NAIROBI, Kenya, July 4 – Mogo Auto Ltd has raised Sh985.3 million ($7 million) from international investor to be lent to micro, small and medium enterprises (MSMEs).
The investment round came from Versant Capital Capital Hybrid Fund.
The investment will help Mogo Kenya expand its portfolio of motorbikes, tuktuks and motor vehicle financing.
These financed assets are usually the principal source of income for most of Mogo clients, with the firm’s business model providing an affordable route for its Kenyan customers to attain financial stability, ability to participate in economic activities and, in many cases, the first opportunity to have tangible wealth in the form of ownership of the financed motorbike and motor vehicle assets.
“The facility will help us provide thousands of self-employed entrepreneurs operating as motorbike and tuk-tuk taxi riders who collectively support Kenya’s thriving e-commerce sector with greater economic empowerment and asset ownership opportunities,” said Mogo Kenya country manager Domas Mineikis.
The financial services firm that recently announced reaching its 100,000th customer milestone, has embarked on an aggressive acceleration of facilitating upward social mobility across Kenyan communities by creating access to innovative and sustainable financial solutions.
With the Fund’s subordinated loan, the country manager added it will strengthen Mogo Kenya’s balance sheet and help “crowd-in” more senior debt funding to further grow its balance sheet.
“Verdant Capital Hybrid Fund was attracted by Mogo Kenya’s business model aligned with the Fund’s mission to use its funding to empower “bottom-of-the-pyramid” clients, while benefiting from fundamental credit risk mitigants,” said Verdant Capital managing director Edmund Higenbottam.
Verdant Capital Hybrid Fund is investing in inclusive financial institutions on a pan-African basis, with a focus on digitally enabled financial institutions providing services to micro, small and medium-sized enterprises.
Its current investments cover hybrid capital instruments, including subordinated debt, mezzanine instruments, preference shares and stapled investment structures.
The Fund has a size of USD 36 million as at First Close in December 2021 with a target of USD 100 million at Final Close in 2024.
