Alitheia Capital and Goodwell Investments have exited Baobab Nigeria after 12 years, reflecting Baobab’s growth and financial stability. Their investment aimed to enhance financial inclusion in northern Nigeria, resulting in significant impacts on access to microfinance. The exit marks a new phase for Baobab Nigeria as it is now fully owned by Baobab Group, with future fundraising plans underway.
Alitheia Capital and Goodwell Investments have successfully exited Baobab Nigeria, marking the first exit of their joint uMunthu Fund after over 12 years. Their investment journey began with the GWAMDC fund before transitioning to the uMunthu Fund, highlighting Baobab’s growth and stability as an example of effective patient capital that balances financial returns with social impact.
The initial investment in Baobab (formerly MicroCred) in 2012 was driven by a vision of enhancing financial inclusion, particularly in northern Nigeria, where private capital investments were scarce. By 2015, their support through the uMunthu Fund represented a significant private capital investment in the region’s financial sector, previously dominated by development finance institutions. They also ensured local representation on Baobab’s board, contributing to the institution’s evolution from a single-unit microfinance institution to one of Nigeria’s leading microfinance banks.
Alitheia and Goodwell’s involvement greatly enhanced Baobab Nigeria’s governance, financial structuring, and local network access. Managing Partner Tokunboh Ishmael reflected on the transformation: “This was a bank that was operating out of a single room… and today it is a top-three nationally licensed microfinance bank. We’ve walked a journey… and we’re proud of what’s been achieved together.”
When the investment began, approximately 70% of Nigeria’s population was financially excluded, particularly in the north. Government data from 2023 showed this percentage reduced to 26%. Since 2012, Baobab has expanded its reach 12-fold, increasing its branches by 7.6 times and staff by 3.2 times while maintaining small average loan and deposit amounts, thereby helping underserved populations. The company’s assets surged, with a 37-fold increase in balance sheet size and a 43.5 times larger loan book during the investment period. The statement affirmed, “the financial value of uMunthu’s investment tripled in naira value during the holding period.”
The exit of Alitheia and Goodwell heralds a new chapter for Baobab Nigeria, as it transitions to being fully owned by its international parent company, Baobab Group, which aims to enhance its impact in Nigeria. Looking ahead, Alitheia and Goodwell are preparing for the final fundraising phase of their uMunthu II Fund and anticipate further exits in 2025.
The exit of Alitheia Capital and Goodwell Investments from Baobab Nigeria underscores the successful journey that began over 12 years ago, highlighting the growth and financial stability achieved by Baobab. Their support fostered significant advancements in financial inclusion, sustainable governance, and community impact in northern Nigeria. The next phase for Baobab, now fully aligned with Baobab Group, promises continued expansion and influence in the microfinance sector. Alitheia and Goodwell’s next steps involve enhancing their investment strategy through the uMunthu II Fund.
Original Source: nairametrics.com
