4G Capital, a Kenyan fintech has announced that they have raised $18.5 million in Series C funding which was led by Lightrock.
“We will be building new loan products this year, with longer durations and larger amounts and lend to bigger businesses in the agri-value chain…We are also planning to launch an app that will allow our clients to run their businesses better, have access to our goods and services, and connect them with other providers like FMCG (fast moving consumer goods) distributors. The future of 4G, is a really enriched value proposition for our clients driven by data and AI.
I spent a lot of time in informal markets and across the board, informing my knowledge of what to look for — the energy, the potential and the vibrancy of the informal merchants in Kenya; what they needed was somebody to back them.
I could see how a lot of banks and financial institutions had closed the community branches, off-offshored call centers to emerging markets where labor costs were lower. But banks didn’t know their customers anymore and, therefore, weren’t able to make good lending decisions.
I always felt it was important, particularly dealing with people who can be quite vulnerable, to have a personal interaction touch point, which is then augmented by technology.
It makes us much more resilient in terms of fraud prevention, of money laundering, financing of terrorism and things like that, which, unfortunately, if you’re lending blind, then you don’t necessarily know who’s on the other end.
We know our clients better than anybody else because we are alongside them in the markets. Nonetheless, we’re not running brick-and-mortar conventional micro-finance operations — we have very lightweight teams of three to five people who are incredibly efficient in terms of their productivity.
We want to make sure that we’re growing at the right pace so we have the capital that we need to move to the next phase, and that we’re building the foundations properly to enable that digital scaling.”Wayne Hennessy-Barrett, CEO and Founder, 4G Capital
“Often used to justify the backing of many African companies, ‘financial inclusion’ has not always translated into positive outcomes for customers. What is needed on the continent is investment capital to back companies with the mission of financial empowerment. 4G Capital provides liquidity to the vast market of economically generative businesses – the mobile phone repairers, hairdressers and food sellers – that dot the landscape of Africa.”Shakir Merali, Lightrock’s Partner