Today, XSML, the fund manager active in Central & East Africa, announced its fourth investment in Uganda in Telcare Ltd. Telcare, under its brand name Go-Phones, is an operator of mobile money kiosks in Uganda. Telcare has 39 kiosks and four shops located in Kampala through which it provides mobile money transfer services on the mobile platforms of both MTN Uganda and Airtel. In addition the company sells airtime for all mobile network operators as well as mobile phones and phone accessories. In Uganda, there are a total of 21.1 million mobile money users transacting over US$9.5bn in value with currently 693.6 million transactions per annum. There are around 30,000 mobile money agents spread across Uganda. Telcare was started in 2005 by Paul Tumwesigye as a re-seller of airtime for the mobile networks. As mobile money was introduced in Uganda in 2009, Telcare was one of the first companies to promote its use. The company’s kiosks are placed at strategic locations in Kampala to enable easy access for its customers.
The African Rivers Fund (ARF) targets growing, well-managed small and medium-sized enterprises (SMEs) in the Central & East African region covering Uganda, Democratic Republic of Congo (DRC) and Republic of Congo as well as - over time - Burundi. The fund is named after the two most powerful rivers in Africa, the Congo and Nile Rivers, which embody the potential of the Central & East African region.
Jarl Heijstee, Managing Partner at XSML says: “Telcare is one of the leading operators of mobile money kiosks in Uganda. With the increased use of mobile money, these kiosks are becoming a central point in each community, where small businesses and individuals gather to make or receive payments. With our financing of Telcare, the company will be able to reach out further into the country and serve more customers.”
Paul Tumwesigye, CEO of Telcare: “With the financing from XSML we are able to increase our volumes significantly and expand further our network of kiosks. Through this long-term financing we are able to serve thousands of additional new customers. We are excited to have a new long-term partner as the mobile money market is growing fast, not only in Uganda but also in the region.”
XSML believes that sustainable economic development in fast growing markets as the DRC and Uganda can be achieved by encouraging local entrepreneurship. Currently, many opportunities in these countries remain unexploited due to the lack of risk capital and support. By stimulating entrepreneurship, jobs and income are created. The African Rivers Fund continues CASF’s strategy with investments in between US$ 100,000 and US$5mn and has made some 17 investments to date, deploying 50% of capital. Between the two funds XSML has provided technical assistance to some 29 companies to help them improve their operations and skills. Evidence of further impact can be found in various fields, with over 500 jobs created since 2011, over 4,000 additional pupils spread over three private schools and the addition of some 40 hospital beds, an operating theatre and maternity rooms in a clinic in Kinshasa, improving healthcare standards. All three investors in CASF (IFC, FMO and Lundin) were joined by Bio, CDC, DGGF, and Proparco for ARF.
Telcare is a mobile money and airtime re-seller company based in Kampala, Uganda, which has been operating since 2005. Telcare has 39 kiosks and four shops located in Kampala through which it provides mobile money transfer services on the mobile platforms of MTN Uganda and Airtel. In addition the company sells airtime for all mobile network operators as well as mobile phones and phone accessories.
Although international investors show an increasing interest in emerging markets, the demand for finance from small and medium sized enterprises (SMEs) remains largely untapped.
XSML, eXtra Small Medium Large, founded in 2008, bridges this gap by investing in small businesses to help them grow into medium and large enterprises. XSML manages two funds with a focus on frontier markets in Central and East Africa: the Central Africa SME Fund and the African Rivers Fund. Our local teams of 14 investment and operating professionals have experience in emerging and frontier markets in private equity, corporate and development banking and corporate restructuring with offices in Kinshasa (DRC), Kampala (Uganda) and Bangui (CAR).
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T: +31 (0) 85 273 6029
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