4G Capital, a Kenyan fintech firm that provides unsecured lending to micro-businesses, has obtained US $18.5 million in Series C funding from Lightrock, a global private equity firm, on 16th March 2022.
The equity funding comes as the fintech prepares to launch a slew of new products and services, including new loans with credit limits of up to US $1,000 and payback terms of up to six months, up from the current ceiling of one month. This is part of its strategy to broaden its client base and increase earnings.
What the founder has to say:
Wayne Hennessy-Barrett, the CEO and creator of 4G Capital, stated that later this year, they’d release an app that would allow their clients to sell on digital marketplaces and link with other digital providers such as delivery services.
“This year, we’ll be developing new loan products with longer terms and more significant amounts, and we’ll be lending to larger enterprises in the agri-value chain. We’re also working on an app to help our clients manage their businesses more efficiently, give them access to our products and services, and connect them with other service providers such as FMCG (fast-moving consumer goods) wholesalers. Barrett stated the future of 4G is a truly improved value proposition for our clients, powered by data and AI.”
What the investors have to say:
The latest funding round takes 4G Capital’s total equity funding raised since 2016 to US $24.5 million. The purchase also has the support of Lightrock’s partner Shakir Merali, who has joined the 4G Capital Board of Directors.
Merali had this to say about the deal:
“While ‘financial inclusion’ has been invoked to justify the backing of numerous African enterprises, it has not always translated into great outcomes for clients. On the continent, investment capital is needed to support firms with a mission of financial empowerment. 4G Capital delivers liquidity to Africa’s large market of economically productive enterprises, such as mobile phone repairs, hairdressers, and food vendors.”
About 4G Capital:
Barrett founded 4G Capital in 2013 after a brief time as a loans manager for a lending firm located in Kenya. This opportunity allowed him to travel across Africa and experience the lending industry.
According to Barrett, since its start, 4G Capital has granted credit worth US $230 million and lent to over 1.75 million micro-businesses, representing a 90 percent year-over-year increase.
The lender has also partnered with several debt investors, including Alphamundi, a Swiss impact investor, Citi Bank, the Ford Foundation, Kenya’s Co-operative Bank, and high-net-worth individuals, to advance them US $3 million in credit in 2020, a facility that the US International Development Finance Corporation guaranteed.
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