The Dutch Development Bank FMO has extended a convertible grant to Kenyan-based Fintech platform Lendable providing a ‘first loss’ backstop that is expected to unlock an additional USD 4.5 million from commercial investors.
Founded in 2014, Lendable, provides structured finance facilities to fast-growing alternative lenders across African markets, including off-grid energy companies, small and medium-sized enterprise (SME) lenders and asset finance companies.
The USD 450,000 convertible grant that is being provided by the Dutch government’s MASSIF fund, managed by FMO will be used disbursed through local financial intermediaries and institutions that can contribute to their development.
“The ability to harness cutting-edge technology is key to unlocking alternative lending channels in African markets and reducing the financial exclusion of smaller enterprises, which is exactly what Lendable’s proprietary platform and securitization capabilities offer.” Said Martin Steindl, FMO’s manager for the convertible grant programme under MASSIF.
Lendable’s ‘Maestro’ technology platform allows for direct data integration with these alternative lenders, including loan portfolio data analysis and cash flow predictions.
Maestro also provides high-quality portfolio management information to alternative lenders and investors in Lendable’ s SPVs.
This is increasingly popular with investors who have traditionally struggled to get a detailed price, risk and portfolio quality metrics from impact-focused lenders.
“By working with FMO we can scale-up the volume of capital reaching SMEs and consumers in our markets as well as to support our partners in implementing the Responsible Finance Guidelines. As we scale, finding parties like FMO that are willing to invest alongside Lendable to de-risk commercial investment is key to our success.” Said Daniel Goldfarb, CEO of Lendable