Regional fintech secures Sh200m for lending to SMEs

Financial technology firm 4G Capital has raised Sh200 million in funding for Small and Medium Enterprises (SMEs) in Kenya and Uganda.

4G Capital says the funding from private equity firm Ceniarth LLC brings the capital raised for SME financing to Sh400 million.

The cash will aid in the expansion of operations in Kenya and Uganda.

“4G Capital has surpassed all key performance targets for 2019, and Ceniarth’s investment will help us meet the demands of growing customer base and continue our positive impact into the future,” CEO and Founder of 4G Capital Wayne Hennessy-Barrett said in a statement yesterday.

“The rapid expansion of mobile and technology-based financial services in emerging markets has the potential to provide critical capital to individuals previously excluded from the financial system,” said Ceniarth Founder Diane Isenberg.

Repayment rates

4G Capital has since 2013 lent over 750,000 loans valued at Sh9 billion - the bulk of them composed of micro, small and medium enterprises in Kenya. “Over the last 12 months, revenue has increased by 97 per cent as 4G Capital supported over 60,000 MSMEs,” says the firm.

“By the end of this year, 4G Capital will have lent Sh4 billion, surpassing all expectations. Repayment rates remain above national averages, at over 94 per cent (without refinancing).”

The firm says the cash injection will expand its network across Kenya and Uganda, with an additional 24 branches across Kenya and 34 across Uganda. This brings the total network to 150 branches. Earlier this year, mobile lender Branch announced raising Sh17 billion in debt and equity financing to expand its loan portfolio.

Last year, Tala announced it had raised Sh5 billion in its third round of investment, bringing its total financing to Sh10.5 billion.