D.light, a worldwide supplier of household products and accessible finance for low-income families, unveiled a $30 million securitization arrangement, empowering the acquisition of receivable assets amounting to a potential $125 million.
Obtained from the Eastern and Southern African Trade and Development Bank Group (TDB Group), the funding will enable d.light to expand its current securitized financing arrangement in Tanzania.
This will facilitate the expansion of its cost-effective Pay-Go personal finance service within the country, making it possible for more low-income individuals and households to access the company’s reasonably priced solar-powered household items.
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The company has now raised $490 million in total securitized financing since 2020. The financing facility in Tanzania will be anchored by TDB.
The CEO of d.light, Nick Imudia, stated that the new funding from TDB would provide them with additional resources to extend their reach to more low-income families and households in Tanzania through their Pay-Go business.
He mentioned that they aim to make their services affordable for customers while ensuring the sustainability of their business
D.light’s Secularized Financing and Sustainable Impact
“D.light and our lending partners are long-time pioneers in developing securitized finance as an innovative, scalable financing model for raising equity for off-grid solar that is guaranteed against current and future customer sales.
“We’ve successfully used the securitization model for several years in Kenya and now we and our partners are expanding it to Tanzania.” D.light CEO Nick Imudia said.
While giving his remarks, Michael Awori, CEO of TDB also highlighted the importance of energy access, especially to low income homes.
“Access to energy is critical to the sustainable development of the continent, especially for the most vulnerable off-grid communities.
“As one of the leading renewable energy financiers in the region, we are delighted to extend this second facility to d.light, this time in Tanzania.
“Globally, in 2022 alone the company reached over 1,677,216 people through PAY-GO model, created close to 2,000 jobs, and averted 1,329,371 tons of CO2 and black carbon emissions with solar replacing kerosene lamps.
“This is the kind of impactful track record TDB is keen to support.” Awori mentioned.
Scalable Financing
Imudia further commented that securitization, being a scalable financing method, holds significant importance as a fiscal tool in aiding African nations to realise the United Nations’ Sustainable Development Goals for energy access.
He also mentioned that there are plans for d.light to extend this facility to other significant sub-Saharan African markets throughout 2023.
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In Tanzania, d.light’s financial facility operates by harnessing the payments made by its present and prospective customers for solar products acquired through the Pay-Go service.
These funds are subsequently utilised to secure resources for expanding the company’s operations and increasing its market presence within the country.