Kenyan fintech Asilimia raises $2 million in a pre-seed round, plans to extend loans to MSMEs and expand in East Africa

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Kenya’s economy is driven by informal businesses, which contribute and provide 33.8% of the country’s GDP. 83.4% Data from the country’s Bureau of Statistics shows that of the total employment outside small-scale agriculture. The contribution of these enterprises to the economy of the country is significant, yet they are deprived of traditional banking institutions, making it difficult for them. access financing needs to grow.

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On the other hand, the financial gap left by traditional banking institutions has presented an opportunity for innovation, giving rise to fintechs such as fintech. Percent, The Kenyan startup has been offering a lifeline over the past three years by enabling merchants in Kenya to make mobile money transactions that are devoid of transfer fees through download app,

And now, after securing $2 million in pre-seed funding ($1 million equity and $1 million in debt), the startup is headed for its next phase of growth, with traders looking to provide more relief to this subgroup. This would involve lending to merchants that are often left out and perceived as high risk by the traditional banking sector.

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Received funding from various investors including Fredrik Jung Abbou; Two-time Unicorn founder and Norscan Impact Accelerator, while the debt round featured participation from French Public Investment Bank (BipFrance) and Greentech Capital Partners.

Asilmia is set to use the funds for hiring talent as it looks to fine-tune its technology and expand into another market within East Africa. It will also lend to micro, small and medium-sized enterprises (MSMEs) based on data from its Leja app.

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By offering mobile loans, Aslimia will join a space that has nearly 100 lending apps, including a San Francisco-based branch of Branch International Ltd., and PayPal-backed Tala.

The Digital Lenders Association of Kenya told Nerdshala in a previous interview that it distributes around 25 apps to about $40 million per month. The apps offer collateral-free loans making them attractive to borrowers looking for quick cash and are set to be strictly regulated in Kenya following the enactment of the new regulation.

Nerdshala Co-Founder and CEO, Techwen Mwendwa said, “We have entered a phase where we are exploring ways we can enable merchants to purchase the equipment or products they need to sustain their enterprises. to extend credit.

morgan cabalana, is the other co-founder and chief operating officer of the startup.

In addition to enabling users to conduct mobile money transactions without any fees, Leza also supports bookkeeping, making it easy for merchants to track their revenues and outflows without the need for technical or accounting knowledge. The platform provides valuable data that Asilimia plans to tap to make loans to users.

Mwendwa said Asilmia will build a credit scoring model from the data collected to determine how much will be extended to borrowers.

“We will take into account their b2b transactions, cash flow, sales, liabilities and expenses as all this information is in the app. This is possible because merchants prefer to use our app which, unlike other lending apps, is inventory management. I like to think of our app as an operating system for informal businesses and we are glad that it is a one-stop shop for merchants,” said Mwendwa.

“Another thing that merchants struggle with is airtime top-up. We interact with them daily and understand their pain points, and so we want to give them all the support they need so that they can continue doing business – we will also extend airtime top up credit without any interest , “They said.

Takevne said that a typical user makes about three transactions through the app every day and week by week business is growing 30%. About 27,000 users use its app, with the total transactions made through the Leja app reaching approximately $20 million.

Prior to this, the startup has been done through the prestigious Station F Program Incubation Program and Norscan Impact Accelerator Program in Paris. In 2019, the startup won the Africa Cup at the 2019 SA Innovation Summit, securing a $350,000 investment from Unicorn Group, a Pan-African investment firm. The startup used the financing to fund its growth which included adding Leja to its portfolio.

Beyond East Africa, Aslimia is exploring growth opportunities in other regions, as it continues to bridge the financing gap currently experienced by merchants across the continent.

“MSMEs play a vital role across Africa and making it easier for them to succeed is great for the entire continent,” said Funda Sejgi, Co-Founder and Managing Director, Norscan Impact Accelerator.

“Tekwane and the team have created a solution that works and we are delighted to support them as they drive prosperity in a key sector for the African economy.”

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