Kenya’s economy is driven by informal enterprises, which contribute 33.8% of GDP and employ 83.4% of the country’s workforce outside of small-scale agriculture, according to data from the country statistics office.
The contribution of these companies to the country’s economy is significant, but they are under-represented by traditional banking institutions, which makes it difficult for them to obtain the capital necessary for their development.
The financial sector has always been dominated by large-scale entities, leaving space for innovation for the emergence of fintechs like Asilimia. The Kenyan company has provided a lifeline for merchants in Kenya by enabling them to conduct free mobile money transactions through its Leja app for the past three years.
Now that it has $ 2 million in seed funding ($ 1 million in equity and $ 1 million in debt), the company will move into its next phase of development, in which it will bring more relief. to traders by offering them loans.
The new round of funding came from notable investors, including Fredrik Jung Abbou, two-time founder of the unicorn and Norrsken Impact Accelerator, as well as the French public investment bank (Bpifrance) and GreenTec Capital Partners.
Asilimia will use the money to hire staff to refine its technology and expand into another East African market. It will also provide loans to small and medium-sized businesses according to data from its Leja app.
“We have entered a phase where we are exploring ways to extend much needed credit enabling traders to purchase equipment or products to support their businesses,” Asilimia co-founder and CEO Tekwane Mwendwa.
The other co-founder and COO of Asilimia is Morgane Kablan, who was previously Director of Business Development for Branch by Branch International Ltd, based in San Francisco. Tala, a PayPal-backed start-up that offers consumer loans, is among the competition.
According to the Digital Lenders Association of Kenya, around $ 40 million is distributed each month by 25 apps it promotes. The apps offer unsecured loans, which appeal to borrowers looking for quick cash and will be tightly regulated in Kenya due to the new legislation.
Leja offers users the ability to conduct mobile money transactions at no cost, in addition to accounting support, making it easier for merchants to track their income and expenses without having technical or accounting expertise. The platform provides useful information that Asilimia intends to use to offer loans to its clients.
Due to the pressing financial challenges faced by members, Asilimia will create credit score models from the data obtained to determine how much money would be given to borrowers.
“We will take into account their b2b transactions, cash flow, sales, debts and expenses because all of that information is in the app. This is possible because traders love to use our app which unlike other loan apps has inventory management. I like to think of our app as the operating system for informal businesses and we are happy that it is a one-stop-shop for traders, ”Mwendwa said.
“Another thing that traders struggle with is airtime reloading. We interact with them on a daily basis and understand their weak points, and therefore we want to give them all the support they need so that they can continue to do business – we will also extend the interest-free recharge credit ”, he added. he declares.
The app, according to Tekwane, is used by a typical user every day and has seen a 30% weekly growth rate. Its apps are used by around 27,000 people with overall transactions totaling around $ 20 million through the Leja app.
The company was founded in 2016 by Christian Richard, co-founder of Cointreau. Previously, he had gone through the prestigious Station F incubation program in Paris and the Norrsken Impact Accelerator initiative.
In 2019, the startup won the Africa Cup at the 2019 South Africa Innovation Summit, winning a $ 350,000 investment from Unicorn Group, a pan-African investment firm. The funds were used to fuel development, including adding Leja to her portfolio.
Asilimia is also looking to expand into areas outside of East Africa, as it aims to continue to fill the capital gap that many traders on the continent are currently facing.
“MSMEs play a vital role across Africa and facilitating their success is tremendous for the continent as a whole,” said Funda Sezgi, Co-Founder and CEO of Norrsken Impact Accelerator.
“Tekwane and his team have come up with a solution that works and we are delighted to support them as they contribute to prosperity in a key sector for the African economy. “
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