MICROCAPITAL BRIEF: Tugende Raises $17m in Debt from Symbiotics, Goldfinch, Nordic Microfinance Initiative, Lendahand to Expand Vehicle, Equipment Financing for MSMEs in Kenya, Uganda

Tugende, a financial technology (fintech) firm specializing in vehicle finance in Uganda and Kenya, recently raised USD 17 million in debt funding. The firm plans to use USD 12 million of the fresh cash to support growth in Uganda and the remainder to scale up in Kenya.

While Switzerland-based impact investing firm Symbiotics is increasing its exposure to Tugende by USD 6 million, the other investors are new to the firm: (1) US-based Goldfinch, a lending platform facilitating USD 5 million for Tugende; (2) the Nordic Microfinance Initiative (NMI), a Norway-based public-private partnership investing local-currency worth USD 5 million; and (3) Netherlands-based Lendahand, which raised USD 1 million for Tugende via its crowdfunding platform.

Tugende offers a “lease-to-own” product for motorbike taxi drivers with medical and life insurance and support for acquiring driving permits and safety equipment. Tugende also has begun offering asset financing to small and medium-sized enterprises (SMEs) for vehicles, boat engines and equipment for retail shops. 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 operates four branches as of 2022. The company had served approximately 47,000 customers as of 2021.

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

Goldfinch, a crypto-based lending platform founded in December 2020, “decentralizes” lending to allow individuals to participate in crypto-lending. As of 2021, the firm reports having reached 200,000 borrowers, including in India, Mexico, Nigeria and Southeast Asia.

NMI was founded in 2008 with the goal of creating jobs and wealth via financial inclusion. The organization reports financial returns of approximately 4 percent per year via five funds holding aggregate assets of USD 370 million. These funds have 19 active investments in equity and debt plus seven in third-party funds. The 19 direct investments are in institutions serving 10 million clients, of whom 80 percent live in rural areas and 95 percent are women. NMI is one-third owned by: (1) Norfund, which is backed by the government of Norway; (2) the Danish Investment Fund for Developing Countries, which is 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 finance for SMEs. Through its platform, users have mobilized EUR 100 million (USD 113 million) to fund 2,900 projects.

By Zachary DeLuca, Research Associate

Sources and Additional Resources

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

Symbiotics homepage
https://symbioticsgroup.com/

Goldfinch homepage
https://goldfinch.finance/

NMI homepage
https://www.nmimicro.no/

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

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

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

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