Lendable to launch USD100m emerging markets fintech fund with impact and DFI investors

Spread the love

Lendable to launch USD100m emerging markets fintech fund with impact and DFI investors

Lendable, an emerging market fintech credit provider, is targeting a ground-breaking USD100 million closed-ended fund focused on emerging and frontier market fintech investments. 

Launched in Nairobi in 2015 by Daniel Goldfarb and Dylan Fried, Lendable’s goal is to get 100 million people access to crucial financial services. This will unlock consistent access to food, clean water, electricity, shelter, education and income.

Today, there are approximately 1.7 billion without access to financial markets. 

The Lendable MSME Fintech Credit Fund (the Fund) is designed to unlock access to financial services for over 150,000 Micro, Small and Medium Enterprises (MSME’s), providing investors with high impact exposure to important markets and the potential of high uncorrelated returns. 

This Fund provides credit to African and Asian fintech companies, who in turn offer fair credit facilities to MSMEs. These same MSMEs are the engines of wealth creation, financial inclusion, and economic growth in these regions, yet historically have had limited access to fair credit and financial services. 

Backed by leading impact and development financial institution (DFI) investors, the Fund today has soft closed a USD49 million investment from DFC, EMIIF (DFAT), Calvert Impact Capital, Ceniarth, BIO, FMO and FSD Africa (FSDAi). Another USD20 million is on track to close in the fourth quarter and the fund is expected to hard close above USD100 million in 2022. This is a five-year blended finance closed-ended Luxembourg Reserved Alternative Investment Fund (RAIF), with FSDAi and EMIIF providing the first loss capital tranche.  

Combining West Coast technology with Emerging Market needs, Lendable’s proprietary Risk Engine analyses live borrower data from its investee fintech CRMs, opening-up an unparalleled level of granularity across the entire loan book. It is this level of transparency, both on an individual loan and portfolio basis, that enhances loan underwriting and allows for more effective and efficient risk management.  This technology has already proven its predictive power, by accurately forecasting the impact of adverse weather, election unrest, Covid-19 lockdowns, and other local events.

The Lendable MSME Fintech Credit Fund is Lendable’s fourth fund and with the soft close takes the Firm’s overall committed capital to over USD200 million. Since inception (October 2016) to 31 August 2021, Lendable has delivered an annualised net return of 14.32 per cent to investors.

“We have had an amazing response to this Fund and have brought on board an impressive slate of leading impact investors and DFIs who back our approach,” says Daniel Goldfarb, co-Founder of Lendable. “Through our fintech investments, we are providing essential working capital for MSMEs that enables off-grid customers to buy energy products and opens the door to innovative digital banking services to consumers. It is about making a high impact difference.” 

Chris Wéhbe, CEO of Lendable adds, “We are incredibly proud of our track record in delivering genuine impact and consistent high returns. With our additional fund raising we can grow our committed capital, which will allow us to expand our reach into new markets, where we have a targeted pipeline of investment opportunities.”
Marnix Monsfort, Director Financial Institutions, FMO, adds: “Emerging market fintech investment has a direct and highly important impact on regional development. Sadly, all too often, quality firms struggle to scale due to a lack of adequate, tailored capital. FMO is excited to partner with Lendable as its proposition directly addresses this issue by bringing new capital to the table combined with their strong record of delivering competitive risk-adjusted returns for investors.”

Algene Sajery, Vice President of the Office of External Affairs and Head of Global Gender Equity Investments, DFC, says: “Our investment in the Fintech Credit Fund will help catalyze the next wave of commercial investment into emerging market fintech companies. Development finance institutions like DFC can play an outsized role in attracting different types of capital with different risk appetites to the sector. By supporting transformative fintech companies, DFC and our partners can achieve greater impact while expanding access to finance for underserved communities – particularly women – in emerging economies.”

Author Profile

Related Topics