Asante And Solv Join Hands To Provide Credit To MSMEs

By Jane Muia / Published October 31, 2022 | 2:19 pm

KEY POINTS

The partnership will help bridge the gap for many businesses that face unique challenges in obtaining formal and competitively priced credit.

Asante Financial Services (EA) Limited has partnered with Solv Kenya to provide affordable credits to over 10 million MSMEs in the country.

The partnership will help bridge the gap for many businesses that face unique challenges in obtaining formal and competitively priced credit. It will also help in reducing the financial burden on MSMEs, thereby promoting growth, jobs, and sustainability while boosting the Kenyan economy.

“We are excited to be a part of this partnership and look forward to working with Solv Kenya to empower Kenyan businesses by unlocking their potential. Asante FSG is driven by its passion to see the growth of the MSME sector in Africa. It is through strategic partnerships such as this one with SOLV Kenya that we can extend our reach to the MSME and build them through affordable credit” Asante Financial Services East Africa CEO George Maingi, said.

Solv Kenya is a Business-to-Business (B2B) digital platform that empowers MSMEs through access to affordable credit and is backed by SC Ventures, Standard Chartered’s Innovation fintech investment, and ventures arm.

Asante Financial Services EA Limited has committed a credit line of over 1 billion shillings for the pilot phase of this partnership which targets to sign up 10,000 businesses by the end of this year.

Since its launch in 2018, Asante Financial Services has been supporting MSMEs in Kenya through the provision of financial services which has been the biggest challenge hindering MSMEs’ growth. MSMEs play a significant role in a country’s economy, especially in emerging markets where they represent 90 percent of all businesses, 66 percent of all jobs created, and 50 percent of the world’s GDP.

Sadly, data from the World Bank indicate that the annual SME credit gap in Sub-Saharan Africa is about US$330 billion. This is because lenders often neglect MSMEs due to different factors including the high cost of customer acquisition and due diligence, insufficient data availability for accurate credit assessments, and lack of collateral.

Also, uncertain customer lifetime values and the high costs of distribution and servicing are among the barriers for MSMEs to access credit. Asante has however solved most of these problems by rolling out various products where MSMEs can opt-in and access the amount of credit they need for their expansion.

A good example of such a product is Bloom Loan, born out of a partnership with Safaricom. Bloom loan is tailor-made for Safaricom Lipa Na M-PESA merchants, making it easy to access credit of up to 200,000 Kenyan shillings.

The group also has a loan product known as Shujaa Business Loan which is specifically tailored for Jumia Kenya vendors to help scale their online stores. All active Jumia Kenya vendors are eligible to get this product to help them invest in their businesses

Asante’s other financial products for MSMEs include partnerships to empower eCommerce merchants, travel agents, and smartphone financing.