Umati plans to use the cash to scale up its core business of lending SMEs against invoices. PHOTO | FILE
Umati Capital, an invoice discounting and SME working-capital solutions provider, has received equity investment from Washington-based Accion. The American firm invests in startups in the financial services sector.
The firms did not disclose the amount, but Accion through its Venture Lab initiative normally invests between $100,000 (Sh8.9 million) and $500,000 (Sh44.7 million) in a company.
Umati plans to use the cash to scale up its core business of lending SMEs against invoices.
Accion said its investment in Umati is in line with its business of funding micro-financiers targeting customers sidelined by mainstream lenders.
“By letting enterprises borrow against their invoices and providing financing in only a couple of days, Umati has huge potential to streamline agricultural and other value chains, capturing more value for smaller enterprises in the region,” said Accion managing director Paul Breloff.
Bulk payments
The start-up recently received a $10 million (Sh880 million) credit line from Singapore-based ApexPeak in August to fund expansion.
Umati said it would expand using Internet and mobile applications allowing suppliers to receive payments through phones and employers to make bulk salary payments through Airtel Money.
“We believe our technology-driven approach presents an exciting opportunity to disrupt traditional financial services and fundamentally change how SMEs access capital and process payments,” said Umati founder Munyutu Waigi.
Micro-lenders and large banks are increasingly turning to technology-based platforms to extend loans and receive payments.
Real People, a South African SME lender has invested in a platform allowing loans to be applied and advanced online and through SMS.
Speed Capital has also invested in technology to advance loans and offer other financial services to customers through mobile phones.
Chief executive Dan Githua said at a briefing in Nairobi: “We started discussing how best to expand services to the unbanked population.”
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