Kenyan fintech Zanifu has secured Ksh. 113 million (USD 1 million) in seed funding to upgrade its platform and expand to the Ugandan and Ghanaian markets. The funding round was led by Saviu Ventures, Launch Africa Ventures, Sayani Investments and various angel investors from Kenya and Nigeria. This latest round brings the total funding so far received by the startup to Ksh. 136 million (USD 1.2 million).
Zanifu was founded in 2017 by Steve Biko and Sebastian Mithika. The startup offers short-term stock financing of up to Ksh. 227,100 (USD 2,000) to MSMEs in Kenya and targets to reach 15,000 FMCG retailers in the next one year. The founders have noted that the company has to date extended 85,000 working capital loans worth over Ksh. 1.5 billion (USD 13 million) to 7,000 businesses in Kenya.
Zanifu works with various manufacturers and distributors to extend credit to MSMEs, with retailers already sourcing products from the startup’s partners qualifying for the financing. Retailers borrow through Zanifu’s loan app, where they upload information that includes historical purchase data. The retailers are then assigned a credit limit, after its algorithm scores them, within six hours after signing up. Retailers have up to a month to pay back the loans which attract an interest rate of 3.5 to 5%.
“We serve FMCG retailers, especially the ones that are too small to access traditional bank finance for their businesses. The only option these MSMEs have has been digital consumer loans, which are not always suitable for them. We are filling a critical gap in providing stock financing, which enables small businesses to grow their turnovers by more than 40%,” said Zanifu co-founder and chief operating officer, Steve Biko.