Alitheia Capital and Goodwell Investments have announced their successful exit from Baobab Nigeria, marking the first exit of their joint uMunthu Fund.
According to a statement from the investment companies, the exit comes after more than 12 years of investment, initially through the GWAMDC fund and later via the uMunthu Fund.
They noted that the exit is also a testament to the substantial growth and financial stability Baobab Nigeria has achieved and the effectiveness of patient capital in delivering both financial returns and meaningful social impact.
Reasons for investment
According to the investors, investment in Baobab (formerly MicroCred) in 2012 was driven by a shared vision of financial inclusion.
Their continued backing through the uMunthu Fund in 2015 marked the first instance of private capital investment in northern Nigeria’s financial sector, previously dominated by development finance institutions (DFIs).
- Furthermore, they were the first local, on-the-ground investors in Baobab, bringing Nigerian representation to its board for the first time.
- Under their stewardship, Baobab Nigeria underwent a transformation, evolving from a single-unit microfinance institution (MFI) into one of the country’s top-tier national MFIs.
- Alitheia and Goodwell played a critical role in this evolution by providing hands-on governance support, financial structuring advice, and access to vital local networks.
Reflecting on this journey, Alitheia Managing Partner, Tokunboh Ishmael, remarked:
“This was a bank that was operating out of a single room in northern Nigeria when we invested, and today it is a top-three nationally licensed microfinance bank.
“We’ve walked a journey of leadership, governance, and financial and impactful growth, scaling from small beginnings through to the top-tier national microfinance bank that it is today.
“We’re proud of what’s been achieved together and look forward to seeing where the future will take Baobab Nigeria.”
Driving financial inclusion and business growth
At the onset of the investment, an estimated 70% of Nigeria’s population lacked access to financial services, with the situation even more severe in northern Nigeria.
By 2023, government data showed that financial exclusion had dropped to 26% nationwide.
“Since the initial investment in 2012, Baobab has reached 12 times more customers through 7.6 times more bank branches, with the support of 3.2 times more staff.
“All this whilst the average loan and deposit sizes remained small, at NGN 2 million (EUR 1,250) and NGN 91,000 (EUR 58), confirming Baobab’s ongoing commitment to reaching underserved audiences. During this time, the company’s balance sheet increased 37 times and its loan book size increased 43.5 times.
“The financial value of uMunthu’s investment tripled in naira value during the holding period, truly demonstrating what is possible with patient capital,” the statement read.
A new chapter for Baobab Nigeria
The exit of Alitheia and Goodwell marks the beginning of a new phase for Baobab Nigeria, the institution is now fully owned by its international parent company, Baobab Group, which seeks to sustain and expand its impact in Nigeria.
With additional exits anticipated in 2025, Alitheia and Goodwell are now entering the final fundraising phase for their uMunthu II Fund, seeking investors eager to replicate the success and impact demonstrated by Baobab Nigeria.
