Knowledge

Author: Edmund Higenbottam

Category: ,

Date: 20 May 2019

Verdant Capital Secures Debt Financing of USD 6 million for Tugende, a Leading Ugandan Fintech Leasing Business

 

Verdant Capital secures USD 6 million of debt funding for a leading Ugandan technology-driven leasing business.

The funding is part of Verdant Capital’s overall funding programme for Tugende from international specialist investors for the expansion of Tugende’s productive asset finance portfolio, the bulk of which is leases for motorcycle taxis. This debt funding programme has strengthened Tugende’s diversification of its funding base and represents a strong platform for further successful raises from the international specialist market internationally. Part of the funding shall be drawn immediately, and part shall be drawn following the completion of the forthcoming equity round, on which Verdant Capital is also advising.

Tugende was founded in 2010 and is headquartered in Kampala, Uganda with ten branches broadly covering the busiest towns and districts in the Central, Southern and Eastern Regions of the country. Tugende has significant scope to grow geographically. It is the leading provider of productive asset financing for motorcycle taxis known locally as “boda-bodas,” having served over 20,000 clients. Tugende is currently piloting car financing and other standalone business assets as well as add-ons for high performing lease customers including smartphones and sewing machines.

Tugende has achieved significant social impact with 8 000 of its customers having achieved ownership of their motorcycles to date. Survey data shows that 55% of its clients have invested in business, land, agriculture, or new homes; and 48% using savings towards education or healthcare. Over, 70,000 household members benefitted from better income, job stability or health and life insurance coverage.

Tugende’s financial performance in 2018 and 2019 year to date has demonstrated the significant operational leverage and expertise embedded in the business. Tugende maintains a strong, asset-backed portfolio driven by technology and social screening as well as high engagement relationships with clients. Tugende’s on-time payments, arrears, defaults and write-offs significantly outperform commercial banks and MFI lenders in the region.

 

 

 

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