Zanifu, a Kenyan fintech that gives Micro, Small, and Medium Enterprises (MSMEs) access to working capital through short-term equity financing, has raised $1 million in seed funding.
The round included participation from Launch Africa Ventures, Sayani Investments, Saviu Ventures, and a number of angel investors from Kenya and Nigeria, bringing the startup’s total fundraising to $1.2 million.
Steve Biko and Sebastian Mithika started Zanifu in 2017 and launched the financing business a year later in 2018. So far, the company has provided 85,000 working capital loans totaling over $13 million to 7,000 Kenyan firms.
“We help FMCG retailers, particularly those who are too small to qualify for typical bank financing.” The only option available to these SMEs has been digital consumer loans, which are not necessarily appropriate. “We’re addressing a vital vacuum in the market by providing stock financing, which allows small firms to increase their turnover by more than 40%,” said Steve Biko, co-founder, and chief operating officer of Zanifu.
Retailers can upload information such as history purchases to Zanifu’s loan app, which the fintech’s algorithm evaluates before issuing a credit limit. Retailers have up to one month to repay the loan after it has been accepted, with an interest rate of 3.5 to 5%.
Zanifu is looking to expand into Ghana and Uganda after a successful funding round.
The funds will be used to expand the startup’s platforms and boost the number of MSMEs it supports by 15,000 FMCG retailers.
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Sote, an African supply chain company, has raised $4 million in a seed extension round.
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