Lendable, an emerging markets fintech financier has revealed in a statement that it is planning to raise a $100 million fund to invest in African and Asian fintech companies.
The new fund, which the firm dubbed the MSME Fintech Credit Fund will provide credit to African and Asian fintech companies so they can offer credit facilities and financial services for more than 150,000 small businesses.
Earlier in March, the firm announced it was raising funds between $120 million to $180 million to give new loans to fintechs so they could then provide credit, asset finance, payments and remittances to individual customers and businesses in emerging markets. However, it’s not clear whether this new fund is related to the one announced in March.
Founded in 2016 by Daniel Goldfarb and Dylan Fried, Lendable has provided more than 1.4 million consumer and small business loans, over 80,000 productive asset loans and more than 105,000 solar home systems. In addition, Lendable says it has delivered an annualized net return of 14.32% to its investors. Per the announcement, this is Lendable’s fourth fund.
So far, the fintech lender has closed $49 million from impact investors such as DFC, EMIIF (DFAT), Calvert Impact Capital, Ceniarth, BIO, FMO and FSD Africa. It expects to close another $20 million this fourth quarter before a final hard close in 2022.
The first close takes Lendable’s overall committed capital to more than $200 million, although it has managed a pipeline of over $400 million since launching in 2016, per the firm’s statement. The lender has also disbursed $180 million in that timeline.
“We have had an amazing response to this Fund and have brought on board an impressive slate of leading impact investors and DFIs who back our approach,” Goldfarb said in a statement. “Through our fintech investments, we are providing essential working capital for MSMEs that enables off-grid customers buy energy products and opens the door to innovative digital banking services to consumers.”
Lendable has provided debt financing to several fintechs from nine emerging markets. Some include Tugende, Carbon, Uploan, KoinWorks, Planet42, FairMoney, Trella, Payjoy, Solar Panda and MFS Africa. The fintech financier said its debt facilities range between $2 million to $15 million, with a payback duration between three to four years. So far, Lendable has a default rate of about 0.01%, said a company’s spokesperson in an interview with TechCrunch this year.