A Black-led investment firm Blue Mahoe Capital Partners Inc has acquired a 40% equity stake in Jamaica-based microfinance company Sprint Financial Services Ltd (SFS). SFS is operated virtually, providing loans and customer solutions to Jamaicans.
The monetary value of the acquisition has not been declared but this can be considered significant as many banks and small businesses in Jamaica struggle to raise capital and expand their operations. In a statement, SFS founder Christopher Barrett said, the investment will position the company in a firm place for growth.
“As a digital-first microfinance institution, we are perfectly positioned to leverage the rise of virtual business operations, and this investment, combined with the additional corporate governance, will position us for a future public listing as we grow the business and service customers,” he said.
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The acquisition is expected to be completed by the end of March 2021, according to Jamaica Observer, which first reported the story. Blue Mahoes Capital is led by David Mullings and it is incorporated in Delaware. Mullings is expected to join the board of SFS once the agreement is concluded.
Blue Mahoes focuses on giving investors easy access to the booming economies of the Caribbean and the quality companies and portfolios often overlooked by too many investors, according to the Observer. The company also invests in Caribbean firms and other companies interested in establishing in the Caribbean.
The Observer reports that Blue Mahoes currently has a portfolio of public equities and owns a stake in a Jamaica-based technology company.
“Sprint’s team is forward-thinking and committed to supporting access to finance for small businesses,” Mullings said while expressing his commitment to the acquisition.
“Fintech has proven to be the way of the future in other countries and Jamaica deserves a modern approach to small business financing.”
He continued: “We also bring cheaper capital from our US relationships and intend to pass on those lower interest rates to borrowers, thus contributing positively to job creation and business expansion, especially important after the experience with the pandemic.”
Blue Mahoe Capital, based in Florida, is seeking to rapidly scale up its business without the need to roll out physical branches while a subsidiary of the company, Blue Mahoe Income Fund LLC, will provide additional capital from the USA for Sprint Financial to on-lend to small and medium-sized businesses in Jamaica and other Caribbean countries, according to the Observer.
“The Blue Mahoe Income Fund will be looking for additional investment opportunities in the Caribbean and USA with a view to eventually being open to US retail investors seeking steady risk-adjusted returns,” Mullings said.
“Our investment in Sprint reflects our confidence in the Jamaican economy, the quality of the management team and our firm belief that we in the Jamaican Diaspora can play a direct financing role in growing the economy,” he added.