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Date: 9 December 2021

Verdant Capital advises Tugende on a significant additional funding to grow it’s portfolio, further driving social impact in it’s key markets


Tugende, East Africa’s leading innovative MSME credit and asset-financing business, has closed an additional USD 16 million in debt financing.  The overall funding round has been structured to include a subordinated debt tranche into the Ugandan subsidiary providing partial equity credit to be leveraged by senior lenders, as well as senior debt funding for its younger but rapidly growing Kenyan subsidiary. This latest round of debt funding was led by a leading European development finance institution (“DFI”), existing MSME-focused impact investors that increased their commitments to Tugende, and a decentralized credit platform backed by an iconic Silicon Valley-based venture capital firm. The combined investment strengthens Tugende’s balance sheet, allowing it to continue growing its portfolio and address a significant credit demand amongst MSMEs in East Africa. More importantly, Tugende continues to bring significant positive impact to its clients and their beneficiaries.

The MSME credit gap across sub-Saharan Africa amounts to more than USD 331 billion per year, with a gap of USD 37 billion in East Africa alone. Tugende’s business in Uganda and Kenya weathered the COVID-19 driven economic crisis and emerged on a strong and stable footing, allowing it to resume its pre-COVID growth trajectory. The company continues to expand its footprint in both markets and has increased its exposure to a broader range of assets including cars, minibuses, outboard motors, and appliances—all for business use. Equally important, Tugende continues to build upon its technology stack, raising its ability to gather and analyze an increasing array of data and information to complement its client experience while enhancing client loyalty. The company’s data analytics capabilities allowed its agile management to effectively manage risk in the dynamic and challenging environment created by the COVID-19 crisis.

Tugende has served over 52,000 clients with more than 20,000 having achieved ownership of at least one asset. More than 750 employees ensure the company remains the go-to provider of credit to MSMEs across East Africa and help keep Tugende’s market leading portfolio quality and cost of risk strong. Verdant Capital served as Tugende’s financial advisor and arranger with respect to the debt capital raise.

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