth of Uganda and the rest to be extended to Kenya.

As Switzerland-based impact investing firm Symbiotics increases its exposure to Tugende by $ 6 million, other investors are new to the business: (1) Goldfinch, a US-based lending platform, facilitating 5 million USD for Tugende; (2) the Nordic Microfinance Initiative (NMI), a public-private partnership based in Norway that invests in local currency to a value of USD 5 million; and (3) Lendahand, based in the Netherlands, which raised USD 1 million for Tugende through its crowdfunding platform.

Tugende offers a “leasing-to-own” product for motorcycle taxi drivers with medical and life insurance and assistance in obtaining driver’s licenses and safety equipment. Tugende has also started offering asset finance to small and medium-sized enterprises (SMEs) for vehicles, boat engines and equipment for retail stores. Tugende, whose name can be translated as ‘Let’s Go’, has opened 17 branches in Uganda since its launch in 2012. In 2019, it expanded to Kenya, where it opened its first branch in the city of Kisumu. In January 2022, Tugende opened four branches in Kenya. The company had served approximately 47,000 customers by 2021.

Founded in 2004, Symbiotics provides for-profit investment and business intermediary services to investors and development practitioners of micro, small and medium enterprises as well as lenders to low and middle income households. In 2020, the company reported a direct investment portfolio of $ 2.3 billion invested in 80 countries.

Goldfinch, a crypto-based lending platform founded in December 2020, is “decentralizing” lending to allow individuals to participate in crypto lending. In 2021, the company claims to have reached 200,000 borrowers, notably in India, Mexico, Nigeria and Southeast Asia.

NMI was founded in 2008 with the aim of creating jobs and wealth through financial inclusion. The organization reports financial returns of around 4% per year through five funds with total assets of $ 370 million. These funds have 19 active investments in stocks and debt plus seven in third-party funds. The 19 direct investments are in institutions serving 10 million clients, 80 percent of whom live in rural areas and 95 percent are women. NMI is third-party owned by: (1) Norfund, which is supported by the Government of Norway; (2) the Danish Investment Fund for Developing Countries, known by its Danish acronym IFU; and (3) a group of five private companies.

Lendahand is a crowdfunding platform aimed at fighting poverty in emerging markets by facilitating the financing of SMEs. Thanks to its platform, users mobilized 100 million euros (113 million dollars) to finance 2,900 projects.

By Zachary DeLuca, Research Associate

Additional sources and resources

Tugende press release
https://gotugende.com/ending-2021-strong-tugende-closes-17m-in-additional-debt-investment/

Symbiotics Home Page
https://symbioticsgroup.com/

Home page Goldfinch
https://goldfinch.finance/

INM home page
https://www.nmimicro.no/

Lendahand homepage
https://www.lendahand.com/

Previous article from MicroCapital on NMI
https://www.microcapital.org/microcapital-brief-nordic-microfinance-initiative-adar-poonawalla-rajiv-dadlani-group-boost-equity-stakes-in-svasti-of-india/

Previous article from MicroCapital on Symbiotics
https://www.microcapital.org/microcapital-brief-acba-symbiotics-partnering-on-6-7m-bond-issue-for-msmes-green-lending-in-armenia/

Did you know that MicroCapital publishes the MicroCapital Monitor journal every month? To learn more, visit https://www.microcapital.org/products-page/.

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John A. Bogar