Untu Raises International Capital01 Sep 2012
Zimbabwe microfinance company Untu raises expansion capital
Untu Holdings Limited (‘Untu’), a Zimbabwe microfinance institution, is pleased to announce the completion of an equity investment from a consortium of three international investors. The additional capital will assist Untu to expand its operations and meet the growing demand for financial services from small businesses across Zimbabwe. The consortium includes Maris Capital, African Century Financial Services and Sub-Sahara Capital, who are excited to support Zimbabawe’s underbanked yet dynamic small business sector.
Untu welcomes the wealth of banking experience and international fundraising networks offered by the consortium. Equally, the consortium is pleased to be investing alongside an already strong shareholder base, and to be joining a highly respected and professional board of directors.
Untu was founded in 2009 by Clive Msipha to meet the growing demand for credit from small business and entrepreneurs. Untu offers loans, savings and insurance products from its branches in Harare and in four towns across southern Zimbabwe. Dollarization of the economy in 2008 was followed by significant liquidity constraints, which created opportunities for new financial players to serve healthy businesses in the SME sector. Untu’s low cost, technology driven and flexible business model aims to capitalize on this opportunity.
Untu’s name is derived from the people indigenous to Southern and Eastern Africa, the Bantu. Ubuntu is a value system based on integrity and a belonging to the community, values that are reflected in Untu’s mission to grow in step with the businesses it supports.
Following a ‘lost decade’ that concluded in hyperinflation, 2010 saw a US dollarized Zimbabwe grow at around 9%, twice the IMF forecast. Banking sector deposits have doubled in the last year, but with liquidity still very constrained, under 1% of the population are accessing formal financial services. This is significantly below the sub Saharan Africa credit penetration average of 3%. Having struggled under hyperinflation, when the country adopted the US$ and RSA Rand in February 2009 the microfinance industry suffered another blow – a number of operators had little or no foreign currency, and their balance sheets were wiped out.
In 2010 the Reserve Bank of Zimbabwe introduced new regulation to allow the formation of a Microfinance Bank as part of its commitment to the small business sector. Untu will be utilizing part of its increased equity base to support an application to the Reserve bank for a Microfinance Bank licence.
Clive Msipha is CEO of Untu Holdings. Before founding the company he was with private equity group Actis Capital in London. He was a chartered accountant with PWC for six
years and has an MBA from Said Business School, Oxford. CFO Margaret Chipunza is a chartered accountant formerly with Deloitte and was finance director of ZABG. She
brings nine years of banking experience to the team. Head of Lending Gordon Savanhu has recently joined from First Bank, where he was head of credit and risk.
Untu’s board includes representatives from the legal, insurance, banking, telecommunications and consumer sectors in Zimbabwe. Coco Ferguson, Maris Capital partner, Matthew Hosack of Sub-Sahara Capital, and Jonathan Chenevix-Trench of African Century Limited have all joined the board of Untu.
Commenting on the investment CEO Clive Msipha said: ‘as Untu we are pleased at the completion of this transaction. The company will benefit immensely from the experience and networks that the consortium brings. We believe that we are now better placed to serve our market segments and to play our small part in reviving Zimbabwe’s economy.” Clive Msipha - CEO
Coco Ferguson, partner at Maris Capital said: “over the last 18 months we have been highly impressed by the dedication Clive Msipha and his team have demonstrated in rolling out a low-cost financial services model for the under-banked in Zimbabwe.”
Jonathan Chenevix-Trench, principal at African Century, added: “Untu epitomizes the entrepreneurial skills and commitment being demonstrated by some of the young professionals of Zimbabwe. We are delighted to be participating in the future growth of Untu, and look forward to working with and assisting as necessary this impressive management team.”
Matt Hosack continued: “Sub-Sahara Capital is very excited to be invested in the Untu business. The Untu team are well positioned to grow and develop their market share in this sector and we look forward to helping them become the largest microfinance institution in Zimbabwe, and the region.”
Untu Board Chairman Abraham Maguchu concluded: “we are encouraged by this investment, which is a significant development both for the company and the sector. Zimbabwe is in need of foreign direct investment and this is a positive signal. The company is committed to the development of the economy by adequately servicing small and medium size enterprises. Together with our new investors, we look forward to building a top quality company that will set a standard for the sector “
For more information please contact: Clive Msipha