A pan-African alternative investments firm, TLG Capital, and a financial infrastructure company, OnePipe, on Thursday launched a N2.25 billion collateralised credit facility to the informal sector in Nigeria.
Isaac Marshall, an Investment Professional in TLG, said in a statement that the deal, which was completed by TLG Africa Growth Impact Fund (AGIF) represented TLG Capital’s 34th investment.
Marshall said that the deal was to help the 38 million enterprises that were the most neglected segment of Nigerian businesses, avoided by both the fintechs and traditional financiers.
He said the partnership would help the businesses to obtain both credit and better purchasing terms and thereby provide sustainable income growth to millions of micro-enterprises.
“TLG Capital’s investment in OnePipe aligns with several Sustainable Development Goals, including SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), and SDG 9 (Industry, Innovation and Infrastructure).
“By providing credit to informal micro-businesses, OnePipe is helping to create sustainable income growth and promote economic development.
“TLG Capital and OnePipe are excited to collaborate on this initiative and look forward to working together to promote financial inclusion and economic growth in Nigeria,’’ he said.
Marshall said that the investment would be used to provide inventory finance to small shops in Nigeria.
Chief Executive Officer, OnePipe, Ope Adeoye said that TLG’s extensive experience in structuring debt in Nigeria and their deep network across Africa made them the partner of choice.
Adeoye said that TLG is OnePipe first debt partner and had been a powerful resource in planning growth and balance sheet strategy.
He said that through this partnership, Onepipe would build the infrastructure to provide credit and payment services to the two-thirds of Nigerian business owners who do not have access to effective and practical banking services.
According to him, OnePipe is a fast-growing financial infrastructure company that enables merchants to access goods on credit from larger distributors who work with OnePipe.
Adeoye said that the company had built an extensive network of field officers and partners, including banks, and payment service providers.
The CEO said that the investment by TLG Capital would allow OnePipe to expand its operations with a vision of becoming a leading provider of financial services to the informal sector in Nigeria.
According to the International Labour Organization, the informal sector accounts for over 85 per cent of employment in Africa, providing financial access to this sector is crucial for economic development and poverty reduction.
“OnePipe’s model is well-positioned to address this need, and TLG Capital’s investment will help to support this effort,’’ Adeoye said.