Kenyan-based solar irrigation company SunCulture is partnering with fintech platform Bridgin to launch a $15m receivables financing structure. The deal is designed to help SunCulture scale its pay-as-you-go solar-powered irrigation systems for smallholder farmers by providing it with upfront capital.
The partnership tackles a persistent challenge for asset-financing companies in emerging markets: growth is often constrained by a lack of working capital. While SunCulture has sold over 50,000 systems by offering credit to farmers, this model ties up cash in long-term receivables, slowing down its ability to purchase new inventory and expand.
This new facility provides a solution by allowing SunCulture to sell its portfolios of farmer loans to a separate financial entity, an off-balance sheet Special Purpose Vehicle (SPV), in exchange for immediate cash.
“Financing plays a key role in the affordability and accessibility of solar-powered irrigation systems to smallholder farming communities, which have historically been underserved by traditional financial providers,” said Martin Andersen, who handles finance strategy at SunCulture. He notes that traditional lenders often lack the processes to adequately assess credit risk for this demographic.
How It Works
The structure, arranged by Bridgin, a receivables financing solution from Masunga, is designed to be more nimble and data-driven than traditional debt facilities.
By integrating directly with SunCulture’s loan management systems, Bridgin’s platform offers real-time monitoring and risk assessment of the loan portfolio’s payment performance. This transparency is intended to attract investors who have been wary of the perceived risk and low data visibility associated with small-ticket rural lending.
The facility is ring-fenced from SunCulture’s main operations and includes credit enhancements to protect investors. According to the companies, it can also accommodate blended finance, mixing commercial and catalytic capital.
“This structure is a blueprint for scaling rural innovation,” said Manon Dubois, Fintech Business Lead at Bridgin. “By designing for the realities of small-ticket, high-impact receivables, we’re making it possible to direct capital where it’s most urgently needed.”
A key advantage for SunCulture, according to Andersen, is that repayments on the facility are timed to match the collections from its end-customers, simplifying capital management. “The long-term nature of the vehicle aims to reduce fundraising and transaction costs over time,” he added.
Scaling Proven Impact
SunCulture’s business model targets a critical need in Kenya, where agriculture is often dependent on increasingly erratic rainfall. The company reports that its solar pumps and drip irrigation systems have enabled farmers to increase yields by up to 300% and reduce water usage by 80%.
To date, SunCulture has issued more than $35m in credit to over 35,000 smallholder farmers, 95% of whom, the company says, were accessing asset financing for the first time.
While the impact is clear, the capital to reach millions more has been the main bottleneck. This receivables financing model offers a pathway to scale by turning future revenues into present-day cash flow.
The approach is part of a growing trend where startups in Africa are turning to specialized debt and fintech platforms to finance their assets, moving beyond traditional venture capital. This model could prove repeatable for other companies in sectors like clean energy, agri-tech, and e-mobility that rely on selling hardware to low-income customers on credit.
“Our mission at Bridgin is to unlock receivables-based financing for companies solving the hardest problems in the hardest places,” said Siten Mandalia, CEO of Masunga. “This deal proves it can be done efficiently, responsibly, and with impact at the centre.”