Nail Fungus is caused by three types of fungi: dermatophytes, yeasts, and non-dermatophyte moulds. Fungi are simple parasitic plant organisms that do not need sunlight to grow. Toenails are particularly susceptible as fungi prefer dark damp places. Swimming pools, changing rooms and showers typically harbour these types of fungi. Chronic diseases such as diabetes, problems with the circulatory system, immune deficiency disease as well as a history of athlete's foot or excess perspiration also increase the chances of developing nail fungus.