May 3, Nairobi, Kenya - Today Lendable announced that it has completed its first receivable financing transaction, creating a new high-yield, high-impact asset class. This deal’s unique data-driven approach to structuring is the first-ever for receivable financing in emerging economies.
For this offering, Lendable partnered with Tugende, an asset financing company, or originator, in East Africa. Tugende is one of Uganda’s most promising asset finance companies, specialising in lease-to-own financing for motorcycle taxi drivers, known as boda bodas. According to Tugende, ownership doubles profits for drivers, and Tugende provides added value including training and insurance.
“Tugende is one of the most innovative asset finance businesses we have seen,” said Daniel Goldfarb, Co-Founder & CEO of Lendable. “They mix novel technology with best in class operations and customer service. Financially, their product is a no brainer for their customers, and you can see this in both their growth and repayment rates. Now that they have proven their model, they need more capital to reach scale in the market.”
Three global institutional investors purchased the credit contracts from Tugende for hundreds of Ugandan boda boda entrepreneurs. This transaction has enabled Tugende to give more motorcycles to self-employed entrepreneurs and expand their reach across Uganda.
“There are at least one million full time motorcycle taxi drivers across East Africa, and since day one, we’ve struggled to keep up with our large waiting list in Uganda in terms of constantly raising new funds to buy more motorcycles,” said Michael Wilkerson, CEO, of Tugende. “Partnering with Lendable helped us grow faster by matching new financing to meet our demand with the quantitatively provable security of our existing portfolio performance. In addition, Lendable’s experience and technology have added new insights into how we manage our portfolio and help thousands of customers own their income generating asset as quickly as possible.”
This transaction relied on Lendable’s robust quantitative models to assess deal risk and determine pricing through its proprietary Risk Engine. Lendable developed the financial structure of this transaction, allowing both investors and Tugende to avoid the expensive structuring costs that a similar deal would normally incur. As part of this process, Lendable also provided analytics to Tugende, helping improve their receivable quality. As a result, Lendable and Tugende have worked together to improve the advance rate to Tugende—a trend both sides hope will continue. Lendable’s approach makes receivable financing transactions more easy, fast and affordable for both investors and originators.
In addition to partnering with Tugende, Lendable has signed additional East African asset-backed financing companies on forthcoming receivable financing transactions through its platform. To create greater standardization in the industry, these transactions will utilize the same Standard Receivable Financing structure, with investors basing pricing on Lendable’s Risk Engine.
Lendable helps originators move beyond chasing one-off impact checks to scalable commercial forms of financing. Lendable provides cutting-edge analytics through its proprietary Risk Engine, off the shelf legal and accounting through its Standard Receivable Financing structure, and access to scalable investors.
Tugende is an asset finance company helping people take control of their economic futures by owning the productive assets they use to make a living. Over the past 4+ years, Tugende have provided lease-to-own financing of motorcycles to over 5000 motorcycle taxi drivers (boda bodas) in Uganda, helping them own their own bikes in 19 months or less. Ownership for these drivers doubles take home income, and Tugende also provides training, insurance, and in depth customer support. As Tugende grows it will leverage its staff, systems and growing customer database to finance other assets, improve access to credit and help customers move themselves up the economic ladder.
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