A Nigerian fintech company previously known for providing SME loans has rebranded as Rivy and secured $4 million in funding to focus on its clean energy financing business. The funding, split evenly between debt and equity, will support Rivy in expanding its clean energy financing solutions for businesses beyond Nigeria.
Rivy’s equity round was co-led by EchoVC, a Nigerian venture capital firm, and Shell’s All On, an impact investment organization focusing on climate. Debt financing was provided by local debt providers.
Rivy’s shift towards clean energy financing reflects a trend among African fintech companies diversifying their services to address broader challenges. The company operates a dual marketplace connecting solar vendors and installers with businesses, offering loans to facilitate the adoption of solar systems.
The CEO of Rivy highlighted that the company’s move towards clean energy financing was motivated by the frequent lack of electricity access among small businesses seeking loans. By offering asset financing solutions, Rivy enables businesses to acquire solar systems and spread the costs over time.
Despite the expansion into clean energy financing, Rivy maintains a strong focus on credit risk management, with a non-performing loan ratio below 1%. The company has observed significant demand for its services, particularly due to the high costs associated with traditional electricity sources.
Rivy’s loan terms are tailored to electricity demand, logistics, and service charges, with interest rates starting at 12% for a three-month term. The company requires an initial deposit of at least 30% of the loan amount for businesses to access financing.
While Rivy primarily targets businesses, it also provides financing for micro-grids and has expanded to include consumer financing. The company opted for a mix of debt and equity funding to support its lending model and plans to further establish its presence in Nigeria while considering expansion into other markets.
Rivy aims to continue its mission of providing clean energy solutions to households and businesses, positioning itself as a key player in the sector.