Nomba, Synafare Commit N2bn to Solar Financing for SMEs in Nigeria

Three hundred small and medium sized enterprises in Nigeria are set to benefit from N2 billion in financing for solar energy equipment under a new commitment by financial services company Nomba and renewable energy fintech Synafare.

The companies announced the commitment yesterday after more than a year of working together to finance SMEs seeking renewable energy equipment. The new funding will allow the partnership to extend the financing arrangement to a larger number of businesses across Nigeria.

The programme is aimed at businesses that want solar equipment but cannot easily meet the initial cost of purchasing the systems. Synafare said the upfront price of solar products has often been beyond the reach of businesses looking to use renewable energy for their operations.

Under the arrangement, Synafare originates and vets the businesses seeking financing, while Nomba provides direct financing for the purchase of renewable energy equipment.

The companies did not disclose how much each of the 300 SMEs will receive or provide details of the repayment terms.

The N2 billion commitment builds on an existing arrangement through which Nomba has already financed SMEs seeking solar equipment. The companies said the experience from that work has provided the basis for extending the financing to a larger group of businesses.

Solar cost remains a barrier for businesses

Synafare Chief Executive Officer, Tobi Esho, said businesses working with the company want solar equipment for their operations, but the initial purchase cost can prevent them from acquiring it.

“Every business we work with wants solar power equipment to run and grow their operations, but the upfront cost of solar products is often out of reach.”

Esho said the direct financing provided by Nomba had helped businesses overcome that initial financial barrier.

“What Nomba’s direct financing has done, through the businesses we originate and vet, is close that gap. This N2 billion commitment lets us bring that same impact to a much larger group of Nigerian SMEs,” he said.

For Nomba, the financing arrangement is based on lending directly to merchants. Its Chief Executive Officer, Yinka Adewale, said the company had built its credit business around responsible lending.

“At Nomba, we’ve built our credit business on a simple principle: lend responsibly, and lend directly, so the value reaches the merchant without unnecessary friction,” Adewale said.

He said the partnership with Synafare had demonstrated how the approach could be applied to solar energy financing.

“Our partnership with Synafare has shown what that looks like in one of Nigeria’s most important sectors, solar energy access. Committing N2 billion to scale this model is a statement of confidence in Nigerian SMEs and in what we’ve built together with Synafare.”

The companies said the new commitment is intended to extend the financing model to 300 Nigerian SMEs, building on the more than one year of collaboration between Nomba and Synafare on renewable energy equipment financing.