United Liwwa for SME Financing LLC
Status: Completed investmentWhy disclosure?
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In case of questions
In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
FMO's client United Liwwa for SME Finance is a technology enabled SME lending company with proprietary marketplace, established in 2015 and operational in Jordan. Liwwa fulfils the working capital need of un(der)served SMEs by funding the purchase of trade goods and fixed assets based on bank statements, discounting of invoices and working capital based on proven sales via Point of Sales. Through the marketplace, retail ‘investors’ can participate in higher yielding, unsecured SME loans with historic returns of ~9-16%. Liwwa blends marketplace funding with financing from partner banks. It retains a minimum 10% share in each SME loan as ‘skin in the game’. FMO is shareholder of Liwwa Inc., the parent company.
What is our funding objective?
FMO's USD 1 million Debt Facility will be on lent to (underserved) MSMEs in Jordan.
Why do we fund this investment?
Liwwa has an unique brand in Jordan and strong competitive advantages that allow replicating the platform in the MENA region (i.e. excellent customer experience, technology-driven loan process and Sharia compliant loan product). Furthermore, there is a clear defined client segment and proof of demand: Jordanian small businesses are un(der)served, but sophisticated enough for an automated loan process and sizable enough to scale the business. Liwwa has a strong management team that allows for innovation and learning, while executing on organizational development. Co-founder and CEO Ahmed Moore has built strong relations in the Jordan banking and business community. Finally, the client received early-stage investments by reputable, local VC funds with MENA footprint, which signals confidence in the Liwwa’s business model and management team.
What is the Environmental and Social categorization rationale?
Liwwa is a B risk with no exposure to high risk E&S sectors. Liwwa has no ESMS, but has a very similar exclusion list as FMO has in place. From a human rights perspective: defaulting on promissory notes or checks can lead to imprisonment in Jordan. Essentially, a creditor has the option to seize assets, offer settlement or request (temporary) imprisonment. Liwwa has once been involved in a case that led to imprisonment, which resulted from fraud by the borrower.
- Website customer/investment
- https://www.liwwa.com/
- Region
- Asia
- Country
- Jordan
- Sector
- Financial Institutions
- Publication date
- 12/27/2019
- Effective date
- 11/23/2020
- End date
- 9/18/2023
- Total FMO financing
- USD 1.00 MLN
- Funding
- MASSIF
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B