The Netherlands Development Finance Company, a public-private bank also known by its Dutch acronym FMO, recently agreed to extend a convertible grant of USD 450,000 to Lendable, a Kenyan firm that offers financing and analytics services to organizations such as leasing companies; pay-as-you-go energy service providers; and lenders to micro-, small and medium-sized enterprises. Convertible grants allow investors the option to acquire equity in investees in the future at no further cost. Lendable is committing the funds to cover losses that it may incur such that other investors can be more confident in supporting the firm. Based on this mechanism, Lendable is looking to attract USD 4.5 million in additional investment.
FMO disbursed the convertible grant from a fund it manages for the Dutch government, the Micro and Small Enterprise Fund, which is also known by its Dutch acronym MASSIF. Martin Steindl, manager of the MASSIF convertible grant program, stated, “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.”
Founded in 2014 and based in the city of Nairobi, Lendable is a financial technology (fintech) platform offering African lenders structured financing and an analytics package that integrates loan portfolio, cash flow and risk data, for the client as well as the client’s investors.
FMO, which was established in the Netherlands in 1970, is 51-percent owned by the Dutch government. The bank’s vision is to help abolish extreme poverty, increase equality and support measures that reduce climate change. For 2017, FMO reports pre-tax earnings of EUR 292 million (USD 350 million) from operations in approximately 70 countries. As of the end of that year, the organization had total assets of EUR 8.3 billion (USD 10 billion) including EUR 3.3 billion (USD 4 billion) in investments outstanding to financial institutions.
By Erik McDonald, Research Associate
Sources and Additional Resources
FMO Press Release
https://www.fmo.nl/news-detail/ff9105b2-b99c-48d7-b84a-029390733ba1/fmo-grant-boosts-african-fin-tech-lendable
Lendable
http://lendablemarketplace.com/
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