TLG Capital, One Pipe seal N2.25bn credit facility to finance Nigerian SMEs
By Business AM
TLG Capital, a pan-African alternative investments firm, has partnered with OnePipe, A Nigerian Fintech startup, to provide credit services to the informal sector in Nigeria through a collateralized credit facility worth N2.225 billion. The deal was completed by the TLG Africa Growth Impact Fund (AGIF) and represents TLG Capital’s 34th investment,with the collaboration aimed at promoting financial inclusion and economic growth in Nigeria.
OnePipe is a fast-growing financial infrastructure company that enables merchants to access goods on credit from larger distributors who work with OnePipe. The company has built an extensive network of field officers and partners, including banks, and payment service providers. It has also secured a strong roster of equity investors, including Atlantica Ventures, P1 Ventures, Norrsken Foundation, Techstars, Tribe Capital, V&R Associates, Canaan Partners, DFS Labs, Ingressive Capital, Acquity, Raba, Saison Capital, The Fund, and Two Culture Cap.
The recent investment by TLG Capital will allow OnePipe to expand its operations and develop its technology platforms and enable traditional businesses to embed financial services into their operations. It is also expected to boost the company’s vision of becoming a leading provider of financial services to the informal sector in Nigeria.
Commenting on the deal, Ope Adeoye, the CEO of OnePipe, said: “TLG’s extensive experience structuring debt in Nigeria and their deep network across Africa, particularly in venture, made them the partner of choice as we look to scale. TLG is our first debt partner and has been a powerful resource in planning our growth and balance sheet strategy.”
Adeoye explained that through the partnership, OnePipe is looking to build the infrastructure to provide credit and payment services to the two-thirds of Nigerian business owners who don’t have access to effective and practical banking services.
Isaac Marshall, an investment professional at TLG, noted that Nigeria’s $220 billion cash-based informal sector comprises 38 million enterprises that are the most neglected segment of Nigerian businesses, avoided by both the fintechs and traditional financiers.
“With a clever product to help these businesses to obtain both credit and better purchasing terms on their goods, OnePipe has pioneered a model that can provide sustainable income growth to tens of millions of micro-enterprises,” he remarked.
Citing a report by the International Labour Organization (ILO),OnePipe observed that the informal sector accounts for over 85 per cent of employment in Africa. To this end, the company noted that providing financial access to the sector is crucial for economic development and poverty reduction. The company further disclosed that its model is well-positioned to address the financial need,noting that TLG Capital’s investment will help to support the effort.