FSD Africa Investments injects 447.8 million shillings to provide capital to Kenyan MSMEs
NAIROBI, Kenya, December 20 – FSD Africa Investments (FSDAi), the investment arm of FSD Africa, has announced a Â£ 3million (447.8million shillings) investment in IMFact, a fintech company that uses supply chain finance to provide working capital to micro, small and medium enterprises (MSMEs).
As a âpooled receivablesâ factoring company, IMFact purchases pooled invoices from MSMEs for a mix of cash and deferred payments.
This gives sellers access to liquidity without the need to track or wait for bill payments, freeing up capital to buy new inventory, pay vendors, and grow the business.
Funding comes at a critical time as Covid-19 has placed undue pressure on MSMEs in many sectors, especially in the health sector.
Under current plans and subject to further fundraising, ImFact is expected to provide total funding of Â£ 475million to around 570 companies over the next five years and support around 5,600 jobs.
âWe are delighted to be working with IMFact to support rapid financing of MSMEs in Kenya at a time when many are struggling to access working capital from traditional lending institutions,â said Anne-Marie Chidzero, Director of Investments, FSD Africa Investments. .
Many of the MSMEs that are expected to benefit are family businesses, especially those that distribute medical equipment and pharmaceuticals to public and private organizations.
However, IMFact will also work with supply chain companies in other sectors.
Peter Fiala, Chief Investment Officer of IMFact, said: âThis investment paves the way for other capital investors, including debt, who will support the deployment of capital to our rapidly growing client list.
Among the first to partner with IMFact is ABC Pharmacy Ltd, which supplies pharmaceuticals to pharmacies, hospitals and clinics across the country but struggled due to insufficient working capital.
With funding from IMFact, ABC Pharmacy is now transitioning its business model by extending its credit terms to customers.
The ultimate goal of FSDAi in making the investment is to encourage the development of technology-based “debt pool” finance across Africa.
âBuilding on COVID-19, strengthening Kenya’s status as a financial services hub and creating jobs are at the heart of the UK’s strategic partnership with Kenya. We are delighted to support this investment by FSDAi in IMFact, which will help SMEs in Kenya recover from the challenges of the pandemic, âsaid Jane Marriott, UK High Commissioner to Kenya.