Alitheia Capital and Goodwell Investments have exited Baobab Nigeria after more than 12 years, marking the first exit from their uMunthu Fund. This exit illustrates Baobab’s growth as a leading microfinance institution and highlights the effectiveness of their investment in enhancing financial inclusion. Baobab is now fully owned by its parent company, Baobab Group, as it looks toward future expansion and impact.
Alitheia Capital and Goodwell Investments have successfully exited Baobab Nigeria, marking a significant milestone as it is the first exit from their collaborative uMunthu Fund. The exit follows over 12 years of investment, initially through the GWAMDC fund and subsequently via the uMunthu Fund. This achievement highlights the substantial growth and financial stability of Baobab Nigeria, as well as the effectiveness of patient capital in generating both financial returns and positive social impact.
The decision to invest in Baobab (formerly MicroCred) in 2012 stemmed from a mutual commitment to enhancing financial inclusion. Their ongoing support via the uMunthu Fund in 2015 represented the inaugural instance of private capital investment in northern Nigeria’s financial sector, which had previously been dominated by development finance institutions (DFIs). Notably, Alitheia and Goodwell were the first local investors to join Baobab’s board, introducing Nigerian representation for the first time.
Under the guidance of Alitheia and Goodwell, Baobab Nigeria transformed from a single-unit microfinance institution (MFI) into one of the leading national MFIs in the country. They provided essential governance support, financial structuring advice, and access to critical local networks, driving the organization’s growth. Reflecting on the journey, Tokunboh Ishmael, Managing Partner at Alitheia, stated that Baobab’s transformation from operating out of a single room in northern Nigeria to becoming a top-tier microfinance bank is a source of great pride.
Initially, about 70% of Nigeria’s population lacked access to financial services, particularly in northern regions. By 2023, financial exclusion decreased to 26% nationally, showcasing the impact of Baobab’s efforts. Since the initial investment in 2012, the organization has significantly expanded its reach, serving twelve times more customers while growing its number of branches and staff. Despite the small average loan and deposit sizes, Baobab’s balance sheet and loan book have experienced exponential growth during this time, confirming a steadfast commitment to serving underserved communities.
The exit of Alitheia and Goodwell signals a new chapter for Baobab Nigeria, which is now entirely owned by its parent company, Baobab Group. This change facilitates the continuation and expansion of its influence within Nigeria. Anticipating further exits in 2025, Alitheia and Goodwell are currently focused on finalizing fundraising for their uMunthu II Fund, targeting investors who are eager to replicate the success demonstrated by Baobab Nigeria.
Alitheia Capital and Goodwell Investments’ exit from Baobab Nigeria, after over a decade of investment, underscores the significant progress made in financial inclusion and the effectiveness of patient capital. Their investment catalyzed Baobab’s transformation into a leading microfinance institution, drastically improving access to financial services in previously underserved communities. Moving forward, Baobab Group will continue to build on this success as Alitheia and Goodwell prepare for the next phase of their investment strategy.
Original Source: nairametrics.com
