(Ecofin Agency) - The Kenyan fintech Asante Financial Services, which provides financial solutions to MSMEs in SSA, announced it has secured $7.5 million to expand across the region.
The fundraising was led by Goodwell Investments and saw the participation of Irish family office Forsage Holdings and the Sorenson Impact Foundation. It represents the first tranche of Series A funding, the second tranche of which could be raised in the first quarter of 2022.
The beneficiary plans to strengthen its credit offerings to underserved SMEs in Kenya and Uganda, where it is already active, and enter new markets, including Nigeria and Rwanda. Asante seeks to have a presence in at least 12 countries by 2025.
“With over 650% growth in lending activities since Q1 2021 and a sustained average all-in default rate of 2.5%, Asante is well-positioned to fast track scale and deepen our impact in our operating markets,” Managing Director Chidi Okpala said.
While the strong demographic growth in Nigeria has further motivated Asante, the choice of Rwanda is justified by "the ease of doing business" in this country, and also its recognition in terms of economic competitiveness by several international institutions. The company, which claims to have access to nearly 2 million SMEs with a monthly lending opportunity of more than $200 million for these businesses, had first planned to reach Rwanda in the first quarter of this year, before rescheduling the project.
MSMEs account for 90% of all businesses in emerging markets but face challenges in accessing financing. According to the World Bank, the annual credit gap for SMEs in sub-Saharan Africa is estimated at $330 million. Yet, they contribute 66% of all jobs created and 50% of global GDP, according to data cited by Asante.