Tugende launches boat engine financing, further strengthening its product portfolio
Since launching its business in 2012, Tugende has consistently delivered strong growth while maintaining industry-leading portfolio quality. Tugende is a technology-driven innovative financial services company providing financing of productive assets and related services to its clients, including to family members. Although the business was originally focused on one product, motorcycle taxis, in one country, Uganda, the company launched its Kenyan operations 18 months ago and is successfully scaling its business in that market. To enhance its growth profile, Tugende conducts a diligent product development process that screens assets that have a latent demand for credit from MSMEs, runs a pilot project in a test market, and culminates in the formal launch of the best performing products. After having successfully launched cars and mini-buses, Tugende has now launched outboard motors serving the fishing sector which is significant in lake areas in East and Central Africa, as well as in coastal regions in much of Africa as a whole.
Like motorcycle taxis, new products must balance client needs for credit with strong repayment behaviour. These requirements are inherent in the fishing sector as each stakeholder (fisherman, transporter, etc.) plays a critical role in ensuring food security by providing a staple food and is, therefore, resilient to economic headwinds as witnessed during the COVID-19 related lockdown. Interestingly, unlike motorcycle taxis and other vehicle assets, boat engine clients have a greater proportion of women clients, which allows Tugende to broaden its social and economic impact in the communities, especially rural ones, it serves. By the time it formally launched the boat engine product, Tugende had built a strong pipeline of clients which it continues to grow given the pent-up demand in an underfunded and highly valuable business sector.
Over the medium term, Tugende intends to onboard additional new products across the markets it serves through its proven product development approach. More than 47,000 customers have benefited from Tugende’s financing which has improved the lives of more than 230,000 household members. Tugende intends to announce further geographic expansion later this year. Verdant Capital acts as the company’s financial advisor.