Loan Originator

Between 2021 and 2024, Tanir demonstrated consistent expansion in scale and profitability, with total revenue rising from €1,381,277 to €2,449,452 and net profit from €109,216 to €602,925, as net margin widened from 7.9% to 24.6%. In 2025 the Company generated €3,061,377 in revenue and €939,106 in net profit, lifting net margin to 30.7%; over January–May 2026 it generated a further €2,899,025 in revenue and €1,060,039 in net profit. This trajectory reflects disciplined cost control, stable unit economics, and a re-lending-driven model, with growth constrained by liquidity rather than demand. Throughout, "revenue" denotes interest and fee income actually paid by borrowers (including late, processing and factoring fees) and excludes loan principal.

Note: "2026 YTD" denotes January–May 2026. Gross profit is stated after direct costs and provisions for expected defaults; operating profit is gross profit less operating expenses; net profit is stated after funding costs and corporate income tax. The asset-finance line launched in late 2025 and is originated and reported within the individual-loan line; it is therefore not shown separately.

Detailed unit economics

(January–May 2026 actuals)

This breakdown confirms that individual borrowers remain the core profitability driver, supported by scale, risk-based pricing and re-lending dynamics that ensure predictable unit economics. The factoring segment, though smaller in loan count, offers larger loan sizes and the lowest default rates, indicating strong growth potential as liquidity constraints are lifted. The asset-finance line combines a materially higher average ticket with a secured, collateralised risk profile (see Section 1); its volumes are consolidated within the individual-loan line, where they are the principal driver of the rising average consumer ticket.

Performance Since the Initial Facility

Tanir completed its first external debt round between October 2025 and May 2026. The facility was drawn in monthly tranches totalling €5,126,275, at a blended rate of approximately 21.6% per annum (individual tranches priced at 22.9% and 16.9%), each on a five-month term with monthly interest and bullet principal at maturity. The Company has established a clear repayment track record: €852,269 of principal has matured and been repaid on schedule to date (as of end-May 2026), with €4,274,006 outstanding. Outstanding principal peaked at €4,274,006 at the end of May 2026, when the facility was fully drawn.

A notable feature of the deployment is its accelerating pace: monthly drawdown rose from roughly €0.25 million in the early months to above €1.0 million by spring 2026 (€1.34 million in May 2026), as the Company put incremental capital to work increasingly quickly. Over the same period (October 2025 – May 2026) the Company originated ≈67,100 loans for a total of ≈€27.5 million disbursed, and recorded a value-weighted portfolio default rate of ≈3.8% of disbursements. The near-term maturity profile is concentrated in the August–October 2026 window and is addressed in the financing plan (see the Growth Plan and Description of the Loan).

Growth Plan of Tanir Credit & Accounting Services Limited

Strategy and scope

Over the financing horizon the plan is Kenya-only and execution-focused: deepen penetration in the B2C consumer book, selectively grow B2B and factoring, and scale the secured asset-finance line for income-generating motorcycles and smartphones without compromising portfolio quality or unit economics. No regional expansion is contemplated in this period; capital and management attention remain concentrated on scaling models that are already operating. The asset-finance line, in particular, extends the Company's original vehicle-finance competence into Kenya's largest informal-employment sector, combining a higher average ticket with a secured, recoverable risk profile.

Demand and deployment capacity

Operational capacity and qualified demand are not the binding constraint; liquidity is. The first external facility demonstrated this directly: monthly deployment rose from roughly €0.25 million in its early months to above €1.0 million by spring 2026 (reaching €1.34 million in May 2026), as the Company put incremental capital to work increasingly quickly across its consumer, business and newly launched asset-finance lines. Online cohorts continue to show lower acquisition cost and stronger repayment behaviour than legacy offline channels, and retention tools that gradually raise credit limits continue to lift customer lifetime value. Historically the Company issued approximately 85,000 loans in 2024 and around 68,000 in the first three quarters of 2025; following the first facility, run-rate origination has risen to approximately 112,000 loans on an annualised basis (January–May 2026). Additional liquidity therefore converts into additional issuance largely mechanically, subject to the Company's credit and collections discipline.

Financing request and deployment

Tanir is seeking a €9,000,000 facility, drawn at €800,000 per month from June 2026 — structured each month as a €500,000 tranche at 22.9% per annum and a €300,000 tranche at 16.9% per annum, a blended cost of approximately 20.7% per annum — with each tranche carrying a seven-month tenor, monthly interest, and bullet principal repayment at maturity, consistent with the structure of the first facility. Eleven monthly drawdowns of €800,000 are followed by a final €200,000 tranche, so the facility is fully drawn over approximately twelve months. Because each tranche revolves on a seven-month cycle, peak outstanding under the facility is approximately €4.8 million at any one time — materially below the €9 million cumulative commitment — and total interest over the program is approximately €0.93 million if each tranche is held to maturity.

The monthly drawdown profile is deliberately calibrated to the deployment run-rate already demonstrated under the first facility — which exceeded €1.0 million per month by spring 2026 — so the requested €800,000 monthly pace sits below proven absorption capacity rather than assuming an untested step-change. Proceeds are directed as follows: primarily to loan-issuance liquidity across all four product lines, with an emphasis on the higher-ticket asset-finance book; to rollover capital tracking the first facility's August–October 2026 maturities as they fall due; to a measured allocation for customer acquisition while acquisition costs remain competitive; and to the operational build-out required to scale asset finance (asset inspection, logbook administration, telematics and insurance). The balance of proceeds, after refinancing maturing first-round tranches, funds incremental issuance and portfolio growth.

Production targets and portfolio quality

Given sufficient liquidity, the Company targets issuance of approximately 193,000 loans (≈€91 million disbursed) over the facility's twelve-month drawdown period (June 2026 – May 2027). The mix remains B2C-led, with the consumer share of disbursements rising from ≈58% (January–May 2026) toward ≈63% in 2027 on the growing asset-finance contribution, while business lending and factoring continue to grow in absolute terms (≈€25.5 million and ≈€10.9 million disbursed over the drawdown period, respectively). Asset-finance volumes are originated within the individual-loan line, where their growing contribution is reflected in the rising average consumer ticket rather than reported as a separate portfolio share. Management aims to raise the consumer repeat-borrowing rate to approximately 80% on average in 2027 (reaching ≈82% by December 2027), from approximately 73% over January–May 2026, and to reduce the consumer default rate toward approximately 4.9% of disbursements (from ≈5.4%), while business and factoring defaults remain at approximately 1.7–1.9% and 0–1% respectively. The growing share of secured, asset-backed lending is expected to improve the blended portfolio default and loss-given-default profile relative to a purely unsecured book. Issuance is scaled in step with realised unit economics and collections performance rather than to a fixed disbursement schedule.

Operating model for scale

Execution rests on established operational processes: re-lending to on-time cohorts; disciplined collections across DPD 1–30, 31–90 and beyond 90 days, with external agencies engaged as needed; daily PAR 30/60/90 and vintage monitoring; antifraud controls covering multi-account behaviour, SIM-swap and identity theft; daily M-Pesa and bank reconciliations; and reserve build-up ahead of tranche maturities through dedicated paybill and bank accounts. The asset-finance line adds a discrete operational layer — dealer relationships, pre-disbursement asset inspection, retention and administration of logbooks (ownership titles), GPS telematics, comprehensive insurance, and a repossession and remarketing capability for defaulted assets. Capacity scales pragmatically through targeted hiring in collections, customer support, fraud and asset operations, proportional to active-borrower and active-asset growth, with SLA adherence tracked throughout.

Financial outlook

The base-case projection below covers the facility period. Interest expense on both the first and the new facility is fully included, as is the servicing of the first facility's bullet maturities. It assumes the new facility is drawn as planned at €800,000 per month at the blended cost described above, unit economics held broadly at current levels with the consumer default rate improving modestly as the secured asset-finance share rises, and stable repeat rates and acquisition cost. The 2026 figures incorporate January–May 2026 actuals.

Note: gross profit is stated after direct costs and provisions for expected defaults; operating profit is gross profit less operating expenses; net profit is stated after funding costs on both facilities and corporate income tax. Asset-finance volumes are consolidated within the individual-loan line.

Under the base case the Company maintains full coverage of interest and principal obligations across both facilities throughout the period.

• KPI thresholds and liquidity safeguards

• Portfolio quality: PAR30 maintained below approximately 8%, PAR60 at or below approximately 5%, with write-off policy enforced and cure rates stable.

• Unit economics: acquisition cost within approximately ±15% of plan; consumer repeat-borrowing rate at or above 70%.

• Liquidity and coverage: a debt-service reserve equivalent to approximately three months of interest across outstanding debt; interest-coverage ratio at or above approximately 2.0x at quarter-end.
  Transparency: monthly vintage analyses, asset-finance recovery statistics, and CRB reporting, with lender dashboards on collections and cash.
  
  

Key risks and mitigations

• Funding cost. The ≈20.7% per annum blended cost is material; it is addressed through KPI-gated drawdown, the debt-service reserve, and retention of earnings.

• Credit-loss volatility. Managed through scorecard adjustments, early-warning triggers and intensified collections; the rising share of secured asset finance structurally lowers blended losses.

• Acquisition-cost inflation. Countered by leaning into referrals and owned channels, strict ROI gating on campaigns, and continuous funnel optimisation.

• Competition in asset finance. Watu, Mogo and M-KOPA are large, well-capitalised incumbents; Tanir's differentiation rests on its CBK licence, M-Pesa rails, existing borrower base for cross-sell, proprietary scoring, and selective dealer partnerships.
  Funding profile. The facility's seven-month tenor is shorter than the 12–24 month amortisation of asset-finance receivables, so the asset-backed book is funded on a rolling basis; this is managed through laddered maturities, reserve build-up, the partially self-amortising nature of asset-finance instalments, and lower duration risk for the lender, with longer-tenor funding to be pursued as the asset book matures.

• Currency. Hard-currency funding against shilling-denominated revenue is monitored, with pricing discipline and reserve buffers, and hedging considered as the book scales.

Conclusion

The growth plan is constrained primarily by liquidity rather than by demand, and the requested facility is structured to address that constraint. The first facility provides relevant evidence on execution: it was drawn down at an accelerating pace and its matured tranches have been repaid on schedule to date, indicating that the Company can deploy incremental capital and meet its obligations. The requested €9,000,000 facility is calibrated below the deployment run-rate already observed rather than to an untested increase in scale, and the rising share of secured, asset-backed lending should, if realised, improve the blended credit profile relative to the Company's historically unsecured book.

These conclusions are subject to several qualifications. The track record under external debt is short, covering a single facility drawn from late 2025; the asset-finance line is at an early stage and its standalone unit economics are not separately reported, being consolidated within the individual-loan line; the segment is contested by larger, better-capitalised incumbents; and the first facility's principal repayments are concentrated in the August–October 2026 window, part of which the new facility is intended to refinance. On balance, execution to date and the calibration of the request are consistent with the plan, provided unit economics and collections performance hold as the portfolio scales and the near-term maturities are managed.

Description of the Loan

Facility summary

Tanir is seeking a €9,000,000 facility to scale lending capacity in Kenya across its consumer, business, factoring and asset-finance lines. Disbursement follows a monthly schedule of €800,000 per month, beginning in June 2026 and continuing for eleven months, with a final €200,000 tranche in the twelfth month, until the €9,000,000 commitment is fully drawn — approximately twelve months at this pace. Each monthly drawdown of €800,000 is structured as two tranches — €500,000 at 22.9% per annum and €300,000 at 16.9% per annum, a blended cost of approximately 20.7% per annum — each carrying a fixed seven-month tenor, with interest paid monthly and principal repaid in a single bullet payment at the end of the tranche's term. This produces a laddered maturity profile in which each tranche revolves on a seven-month cycle, with borrower repayments recycled into new lending within that cycle; the facility is fully repaid by November 2027.

Loan terms

• Total facility: €9,000,000.

• Drawdown: €800,000 per month for eleven months, plus a final €200,000 tranche (fully drawn in ≈12 months).

• Interest rate: 22.9% per annum on €500,000 and 16.9% per annum on €300,000 of each monthly drawdown — approximately 20.7% per annum blended, fixed.

• Tenor: each tranche matures seven months from its drawdown.

• Repayment: monthly interest; bullet principal at tranche maturity.

• Peak outstanding: approximately €4,800,000 at any one time

Tranche structure

Note: figures assume each tranche is held to its seven-month maturity. Monthly interest is calculated on the outstanding principal of each tranche at its contractual rate; the program total reflects the sum of all drawdowns made to reach the €9,000,000 commitment.

Total repayment obligations

Use of proceeds

The facility is dedicated to expanding lending capacity, with proceeds directed as follows:

• Loan-issuance liquidity across all four product lines, with emphasis on the higher-ticket asset-finance book, enabling faster origination and higher portfolio turnover.

• Rollover capital tracking the first facility's August–October 2026 maturities as they fall due, so that maturing principal is refinanced rather than withdrawn from the working portfolio.

• A measured allocation to customer acquisition while acquisition costs remain competitive.

• Operational build-out required to scale asset finance: dealer relationships, pre-disbursement asset inspection, logbook administration, GPS telematics, and insurance.

Each tranche is expected to revolve multiple times within its seven-month cycle as borrower repayments are recycled into new loans. After refinancing maturing first-round tranches, the balance of proceeds funds incremental issuance and portfolio growth. The Company will build liquidity reserves ahead of each maturity to ensure timely bullet settlements.

Repayment mechanics and covenants

Interest is paid monthly on the outstanding principal of each tranche, and principal is repaid in full at the tranche's seven-month maturity. To mitigate credit and operational risk, the facility includes the following safeguards:

• Segregated paybill and bank accounts for disbursements and collections.

• A minimum cash reserve equal to three months of interest on outstanding debt.

• No dividends or bonuses during the term without lender consent.

• Lender monitoring rights, including daily collections visibility and assignment of receivables upon default.

• Security over financed assets, including retention of logbooks (ownership titles), active GPS telematics, and maintenance of comprehensive insurance on the asset-finance book.

Relationship to the existing facility

The new facility runs alongside the first facility drawn between October 2025 and May 2026. The first facility's principal repayments are concentrated in the August–October 2026 window (approximately €3.55 million, ≈83% of its outstanding balance as of end-May 2026), and a portion of the new facility's drawdown over that period is allocated to refinancing those maturities as they fall due. Combined outstanding across the two facilities peaks at approximately €5.15 million in July 2026, before the first facility's maturities are repaid; thereafter, the new facility's seven-month tranches establish a laddered maturity profile of their own, with peak outstanding of approximately €4.8 million managed through the monthly drawdown pace, reserve accumulation ahead of maturities, and the revolving nature of the loan book.

Rationale

The facility addresses the liquidity constraint identified in the growth plan and is structured consistently with the first facility, which the Company has serviced and repaid on schedule to date. While the ≈20.7% per annum blended cost is material, it is mitigated by risk-based pricing, the revolving deployment of capital across multiple lending cycles, the build-up of reserves ahead of bullet maturities, and the lower duration risk associated with a seven-month tenor. The growing share of secured asset-finance lending further supports the facility's risk profile relative to the Company's historically unsecured book.