Project detail - UNITED LIWWA FOR SME FINANCE LLC

UNITED LIWWA FOR SME FINANCE LLC

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Who is our client

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.

Funding objective

FMO's USD 1 million Debt Facility will be on lent to (underserved) MSMEs in Jordan.

Why we fund this project

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.

Environmental and social 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 client
https://www.liwwa.com/
Region
Asia
Country
Jordan
Sector
Financial Institutions
Signing date
11/23/2020
Total FMO financing
USD 1.00 MLN
Fund
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