Kenyan fintech Zanifu closed a $1 million round to grow its business and improve its platform, Zanifu offers short-term working capital loans to MSMEs in the Fast Moving Consumer Goods (FMCG) supply chain.
They also plan to enable financial access to over 15,000 FMCG retailers over the next 12 months. The round included Saviu Ventures, which invested in a pre-seed round in early 2020.
Other attendees include Launch Africa Ventures, Sayani Investments and angel investors from Kenya and Nigeria, including the founders and executives of some of Africa’s top tech start-ups.
Founded in 2017 by Steve Biko and Sebastian Mithika, the company was launched in 2018. They have disbursed over 85,000 loans worth over $13 million to over 7,000 MSMEs in Kenya. Zanifu says he is one of the few digital B2B lenders in Kenya specializing in MSME lending.
Similar companies in the African tech ecosystem include Numida in Uganda & Pay Hippopotamus in Nigeria.
Zanifu is working with several manufacturers and distributors to extend credit to these small businesses, with retailers already sourcing products from the startup’s partners eligible for funding. Zanifu has created platforms for manufacturers, distributors, and retailers that guarantee seamless ordering, payment, tracking, and fulfillment.
Retailers borrow through Zanifu’s lending app, where they upload information including historical purchase data.
Retailers are then assigned a credit limit, after its algorithm scores them, within six hours of signing up. Retailers have up to a month to repay the loans, which carry an interest rate of 3.5-5%.
Zanifu, which has a presence across Kenya, is now looking to enter Ghana and Uganda.
“In Kenya, there are about 5 million MSMEs of which only 1 million are officially registered, and the World Bank estimates that there is a financing gap of $20 billion here alone. In sub-Saharan Africa, the theme is amplified with a financing gap of $331 billion and more than 44 million formal MSMEs“said Sebastien.
“We serve FMCG retailers, especially those too small to access traditional bank financing for their businesses. The only option for these MSMEs has been digital consumer loans, which are not always suitable for them. We fill a critical gap in equity financing, enabling small businesses to increase their turnover by more than 40%“, co-founder and CEO, Steve Biko.