Dutch development bank FMO is considering a five-year mezzanine loan of $5 million for a fintech credit fund targeting African and Asian businesses by emerging market debt provider Lendable Inc.
FMO said in a proposal dated October 26 that the planned investment in Lendable’s FinTech Credit Fund I will “enable financial inclusion of the underserved MSMEs [micro, small and medium enterprises]”.
The fund has a $100 million target and will finance the growth of 25 lending companies across Africa and Southeast Asia, Lendable said in a statement in May 2019.
“Through these lending companies, the fund will finance upwards of 40,000 small businesses, 200,000 solar home systems, and 300,000 consumer loans,” it said.
The fund invests in senior-secured and off-balance sheet debt facilities to fintech companies in the selected regions. These facilities will be secured using a suite of structural enhancements Lendable developed to allow it to operationally effect control of inbound cash, the company added.
Established in 2014, Lendable operates a capital markets platform to provide structured finance to alternative lenders across the frontier and emerging markets, including off-grid energy companies, MSME lenders, consumer lenders and asset finance companies.
Lendable claims it has deployed over $50 million to fintech companies enabling financial inclusion.
In May this year, the platform provided a $10 million funding for Indonesian startup KoinWorks to help with the latter’s support of local SMEs. This was the first transaction by Lendable in Asia.
Meanwhile, FMO earlier supported Lendable’s initiatives to support alternative lenders in Africa in 2018.
The Dutch government’s MASSIF fund, managed by FMO, then gave a $450,000 convertible grant to Lendable, which was then expected to unlock an additional $4.5 million funding from commercial investors, the fintech asset manager said in another statement.