Solving Africa’s working capital problem

Africa’s continued growth depends on innovations in access to finance

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In Kenya, where the financing gap for micro, small and medium enterprises is $19 billion, companies like Pezesha, a Nairobi-based fintech, has taken a holistic approach and created a financial marketplace that offers financial lending, literacy courses, credit and debt counseling for the underserved SME market. Pezesha prevents SMEs from overborrowing and falling into indebtedness — a growing trend among Kenya consumers – by assessing applicants’ credit history through its subsidiary Patascore. To create an accurate credit score, Patascore tracks and analyses credit histories for individuals and businesses from more than 150 digital lenders. If an applicant’s loan request is rejected, Pezesha offers financial literacy courses and debt counseling to improve credit scoring. In addition, Pezesha provides value add innovative tools to SMEs to enhance long-term value and retention by helping them to efficiently track their inventory, sales and cash flows. Over time, Pezesha builds up transactional data that develops a strong credit score for SMEs and thus unlocks higher credit limits.  More such innovative approaches are needed to help, not hinder, African SMEs in funding efforts. Read more here