Verdant Capital, a Mauritius-based corporate finance firm, recently issued subordinated debt in the amount of USD 7 million to Watu Credit Uganda, an affiliate of Kenya’s Watu Credit, which funds vehicles and mobile phones in six African countries. While Watu also funds smartphones, tuk tuks (three-wheelers) and cars, the investment from Verdant specifically targets the financing of boda bodas (motorbike taxis) in Uganda.
As of June 2021, Watu Uganda reported 12-month profits of UGX 5.8 billion (USD 1.5 million) on UGX 59 billion (USD 15 million) in total assets. Among the firm’s funders is Mintos, a peer-to-peer platform based in Latvia. Watu Uganda was founded in 2019.
Founded in 2015, Watu is a financial technology (fintech) company that mainly finances two- and three-wheeled vehicles in Kenya, Nigeria, Rwanda, Sierra Leone, Tanzania and Uganda. Its products include: (1) 12-month loans for mobile phones; (2) car loans with 20-percent downpayments and terms of six months to five years; and (3) loans for tuk tuks and boda bodas with terms of up to two years and downpayments starting at KES 20,000 (USD 170). All of the firm’s vehicle loans are bundled with insurance.
The loan from the Verdant Capital Hybrid Fund is the fund’s first disbursement. The fund has a volume of USD 80 million that it invests in inclusive finance institutions. These investments take the form of subordinated debt and “hybrid” capital – that which serves as an “intermediate capital tier that can be leveraged by local and international senior debt investors.” The deal with Watu also includes support from the Hybrid Fund’s technical assistance team.
Verdant Capital, a corporate finance firm operating from offices in Ghana, Mauritius and South Africa, provides capital raising as well as merger and acquisition advisory services to clients across Africa. These clients span the agri-business, renewable energy, business services, financial services and manufacturing industries.
By Nithin Naren, Research Associate
Sources and Additional Resources
Verdant press release
https://verdant-cap.com/verdant-capital-hybrid-fund-completes-its-first-investment-in-watu-credit-uganda-limited/
Watu description
https://watuafrica.com/about-watu/
Watu Uganda financial statements, hosted by Mintos
https://assets.mintos.com/84E48B11-8FBC-9005-808A-F18970C48C53.pdf
Previous MicroCapital article on Verdant
https://www.microcapital.org/microcapital-brief-verdant-capital-arranges-3m-revolving-credit-facility-for-zambias-pan-african-building-society-pabs/
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