On Thursday, March 20, 2025, Baobab, a global financial services group managing a $900 million loan portfolio, finalized its full acquisition of Baobab Nigeria, marking the first exit for Alitheia Capital and Goodwell Investments from their uMunthu Fund. This deal delivered a 3x return on their 2012 investment in the former Microcred Microfinance Bank, contributing to the fund’s stellar 39.3% internal rate of return (IRR). As private capital exits in Africa lag, this milestone underscores the power of patient capital—and Baobab Nigeria’s remarkable growth story. Here’s why this matters for investors and the continent’s financial landscape.
A 3x Exit Amid Africa’s Exit Slump
The uMunthu Fund’s exit from Baobab Nigeria triples its initial investment, a bright spot in a tough year for African private capital. Exits peaked at 82 in 2022 but fell to 43 in 2023—a 48% drop—with only 31 recorded by Q3 2024. Asia, by contrast, saw over $65 billion in exits, dwarfing Africa’s totals and raising fears of lost foreign capital. uMunthu’s 39.3% IRR, a measure of annualized profitability, highlights Baobab Nigeria’s outsized role in bucking this trend, proving Africa can deliver market-rate returns with impact.
Since 2012, Baobab Nigeria has ballooned from one Kaduna branch to 38 across 16 states, growing its customer base from 19,000 to 230,000. Its balance sheet surged 37-fold, and its loan book expanded 43.5-fold, per uMunthu data. Yet, it stays true to small-scale inclusion: average loans are ₦2 million ($1,300), deposits ₦91,000 ($60). “This was a bank operating out of a single room,” said Alitheia’s Tokunboh Ishmael. “Today, it’s a top-three national microfinance bank.”
Patient Capital Pays Off
Alitheia and Goodwell first backed Baobab Nigeria (then Microcred) in 2012 via their GWAMDC fund, doubling down in 2015 through uMunthu—the first private capital in northern Nigeria’s financial sector. Their hands-on approach—local governance, financial structuring, market insights, and networks—fueled this growth. “This exit proves the ability of patient capital to drive both financial and impactful returns,” uMunthu stated, a nod to its 12-year journey. Baobab Group’s full ownership now sets the stage for further Nigerian expansion.
Why It Matters for Africa
Exits signal investability, and Africa’s lag risks ceding ground to Asia or LatAm. Baobab Nigeria’s success—serving underserved MSMEs with a 37x balance sheet leap—shows what’s possible. X posts reflect pride: @NgoziChukwu_ hailed the 3x return, while @TecheconomyNG called it a “meaningful impact” in sub-Saharan Africa. Yet, challenges persist: 2025’s tariff uncertainty under Trump and a 48% exit drop since 2022 test optimism. uMunthu’s eyeing more exits this year, buoyed by uMunthu II’s €57 million first close in 2023, targeting €150 million.
What’s Next for Baobab and uMunthu?
Baobab Nigeria, now a Baobab Group asset, aims to deepen financial inclusion—key as Nigeria’s 230 million population drives demand. For Alitheia and Goodwell, this exit validates their model: impact plus profit. With uMunthu II in its final fundraising phase, they’re pitching this 3x win to new investors. Will Africa’s private capital rebound in 2025? Baobab’s story—and uMunthu’s 39.3% IRR—suggests the tide could turn, one patient bet at a time. Stay tuned for Q1 updates as the continent’s investment saga unfolds.
