Uganda: Watu Credit Raises $7M For Expansion

Watu Credit has secured a $7 million investment from Verdant Capital to expand its operations in Uganda.

Uganda is the start-up’s second largest market after Kenya, where the business was first established in 2015. It is one of the country’s leading asset financing companies, specifically for motorbike taxis. The business model accommodates and creates opportunities for the unbanked and financially underserved population.

According to a press release by Verdant Capital, the investment drawn from its Hybrid Fund will help Watu expand its footprint of two-wheeler financing throughout the country.

“Watu’s business model provides an affordable route for riders to attain financial stability, the ability to participate in the economy and, in many cases, the first opportunity to have tangible wealth in the form of ownership of a motorbike. The Fund’s subordinated debt investment will strengthen Watu’s balance sheet and help “crowd-in” more senior debt funding to further grow its balance sheet,” Verdant Capital said.

Watu says they have provided over 370,000 loans across 6 countries. The start-up’s operations are backed by the strong use of technology, including automated processes, GPS tracking tools for the motorbikes and the exclusive use of digital payments via mobile money wallets.

The Verdant Capital Hybrid Fund is a $100 million fund (target final closing). The fund targets high developmental impact, including job creation and income generation through SMEs and micro-entrepreneurship. It focuses on specialist banks, microfinance institutions, leasing, and factoring companies, fintech and other non-bank financial institutions.