TLG Capital today announced its exit from Branch International Financial Services Limited (Branch Nigeria), an investment made through its Credit Opportunities Fund (TLG COF).
2020 saw a challenging FOREX liquidity crisis hit Nigeria, triggered by a combination of COVID-19 and the worst oil price shock on record. TLG’s investment was made in Naira and repatriating its funds in USD successfully is a testament to TLG’s deep experience in the region, and specifically Nigeria.
Branch supports customers traditionally neglected by large financial institutions; its average loan size is US$22 and average tenor is 36 days. The company uses an algorithmic, machine-learning approach via its smartphone app to determine potential customers’ credit worthiness. Branch Nigeria is a fully owned subsidiary of Branch Inc, a (Delaware-registered, San Francisco based) fintech company with operations in Africa (Kenya and Nigeria), the Americas (Mexico) and Asia (India).
Premal Shah, Chief Business Officer at Branch said: “TLG has been an ideal investor. They took time to understand our work, have a wealth of experience working across Africa and were always asking how they might help further. Pioneering new ways to unlock capital access and improve customer value is challenging in any market, including Nigeria. TLG stands out for their energy, humility and acumen — making them a partner we look forward to working with again.”
Saad Sheikh, Principal at TLG said: “We are proud to have supported Branch’s vision which has a far-reaching impact: heralding cutting edge technology and user-friendly mobile services to open new channels for personal empowerment and financial growth. We are greatly impressed by their technology which allows customers to bypass hurdles imposed by bricks and mortar financial institutions.”
TLG COF was founded on the belief that financial and social returns can and should go hand in hand. Investments into companies like Branch support TLG COF’s stated aim of providing funding to capital starved entrepreneurs and SMEs in sub-Saharan Africa. SMEs are the main engines of job creation throughout Africa, estimated to account for 90% of all firms outside of the agricultural sector and providing nearly 80% of the regions employment.
In Nigeria, the example is more extreme: SMEs comprise 96% of the country’s business, compared with 65% in Europe. Pervasive challenges around funding, poor infrastructure, restrictive policies, and obsolete technology are holding back the growth of SMEs in Africa’s largest economy. TLG is pleased to be able to invest in the region and into companies such as Branch where problems such as these are addressed.
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About TLG Capital:
TLG Capital is an award-winning investment holding company that focuses on private equity and private debt opportunities. In a short span of time, the firm has built a reputation for achieving superior commercial returns. It has garnered the backing of some of the most prominent and reputable investors in the alternative investments space. www.tlgcapital.com