Alitheia Capital and Goodwell Investments have introduced their profitable exit from Baobab Nigeria, marking the primary exit of their joint uMunthu Fund.
In response to an announcement from the funding firms, the exit comes after greater than 12 years of funding, initially via the GWAMDC fund and later by way of the uMunthu Fund.
They famous that the exit can also be a testomony to the substantial development and {financial} stability Baobab Nigeria has achieved and the effectiveness of affected person capital in delivering each {financial} returns and significant social affect.
Causes for funding
In response to the traders, funding in Baobab (previously MicroCred) in 2012 was pushed by a shared imaginative and prescient {of financial} inclusion.
Their continued backing via the uMunthu Fund in 2015 marked the primary occasion of personal capital funding in northern Nigeria’s {financial} sector, beforehand dominated by growth finance establishments (DFIs).
- Moreover, they have been the primary native, on-the-ground traders in Baobab, bringing Nigerian illustration to its board for the primary time.
- Underneath their stewardship, Baobab Nigeria underwent a change, evolving from a single-unit microfinance establishment (MFI) into one of many nation’s top-tier nationwide MFIs.
- Alitheia and Goodwell performed a crucial position on this evolution by offering hands-on governance help, {financial} structuring recommendation, and entry to important native networks.
Reflecting on this journey, Alitheia Managing Accomplice, Tokunboh Ishmael, remarked:
“This was a {bank} that was working out of a single room in northern Nigeria after we invested, and immediately it’s a top-three nationally licensed microfinance {bank}.
“We’ve walked a journey of management, governance, and {financial} and impactful development, scaling from small beginnings via to the top-tier nationwide microfinance {bank} that it’s immediately.
“We’re happy with what’s been achieved collectively and stay up for seeing the place the long run will take Baobab Nigeria.”
Driving {financial} inclusion and enterprise development
On the onset of the funding, an estimated 70% of Nigeria’s inhabitants lacked entry to {financial} companies, with the scenario much more extreme in northern Nigeria.
By 2023, authorities information confirmed that {financial} exclusion had dropped to 26% nationwide.
“Because the preliminary funding in 2012, Baobab has reached 12 instances extra prospects via 7.6 instances extra {bank} branches, with the help of three.2 instances extra employees.
“All this while the typical mortgage and deposit sizes remained small, at NGN 2 million (EUR 1,250) and NGN 91,000 (EUR 58), confirming Baobab’s ongoing dedication to reaching underserved audiences. Throughout this time, the corporate’s steadiness sheet elevated 37 instances and its mortgage guide dimension elevated 43.5 instances.
“The {financial} worth of uMunthu’s funding tripled in naira worth through the holding interval, really demonstrating what is feasible with affected person capital,” the assertion learn.
A brand new chapter for Baobab Nigeria
The exit of Alitheia and Goodwell marks the start of a brand new part for Baobab Nigeria, the establishment is now totally owned by its worldwide mother or father firm, Baobab Group, which seeks to maintain and broaden its affect in Nigeria.
With extra exits anticipated in 2025, Alitheia and Goodwell are actually coming into the ultimate fundraising part for his or her uMunthu II Fund, in search of traders keen to duplicate the success and affect demonstrated by Baobab Nigeria.
