Capital Alitheia and Investments Goodwell successfully conclude exit from Baobab Nigeria's investment within uMunthu Fund managed by them.
Baobab Nigeria, an inclusive financial institution, has made significant strides in delivering banking services to individuals and small and medium-sized enterprises (SMEs) in underserved areas of sub-Saharan Africa. The institution's growth is particularly noteworthy in northern Nigeria, where it has contributed significantly to closing the financial inclusion gap.
Under the investment of Alitheia Capital and Goodwell Investments, Baobab Nigeria became the first local investors on its board and the first private capital investors in northern Nigeria. This pioneering effort has been instrumental in the institution's growth and impact.
By 2023, government statistics reported that 26% of Nigerians still lacked access to financial services, a substantial improvement from previous years. Baobab Nigeria's significant expansion has been a testament to leadership, governance, and impactful financial growth, according to Alitheia Capital. The institution now serves 230,000 customers across 16 Nigerian states, operating through a network of 38 branches.
Baobab Nigeria's growth is evident in its SME lending footprint. Products like Crédit Sme+ facilitate business growth and financial inclusion, supporting SMEs in Nigeria. The institution's backing of fintech innovations, including the acquisition of CreditCheck's US-based credit underwriting firm, signals an expansion in credit access and digital financial services linked to Baobab Group’s broader ecosystem.
The impact of Baobab Nigeria aligns with a regional trend where financial institutions and investment partners emphasize digital lending and microfinance solutions to expand access for underserved populations and MSMEs. This includes cross-border fintech services within West Africa and integrated models combining traditional banking with digital financial products.
Investments supporting MSME lending and inclusive finance characterize the environment where Baobab operates, suggesting positive momentum and deeper financial inclusion across African markets. Institutional growth supporting inclusive economic development and gender empowerment, such as the USD 10 million financing from Swedfund in East and Southern Africa for MSME lending, further strengthen Baobab Nigeria's capacity.
Tokunboh Ishmael, Managing Partner at Alitheia Capital, expressed pride in Baobab's transformation to one of the top three nationally licensed microfinance banks in Nigeria. The uMunthu Fund played a key role in professionalizing the bank, improving governance, and facilitating its growth from a microfinance institution to one of Nigeria's top national MFIs. The investment in Baobab Nigeria began in 2012, and continued through the uMunthu Fund in 2015.
Alitheia and Goodwell's investment in Baobab marked a pioneering effort in the financial sector of Nigeria. Despite exiting their investment in Baobab Nigeria, marking the first exit from their joint uMunthu Fund, both firms remain committed to their hands-on approach with the uMunthu portfolio and anticipate further exits in 2025. The financial success of uMunthu's investment was evident, with the fund's value tripling in Naira terms.
The uMunthu II Fund is currently in its final fundraising phase, seeking investors for the next success story inspired by Baobab Nigeria's impact and growth. The fund's focus on investing in financial institutions committed to delivering inclusive banking services to underserved areas aligns with Baobab Nigeria's mission. Baobab Nigeria maintained a strong commitment to its inclusive customer base, with average loan and deposit sizes remaining small despite the bank's rapid expansion.
In summary, Baobab Nigeria's ongoing impact in promoting inclusive SME financing with growing support from strategic investors and fintech-enabled services positions it as a key player in Nigeria’s financial inclusion landscape. The institution's growth and success serve as a model for other financial institutions aiming to expand access to financial services in underserved areas of sub-Saharan Africa.
- Baobab Nigeria's growth and impact, given its focus on SME lending, technical innovations, and financial inclusion, has been made possible through venture capital investments like that of Alitheia Capital and Goodwell Investments.
- The uMunthu II Fund, which is currently seeking investors for its next success story, is inspired by Baobab Nigeria's achievements in enhancing financial inclusion, particularly among small and medium-sized enterprises (SMEs) and underserved populations.
- By promoting strategic investments, digital financial services, and business growth products like Crédit Sme+, Baobab Nigeria has not just grown its customer base but also contributed to the regional trend of prioritizing financial inclusion for individuals, businesses, and small-scale enterprises (SMEs) in sub-Saharan Africa.
