Fintech firm Tugende raises $10m in new capital to expand regional reachIn Uganda, the firm is best known for offering loans to people buying motorcycles to join the commuter transport industry.
Tugende, a fintech that offers credit and asset financing for micro, small and medium enterprises (MSMEs) across East Africa, has raised $10 million from both existing and new shareholders, led by Partech and Women’s World Banking respectively. In Uganda, the firm is best known for offering loans to people buying motorcycles.
US-based Partech, is one of the most active tech investors in the world, currently investing funds in seed, venture and growth stages of about 200 enterprises in nearly 40 countries.
CJ Juhasz, Chief Investment Officer of Women’s World Banking Asset Management said, “We’re excited to join Tugende’s journey. Tugende is a leader in reaching and de-risking underserved individuals and businesses for financial services to grow and create jobs. Women’s World Banking is dedicated to economic empowerment, and we are particularly keen on investing at the intersection of mobility and finance, as the empowerment potential for individuals, especially women, is multiplied. We look forward to teaming up with Tugende as it drives financial inclusion pan-Africa and increases the number of women served in its business ecosystem.”
The new investors add to the diversity of Tugende’s shareholding and complement the experience and skills that each contribute to Tugende’s growth. Along with a recent debt closing, the combined $10 million investment further strengthens Tugende’s balance sheet, allowing it to increase portfolio growth and address a significant credit demand amongst MSMEs, particularly after the strict lockdowns of 2020 and 2021.
Michael Wilkerson, co-founder and CEO of Tugende, said, “Tugende is committed to innovation and partnerships that remove barriers for people and businesses to build better futures. With partners such as WWB on board, Tugende will benefit from the added expertise in delivering Tugende’s Gender Action Plan and activating more women entrepreneurs in Tugende’s ecosystem.”
Tugende’s business has emerged from the Covid-19 crisis on a strong and steady footing and is back on its high-growth trajectory. The MSME credit gap across sub-Saharan Africa is estimated to be more than $331 billion, with a gap of $37 billion in East Africa alone.
The company continues to expand its footprint in Uganda and Kenya and, in addition to its strong core package for motorcycle taxis, has increased its exposure to a broader range of income generating assets including four-wheeled vehicles, outboard motors (boat engines), and appliances—all for business use. All client financing packages include comprehensive insurance (product, medical, life), safety equipment, ongoing support, and a digital credit profile which enables successful clients and their communities to earn new opportunities such as top-up loans and enhanced insurance.