After securing $1 million in seed funding, the company is going to upgrade its platform and grow the number of micro, small and medium enterprises.
A number of angel investors from Nigeria and Kenya participated in the pre-seed round of the startup. The startup has received over a million dollars in funding so far.
In the next one year, the company is eyeing an additional 15,000 retailers, and it provides short-term stock-financing of up to $2,000 to Micro, Small and Medium-sized businesses in the country.
We serve retailers that are too small to access traditional bank finance. Digital consumer loans are not always suitable for these Micro, Small and Medium-sized Businesses. Steve Biko, co-founder and chief operating officer, said that they are filling a critical gap in stock financing which enables small businesses to grow their turnovers by more than 40%.
The fast moving consumer goods (FMCG) segment has the highest working capital needs within the Micro, Small and Medium Business (MSMEs) segment.
Steve Biko and Sebastian Mithika are co-founding members of the company. The image is called Zanifu.
Biko and Sebastian founded the startup a year ago. The startup said it has extended 85,000 working capital loans worth over $13 million to 7,000 businesses.
According to the World Bank, there is a $20 billion gap in the financing of Micro, Small and Medium Businesses in the country.
The informal businesses in the country contribute 33.8% of the country's GDP and provide 83.4% of employment outside of small-scale agriculture. Access to financing is the main impediment to growth for these businesses. The last few years have seen the introduction of products that are tailored to the financing needs of the Micro, Small and Medium enterprises.
Retailers that already source products from the startup's partners qualify for the financing, which is why Zanifu works with a number of manufacturers and distributors to extend the credit to these small businesses. Payment, tracking and fulfillment can be ensured with the creation of platforms by Zanifu.
Retailers can use the loan app to store historical purchase data. After six hours after signing up, the retailers are assigned a credit limit. The loans have an interest rate of 3.5 to 5% and retailers have up to a month to pay them back.
Zanifu has a presence throughout the country and is now looking at Uganda and Ghana. A regional presence will increase competition for the likes of Uganda's Numida and Nigeria's Payhippo.
In a past interview, Payhippo said it disburses average loans of $1,300 with a minimum of $200, while Numida extends credit of up to $3,500 in less than two hours. Digital lenders are closing the financing gap for small businesses, but at a higher interest rate.
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