What Is LPO Financing, and Why Are We Investing In It?

"LPO financing" isn't a household term, but it solves a very common problem for Ugandan SMEs: winning a contract is one thing, having the cash to fulfil it is another.

The Gap It Closes

A small supplier wins a Local Purchase Order (LPO) from a government agency, NGO, or large corporate - but needs to buy stock or materials before delivering, and before getting paid. Many capable businesses lose these contracts simply because they can't bridge that gap.

How the Facility Works

The facility advances working capital against a specific, verified purchase order - not against the supplier's general balance sheet. The supplier fulfils the order, delivers to the buyer, and once the buyer pays, the facility is repaid directly from the proceeds, typically within 30 to 90 days.

Why It Fits the Club's Portfolio

Because each advance is underwritten transaction-by-transaction and secured against a verifiable order, and because the cycle is short, this facility gives members exposure to Uganda's SME supply chain without the long illiquidity horizon of some of the club's other holdings.