EFTA financed its first lease in 2004, and over the following five years we invested a total of USD 500,000 across 75 investments in small businesses from our first branch in Moshi in Northern Tanzania. This pilot phase proved the business case for our core business.
Given the commercial potential and the large market size that was evident during this initial phase, Equity for Africa agreed to commercialize EFTA to invest in for-profit capital. In November 2010, Equity for Africa was selected as a winner of the Group of 20’s SME Finance Challenge, presented by Barack Obama at the Seoul Summit in South Korea.
This in turn enabled EFTA to raise a USD 5 million impact investment fund called “PEAK II”, which closed in 2012. In 2014 we announced a new USD 5m investment of equity and debt from AgDevCo directly into EFTA. As of 2018, EFTA is continuing with further significant fundraising to support its growing lease portfolio.
The Future of EFTA
EFTA still plans to open more branches in Tanzania to tap into the evident demand for our collateral-free product among the nation’s entrepreneurs.
We have a database of approved equipment suppliers which is given to customers when they attend our seminar. The customer then contacts their preferred equipment suppliers to request pro forma invoices for the equipment they require, which are included in their application. EFTA thoroughly vets all its customers, investing in reliable applications only. We have different supplier tiers. For the suppliers we partner closely with, EFTA seeks to sign ‘Preferred Supplier Agreements’. We aim to work together to actively co-market equipment, producing joint adverts or marketing material.