Project detail - Lendable MSME Fintech Credit Fund II

Who is our prospective customer?

Lendable MSME Fintech Credit Fund 2 (“LMFCF2” or “the Fund”) is a new debt fund managed by DynoLabs Asset Management Ltd, a wholly-owned subsidiary of Lendable Inc. which has been a long-standing partner of FMO. Lendable is an impact-focused asset manager that provides funding to fintech lenders in emerging markets. LMFCF2 is the successor to Lendable’s first MSME (micro-, small-, and medium-sized enterprise) fintech fund and will continue providing credit to fintechs operating across Africa and Asia while also adding Latin America.

What is our funding objective?

FMO will invest USD 10 million through MASSIF in Class B shares (first-loss tranche) of the Fund. This investment will play a critical anchoring and catalytic role, enabling the Fund to mobilize investments from development finance institutions (DFIs) and commercial investors into more senior tranches. The investment will support a fund structure that blends public and commercial capital to expand access to credit for fintechs targeting underserved MSMEs.

Why do we want to fund this investment?

The Fund will provide senior secured and unsecured loans to a diverse range of socially impactful fintechs such as MSME lenders, payment platforms, and asset-backed financiers that serve low-income and underserved populations. The Fund has strong additionality, as it supports FMO’s fintech strategy by enabling investments into both early-stage and mature fintechs that may be ineligible for direct lending. It qualifies for FMO's 100% Reducing Inequalities label due to its 2X Challenge eligibility for gender impact. Furthermore, the Fund offers technical assistance and incentives to fintech borrowers to improve their ESG and customer protection standards. In addition, FMO’s first-loss participation will be crucial in attracting senior DFI and commercial capital, thereby helping to scale an impactful investment platform.

What is the Environmental and Social categorization rationale?

The Fund has been categorized as E&S Category C. Lendable has developed a strong Environmental and Social Management System (ESMS), co-developed with FMO and BIO, which is applied at the fund level. The ESMS ensures environmental and social (E&S) impacts and consumer protection principles (CPPs) are integrated throughout the investment cycle. The ESMS is managed by a dedicated ESG lead and is aligned with FMO’s best practices. Inherent CPP risks are due to the nature of the Fund's projected fintech clients, which primarily serve MSMEs, including consumers (max 25%), and some operate without regulatory oversight. FMO engaged MFR to review Lendable CPP practices and worked together with Lendable to strengthen CPP safeguards further. Note: This transaction will be signed 8 days prior to the lapse of the 30-day disclosure period required by the FMO Customer Disclosure Policy. A technical problem caused the disclosure to be published late, and the signing date was already set between multiple other lenders.