Zambia-based Rent To Own (RTO), a business that provides productive-use assets to rural SMEs, has secured a EURO 1 Mn (USD 1,121,849) investment from the Seed Capital and Business Development facility of the Dutch Good Growth Fund (DGGF).
According to a piece of information sent to WeeTracker, the investment will be used primarily as working capital to double the company’s portfolio or rural Zambian entrepreneurs. Building upon convertible notes, Rent To Own provides high-impact assets to rural entrepreneurs and smallholder farmers in Zambia.
RTO raised USD 1.05 Mn last year in a seed round led by AHL Venture Partners. Due to a significant increment in the company’s investment, the investors were joined by two other firms – Small Foundation and Jordan Engineering.
Offering a unique “all-in-one” package of uncollateralized financing, delivery, installation, and equipment training, the company empowers its clients to grow their businesses and improve their quality of life.
RTO’s flexible, tech-enabled platform also provides a route-to-market for equipment suppliers and supports the rapid adoption of innovative assets, such as solar-powered irrigation pumps.
RTO, founded in 2010, claims to have financed over 7000 high-impact assets in Zambia and has achieved a 96 percent repayment rate since inception. Its purpose at RTO is to unlock the potential of rural entrepreneurs to improve the quality of life of their families and communities.
“We are extremely excited by the opportunity provided by DGGF to continue to focus on this mission and rapidly grow our loan book despite the harsh economic conditions we are currently experiencing in Zambia”, says Jeffrey Scheidegger, CEO.
DGGF, managed by Triple Jump BV is a funds investment initiative from the Dutch Ministry of Foreign Affairs that invests in funds and financial intermediaries that provide capital to SMEs. Through its seed investment in RTO, DGGF will help support rural SMEs to improve livelihoods and develop sustainable income sources.
According to an official disclosure, RTO engaged Open Capital Advisors, a management consulting and financial advisory firm based in Africa, to provide investment-readiness and transaction advisory support for this deal.