MTI Investment provides an interest-bearing cash generating credit facility to Fintech Africa and Mtaji of USD 0.5 million

The credit facility comprises two parts, one with Fintech Africa AB and another Mtaji Wetu Finance Tanzania Ltd, a wholly owned subsidiary of Fintech Africa. MTI currently holds a 13.14 percent ownership stake in Fintech Africa. Under the agreement, MTI will earn a 12.5 percent interest rate on the loan to Fintech Africa and a fixed return of 13.5 percent on the loan with Mtaji Wetu Finance. The borrower Mtaji shall repay the loan no later than April 30^th 2028, whereas the part that is with Fintech Africa expires on April 30^th 2026. The higher return is designed to account for the withholding tax deducted in Tanzania, which can subsequently be claimed in Sweden.

Founded in 2019 by Petter Sandgren, Pontus Engström, and Torbjörn Jacobsson, Fintech Africa AB obtained its Microfinance Tier II non-deposit-taking license in 2022. Since then, it has rapidly expanded its presence in the FinTech sector to provide a platform and solutions for SME financing in East Africa. Mtaji Wetu Finance offers innovative SME financing through B2B customer invoice financing, purchase order financing and payment reminders. This service addresses a challenging yet profitable segment in the underdeveloped Tanzanian B2B market, where Mtaji plays a vital role in developing small companies by ensuring they have goods to sell, even when faced with unexpected expenses like medical bills. This win-win-win solution boosts sales for both the shops and distributors while limiting credit risk for Mtaji. With its lean business model, Mtaji is projected to be profitable in 2023.

Pontus Engström, CEO of MTI Investment SE, expressed his enthusiasm for the investment, stating, "This investment aligns perfectly with our strategic focus on prioritizing investments that generate immediate cash flow. Moreover, the credit facility agreement represents a significant milestone for MTI Investment as we expand our presence in the FinTech space. By providing this facility to a company in which we have complete insight, we can also better oversee the associated risks. We are particularly reassured by the deep involvement of the experienced finance professionals and co-founders, Petter Sandgren and Torbjörn Jacobsson, in Fintech Africa and Mtaji. Their personal extension of loans to Fintech Africa on similar terms as MTI further reinforces our confidence in this venture."