Small and medium-size business enterprises that supply merchandise to online shopping portal Jumia stand to benefit from a lending programme that would see the SMEs expand their operations.
Jumia managing director Sam Chappatte said the newly launched programme is aimed at providing a unique credit scoring method for the vendors who sell through the platform.
“Through this programme, we are offering SMEs new ways to access collateral-free loans quickly,” said Mr Chappatte.
“This allows them to expand their businesses and fills a void in the market, given the restrictions banks face today.”
SMEs contribute about 40 per cent to Kenya’s gross domestic product (GDP) as it employs more than half of the working population.
To access the loan facility, vendors need to follow an online application. Feedback on whether or not one qualifies is received within two days.
The Jumia lending platform hopes to simplify the process for SMEs to access loans based on their operational, transactional and behavioural data from the online shop to determine the amount one can get.
Mr Chappatte said over 4,000 sellers across the country are gearing up to take advantage of the lending platform.
“SMEs on Jumia will be able to access credit at favourable terms, with interest rates from as low as 12 per cent per year with an approval decision made within 48 hours,” said Mr Chappatte.
“This experience compares favourably versus financial institutions with complicated paperwork requirements and lengthy waiting periods for loans to be approved.”
The lending programme was first launched in Kenya with support from Bit Bond, a German-based peer-to-peer online lending platform.
Bit bond allows entrepreneurs to earn high returns on their investments and help fund businesses globally with its dollar- and bitcoin-denominated loans.
The lending programme comes few months after Jumia partnered with mobile phone-based lender Branch to offer start-up loans for small-scale traders.
Sellers on Jumia were to access loans of up to Sh30,000, repayable within six months, to finance their businesses. Loans were to be repayable at an interest rate of 1.2 per cent per month through the Jumia seller’s Branch app via M-Pesa.