Alitheia Capital and Goodwell Investments have recently announced the successful exit of their investment in Baobab Nigeria, marking a significant milestone for their joint uMunthu Fund. Baobab Nigeria, a financial institution dedicated to providing inclusive banking services to individuals and MSMEs in underserved areas of sub-Saharan Africa, has shown remarkable growth over the past 12 years.
The partnership between Alitheia Capital and Goodwell Investments began with an initial investment in Baobab Nigeria, formerly known as MicroCred, in 2012. This investment continued through the uMunthu Fund in 2015, supporting the bank’s expansion and evolution. From its humble beginnings in Kaduna state, Baobab Nigeria has grown to serve 230,000 customers across 16 Nigerian states, operating through a network of 38 branches. This growth is a significant increase from the initial five branches and 19,000 customers.
Throughout the years, Baobab Nigeria has remained committed to its inclusive customer base, with small average loan and deposit sizes despite its rapid expansion. The uMunthu Fund played a crucial role in professionalizing the bank, enhancing governance, and facilitating its transition from a microfinance institution to one of Nigeria’s top national MFIs.
The investment by Alitheia and Goodwell in Baobab marked a pioneering effort as they were the first local investors on the company’s board and the first private capital investors in northern Nigeria, a region previously dominated by Development Finance Institutions (DFIs). Their proactive support included advising on financial structuring, governance improvements, and connecting Baobab to local networks and business expertise.
Baobab Nigeria has played a significant role in closing the financial inclusion gap in Nigeria, particularly in northern regions where up to 70% of the population initially lacked access to financial services. By 2023, government statistics reported that 26% of Nigerians still lacked access to financial services, showcasing a substantial improvement. Baobab’s focus on serving underserved populations is evident in its ability to reach 12 times more customers, with 7.6 times more branches, and 3.2 times more staff while maintaining small average loan sizes.
The financial success of uMunthu’s investment is evident, with the fund’s value tripling in Naira terms, highlighting the impact of patient capital in emerging markets. The exit from Baobab Nigeria marks a new chapter as the company transitions to full ownership under the international Baobab Group. The Nigerian team plans to continue its mission of serving the underserved, making a positive impact on businesses and communities across the country.
“We are incredibly proud of Baobab’s transformation from a single-room operation in northern Nigeria to one of the top three nationally licensed microfinance banks in the country,” said Tokunboh Ishmael, Managing Partner at Alitheia Capital. “Together, we’ve built a bank that stands as a testament to leadership, governance, and impactful financial growth.”
Looking ahead, Alitheia and Goodwell remain committed to their hands-on approach with the uMunthu portfolio and are optimistic about further exits in 2025. The uMunthu II Fund is in its final fundraising phase, actively seeking investors who want to be part of the next success story inspired by Baobab Nigeria’s impact and growth.
This successful exit from Baobab Nigeria signifies a significant achievement for Alitheia Capital, Goodwell Investments, and the uMunthu Fund, showcasing the power of strategic investments in driving positive change and financial inclusion in emerging markets.
