Miami-based investment firm Blue Mahoe Capital Partners Inc has signed an agreement to acquire a 40 per cent equity stake in Jamaica-based microfinance company Sprint Financial Services Ltd (SFS).

Welcoming the investment as strategic, SFS founder Christopher Barrett said, “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.”

Apart from offering traditional loans to a cross section of Jamaicans, the virtually operated microfinance company has become a pioneer in providing customised solutions to small businesses through receivables financing and purchase order financing, plus connecting clients to sizeable opportunities in these deals.

This is in an environment where small businesses and other firms struggle to source alternative financing to meet their cash needs and capitalise on scaling their business to the next level.

Blue Mahoe Capital Partners Inc, which is the brainchild of Chairman David Mullings, is a privately held investment firm incorporated in Delaware with a focus on giving investors easy access to the emerging economies of the Caribbean and the quality companies overlooked by too many investors.

The company plans to go public on a major US stock exchange in the near future. It invests in Caribbean companies and others with the potential for heavy exposure to the Caribbean. It currently has a portfolio of public equities and owns a stake in a Jamaica-based technology company.

Mullings, in expressing his commitment to the acquisition, said: “Sprint’s team is forward-thinking and committed to supporting access to finance for small businesses. Fintech has proven to be the way of the future in other countries and Jamaica deserves a modern approach to small business financing. 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.”

The transaction is expected to close by the end of March 2021. Under the agreement, Mullings will join the board alongside Barrett, with Samantha Singh joining as an independent director.

Blue Mahoe Capital has already coordinated meetings between its fintech consultant and the Sprint Financial team with a view to rapidly scale the business without the need to roll out physical branches.

Blue Mahoe Income Fund LLC, a subsidiary of Blue Mahoe Capital, will separately be providing additional capital from the USA for Sprint Financial to on-lend to small and medium-sized businesses in Jamaica and eventually other Caribbean countries. The entity has already provided capital to a Jamaican firm in August 2019 and has commenced funding to Sprint Financial.

Mullings also reiterated certain elements of the income fund and its aim to provide further access for investors. “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,” he 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,” said David Mullings.

Singh added: “I have known David since we worked together in business development at one of the largest financial institutions in the Caribbean and I look forward to sharing ideas to grow the lines of business and ensuring quality corporate governance.”

Blue Mahoe Capital Partners continues to build a portfolio of public Jamaican equities and invest in private companies both via its balance sheet and through funds it manages and plans to launch.