Launched in 2012 in Uganda, Tugende started by offering motorcycle loans to riders and has since expanded to offer loans for everything from fishing boats and minibus taxis to sewing machines and refrigerators for small shops. It opened a branch in Kenya last November.
The investment in Tugende came from Mobility 54, the investment fund for Toyota Tshusho Corporation as part of $6.3 million Tugende raised in its Series from an investment round this month.
“We see a huge potential for Tugende business in the taxi market,” Mobility 54’s chief executive officer Takeshi Watanabe told Reuters, evaluating that many minibus taxis were Toyotas.
Watanabe said the group was focused to invest $45 million in transportation and asset-financing start-ups like Tugende in Africa next year.
The financing bridge for micro, small and medium enterprises in sub-Saharan Africa is estimated at $331 billion, according to a 2017 report by the International Finance Corporation, the private investment arm of the World Bank.
Development organizations say the kind of microlending Tugende is providing is crucial to close that gap.
With an asset base of $30 million, the start-up has handed out about 35,000 bike “mortgages” so far in Uganda, which Tugende estimates has about 800,000 riders.
Wilkerson said Tugende was seeking further $40 million in debt and equity to expand its existing motorcycle mortgages, grow its new motor vehicle financing product and enter new markets in the region.
