A group of Africa-focused organisations has established Easetrade, a digital platform that aims to increase access to financing for MSMEs in supply chains with limited access to formal credit.
Easetrade said it plans to finance around 5,000 MSMEs and disburse US$150mn in loans over the next three years, as well as train 6,400 enterprises in financial and digital skills.
To boost inclusion for youth- and women-led businesses, the platform said it will use credit-scoring tools that assess creditworthiness “beyond traditional tangible assets” rather than requiring collateral.
The tools, provided by Solv Kenya and Kaleidofin, use business viability, transactions and cash flow to create credit scores.
Eligible businesses will then be able to access structured supply chain finance such as dealer finance and invoice discounting, Easetrade said.
Easetrade is co-financed by the Trade and Development Fund (TDF), Trade Catalyst Africa (TCA) and the Mastercard Foundation.
TDF is a sustainable development fund provided by the Trade and Development Bank Group, an African regional multilateral development bank, while TCA is an investment vehicle owned by not-for-profit organisation Trademark Africa.
“The insights from this initial phase of the programme will pave the way for a wider roll-out across Africa, supporting small businesses to access affordable finance and have the expertise to utilise it effectively,” it said.
According to the African Development Bank, an estimated 80% of African SMEs lack access to formal financing, which amounts to a gap of around US$330bn.
Mary Kamari, executive director at TDF, said Easetrade had already “executed a US$9.2mn financing agreement with Faulu Microfinance Bank, which is actively providing financing to MSMEs across a range of supply chains and agricultural value chains”.
Duncan Onyango, chief executive of TCA, added: “By blending rapid, data-driven lending with capacity development, we are empowering a new generation of agribusiness owners to fulfil large contracts, expand into export markets, scale operations and create thousands of jobs in rural communities.”
Entrepreneurs using Easetrade will also receive training on financial literacy, record-keeping and digital skills.
Kamari added that the training was designed to “empower MSMEs to understand and leverage data-driven credit scoring, positioning them to meet strict lender requirements”.
Other recent financing aimed at Africa’s underserved SMEs include a combined equity investment of US$7.5mn from the Africa Food Security Fund and its manager, Exeo Capital, into Africa Global Trade Finance.
