As part of its strategy to expand across the African continent, 4G Capital has announced the opening of its offices in Kampala as it seeks to provide credit to micro and small enterprises (MSMEs) across the country.
4G Capital has been operating in Kenya since 2013 by providing important financial literacy training blended with unsecured working capital credit.
The company offers unsecured loans to small businesses by using its proprietorial artificial intelligence system to establish correct levels of affordability. Customers receive valuable training in record keeping and inventory systems, financial management and customer relationship skills. As a result, according to a recent survey, 4G Capital’s customers in Kenya recorded an average revenue growth of 82% within one year.
By the end of 2018 the number of 4G Capital customer branches in Kenya reached 70, where over $21m was disbursed over the course of the year. Collection rates have consistently remained above the national average, at 94.08%.
The company recently secured funding from FSD Uganda to conduct important research and support its rollout across the country. The joint research will provide valuable disaggregated insights on the finance gap nationwide that will ensure 4G Capital continues to tailor its solution to support those most in need.
The MSME finance gap in Africa currently stands at $331bn according to the SME Finance Forum, an IFC organisation. These small businesses contribute to over 50% of Africa’s combined GDP and more than 80% of employment. But, despite their critical role, many MSMEs suffer from financial exclusion and limited access to appropriate financial services resulting in inescapable poverty.