Verdant Capital Hybrid Fund Completes its first investment, in Watu Credit Uganda Limited
The investment of USD 7 million will help Watu expand its footprint of two-wheeler financing throughout the country
The Fund is targeting high developmental impact, including job creation and income generation through SMEs and micro-entrepreneurship
Verdant Capital (www.Verdant-Cap.com) is pleased to announce that its Verdant Capital Hybrid Fund (the “Fund”) has made its first investment, in Watu Credit Uganda Limited (“Watu”). The investment of USD 7 million will help Watu expand its footprint of two-wheeler financing throughout the country. This represents an important milestone for Watu in Uganda, it’s second largest market after Kenya, where the business was first established in 2015. In addition, Watu is expected to benefit from initiatives supported by the Fund’s technical assistance facility.
Watu is one of Uganda’s leading asset financing companies, specifically for two-wheelers. The business model accommodates and creates opportunities for the unbanked and financially underserved population. Watu’s operations are backed by the strong use of technology, including automated processes, GPS tracking tools for the motorbikes and the exclusive use of digital payments via mobile money wallets.
The Fund’s investment will provide Watu with more capital to finance motorbike taxis across Uganda. These motorbikes are usually the principal source of income for the riders. Watu’s business model provides an affordable route for riders to attain financial stability, the ability to participate in the economy and, in many cases, the first opportunity to have tangible wealth in the form of ownership of a motorbike. The Fund’s subordinated debt investment will strengthen Watu’s balance sheet and help “crowd-in” more senior debt funding to further grow its balance sheet. The Fund was attracted by Watu’s business model aligned with the Fund’s mission to use its capital to empower “base-of-the-pyramid” clients, while benefiting from fundamental credit risk mitigants.
The Verdant Capital Hybrid Fund is a USD 100 million fund (target final closing). The Fund is targeting high developmental impact, including job creation and income generation through SMEs and micro-entrepreneurship. The Fund is investing hybrid capital and subordinated debt instruments into inclusive financial institutions on a pan-African basis. The Fund is targeting specialist banks, microfinance institutions, leasing, and factoring companies, fintech and other non-bank financial institutions. A strong focus will be to ensure that the investments comply with high environmental and social standards.
Distributed by APO Group on behalf of Verdant Capital.
Liezel van Greunen,
T: +27 10 140 3700
T: +255 764 880 336
About Verdant Capital:
Verdant Capital is an investment manager and investment bank specialising in the private capital markets and operating on a pan-African basis. Verdant Capital is the manager of the Verdant Capital Hybrid Fund. www.Verdant-Cap.com
Watu is an Asset FinTech revolutionising financial inclusion across Africa. The company is building an ecosystem for unbanked and underserved individuals by providing access to tools that enhance digital literacy, economic growth, quality of life and opportunity. So far, Watu has provided over 380,000 loans across 7 countries and has positively impacted the lives of more than 2 million people. Watu actively promotes financial literacy and independence, adoption of digital payments and increased regulatory and safety compliances. https://WatuAfrica.com/