Lendable Inc., an emerging market fintech credit provider, is targeting a $100 million closed-ended fund focused on emerging and frontier market fintech investments.
The Lendable MSME Fintech Credit Fund will provide credit to African and Asian fintech companies, which offer credit facilities to micro, small and medium enterprises.
The fund will help more than 150,000 MSMEs get access to financial services and provide investors with impact exposure to key markets, Lendable said.
“Through our fintech investments, we are providing essential working capital for MSMEs that enables off-grid customers to buy energy products and opens the door to innovative digital banking services to consumers,” said Daniel Goldfarb, co-founder of Lendable.
The fund has been backed by leading impact and development financial institution (DFI) investors. It has made a soft close at $49 million with commitments from US International Development Finance Corporation, Australia’s Emerging Markets Impact Investment Fund (EMIIF), Calvert Impact Capital, Ceniarth, Belgium’s BIO, Dutch development bank FMO and FSD Africa (FSDAi).
The five-year blended finance fund expects to raise another $20 million in the current quarter and is aiming at a hard close above $100 million in 2022.
The new vehicle is a Luxembourg Reserved Alternative Investment Fund, with FSDAi and EMIIF providing the first loss capital tranche.
Lendable says its proprietary risk engine analyses live borrower data from its investee fintech CRMs, opening-up granularity across the entire loan book. This enhances loan underwriting and allows for more effective and efficient risk management. This technology has shown its predictive power, by forecasting the impact of adverse weather, election unrest, COVID-19 lockdowns, and other local events.
Lendable was launched in Nairobi in 2015 by Daniel Goldfarb and Dylan Fried. It says its goal is to get 100 million people access to crucial financial services.
The new fintech fund is Lendable’s fourth investment vehicle. With the soft close, it takes the firm’s overall committed capital to over $200 million.
Lendable says it has delivered an annualised net return of 14.32% to investors since its inception in October 2016 through August 2021.
It has made $180 million disbursements and has a pipeline of over $400 million. Its direct investments span nine countries.