Kenya: Asante to scale credit offerings with new funding

Kenya-based fintech startup Asante closes $7.5 million Series A investment to help scale its credit offerings to a host of African countries

Inclusion Times
Inclusion Times

Kenya-based digital lender - Asante has closed a $7.5 million Series A round and plans to explore new markets within Africa to achieve its goal in 2025 - have a presence in 12 African markets.

Leading the round was Goodwell investment, with participation by other investors, including Sorenson Impact Foundation and Forsage Holdings. The Series A investment enables Asante to expand its credit offerings to the underserved segment of MSMEs in Kenya and Uganda and expand to Nigeria and Rwanda.

According to Bitta Wycliffe, Senior Investment Associate at  Goodwell Investments, "MSMEs—particularly those in the informal sector—are being held back by a lack of responsible lending from traditional financial services providers who are unable to run accurate credit checks and offer profitable loans to this segment of the market. Asante has solved these problems through its innovative digital platform and ecosystem approach."

"The company’s success to date is proof that the model works, and we are very confident that the business will scale quickly and successfully with this round of funding. This is the 20th investment by Goodwell Investments’ uMunthu fund, of which 50% is invested in financial inclusion. Asante is a perfect fit and a great addition to our portfolio of other socially responsible financial services providers," he added.

MSMEs are the core of most economies in the world, given their size. According to the world bank, MSMEs account for 90% of all businesses, 66% of all jobs created, and 50% of the world's GDP. However, limited access to financing means that MSMEs might not be achieving their full potential.

According to the International Finance Corporation (IFC) estimates, 65 million firms, or 40% of formal micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of $5.2 trillion every year. Finextra has a perfect explanation for why this gap exists. This includes; the high cost of customer acquisition and due diligence, insufficient data availability for accurate credit assessments, lack of collaterals, uncertain customer lifetime values, and the high costs of distribution and servicing.

This gap creates an opportunity for players in the financial space, and one firm looking to take advantage of this opportunity is Asante. However, Asante approaches this opportunity differently thanks to its ecosystem-based digital lending platform that uses alternative data and a proprietary AI loan decisioning management system to approve loans to MSMEs.

The company works directly with ecosystem channel partners to collect conventional and non-conventional MSME data with the clients' prior consent.
Its channel partners include Africa's largest telcos, mobile-based marketplaces, airlines, retailers, payment processors, insurance companies, smartphone phone OEMs, and large FMCGs.

This significantly reduces the cost of customer acquisition and due diligence while providing sufficient alternative data for credit underwriting.

“We are delighted to welcome our new investors including Goodwell, Sorenson and Forsage in our inaugural institutional fundraise. Together, we will advance access to finance, and financial independence and wellbeing for the millions of small businesses on the continent,” said Chidi Okpala, Founding CEO of Asante.

Asante has executed over 16 strategic corporate channel partnerships, giving Asante direct access to 2m MSMEs with a monthly lending opportunity above US$200 million. Incorporated in Mauritius, Asante has grown exponentially since it commenced operations in 2018 and now operates in Kenya and Uganda.

Kenya in focus:

GDP: $98.843 in 2020 compared to $95.403 in 2019

Population: 53,771,300 in 2020 compared to 52,573,967 in 2019

GDP per capita: $1,838 in 2020 compared to $1,816 in 2019

NewsFinancial inclusionDigital inclusion