Tech-enabled finance platform, Lendable Inc secured US$1.5Million (Kes.156.Million) in debt finance for Mombasa based Watu Credit for a programme to help more ‘boda boda’ (motorcycle taxi) drivers to get an opportunity to own their own vehicles.
The programme, arranged by Lendable, is secured using future repayments on loans advanced by Watu Credit to its ‘boda boda’ clients. In 2015, the Motorcycle Assemblers Association of Kenya estimated that on average 8 million Kenyans used a ‘boda boda’ daily, generating USD.3.9Million (Kes400.00Million) in revenue.
Andris Kaneps, CEO of Watu Credit says, “We’ve benefited from time and cost savings in using Lendable’s digital deal platform. This form of financing means Watu Credit can access working capital to grow its loan book, without having to tie up its balance sheet.”
Watu Credit will use the capital to grow its capacity to finance the sale of boda boda motorcycles on credit, by a magnitude of 10x and extend its geographical coverage across Kenya, moving into Central, Rift and Western Kenya by the end of 2018.
Lendable is mainstreaming off-balance sheet financing for alternative lenders whose customer base is small and micro businesses. Lendable’s risk engine, Maestro, digests and analyses individual monthly repayment data and alternative lender financials. It produces credit data and loan repayment forecasts that can meet the needs of global commercial lenders.
Daniel Goldfarb, CEO and co-founder Lendable commented: ” Adding even just one productive asset to someone’s mix, can start a positive economic cycle, allowing him or her to create more assets and pay down liabilities. We’re proud to help Watu Credit scale up through the provision of credit and free access to analytics.”
Los Angeles-based Shinnecock Partners are the sole investor and it marks the firm’s first investment in Africa.
Alan Snyder, Founder and Managing Director, Shinnecock Partners says, “This is our first such investment in debt secured by receivables originating in Africa. It would not have been possible, if we did not have confidence in Lendable’s on the ground due diligence and the predictive capabilities of the Maestro risk engine.”
Lendable provides a range of essential deal services: deal origination, due diligence, standardized documentation, customizable online pricing models, payments administration and post-deal reporting. Investors on Lendable’s platform can login and monitor the performance of their investments in real-time.
This is the first receivables financing deal done by Lendable in Kenya that uses three-wheelers and motorcycles to secure the loan. It follows Lendable’s successful transaction with Uganda-based Tugende, who offer a lease-to-own model for Ugandan boda-boda drivers.