4G Capital on growth of SMEs through lending model

4G Capital, a leading fintech company in Africa, has been at the forefront of providing innovative lending solutions to small and medium-sized enterprises (SMEs). By combining capital infusion with enterprise training, the company has successfully bridged the financing gap for businesses operating in the continent's informal sector. In a recent interview with CNBC Africa, Roseanne Masila, the Chief Operations Officer at 4G Capital, shed light on the company's unique approach to driving business growth across emerging markets. Since its establishment in 2013, 4G Capital has been dedicated to addressing the pressing financial needs of African entrepreneurs. With the macroeconomic landscape exerting additional pressure on SMEs, the demand for credit has continued to rise steadily. For instance, in Kenya alone, the number of borrowers has increased from 7.5 million in 2019 to 11.4 million in 2023, highlighting the significant financial gap that exists in the market. Masila emphasized that 4G Capital's tailored solutions cater to various segments within the MSME space, providing businesses with the necessary financial support and knowledge to foster growth. Each loan is accompanied by customized business training sessions, blending human customer service with digital accessibility. This comprehensive approach equips entrepreneurs with the skills and resources needed to succeed in a competitive business environment. In terms of measuring the impact of their loans and training programs, Masila revealed that 4G Capital has lent over $200 million and serviced more than 4 million loans, with a notable 80% of borrowers being women. The company boasts a network of over 190 branches in Kenya and Uganda, with a strong presence in rural areas that are typically underserved by traditional banks. Furthermore, over 94% of clients have reported increased financial knowledge as a result of their engagement with 4G Capital. When asked about interest rates, Masila explained that customers receive varying rates based on their risk profiles and repayment behavior. Unlike conventional banks, 4G Capital does not require collateral for its loans, relying instead on the relationships established with clients. The company's commitment to financial inclusion is evident in its seamless mobile money disbursement and repayment system, which ensures accountability and transparency in all transactions. Regarding risk management, 4G Capital adopts a high-touch, high-tech approach to mitigate lending risks. By conducting thorough due diligence, verification processes, and leveraging machine learning capabilities, the company can tailor innovative products that meet the needs of each client. This proactive risk assessment strategy safeguards both the business and its customers from financial setbacks. Looking ahead, Masila highlighted 4G Capital's growth priorities, focusing on consolidating their presence in Kenya and Uganda before expanding into new African markets. The company remains committed to empowering underserved businesses and driving economic development in emerging economies. In conclusion, 4G Capital's pioneering lending model, combined with its emphasis on enterprise training and financial literacy, is proving to be a game-changer for SMEs in Africa. By championing a customer-centric approach and fostering strong community relationships, the company is not only facilitating access to finance but also promoting sustainable business growth and resilience in the face of economic challenges.