4G Capital secures US$2m financing to lend small and medium businesses in East Africa

AFRICA – Private equity firm 4G Capital has secured a US$2 million (KSh202 million) loan for onward lending to small businesses in Kenya and Uganda.

The new loan was provided by Ceniarth LLC, an investment vehicle of American Diane Isenberg whose family fortune is estimated at more than US$500 million (KSh50 billion).

“4G Capital is pleased to announce the completion of its second round of fundraising. The investment was secured by a US$2 million (KSh202 million) debt facility from Ceniarth LLC, bringing the total raised to US$4 million (KSh404 million).

“4G Capital will use the investment for onward lending to its growing customer base of informal micro, small and medium-sized enterprises across Kenya and Uganda.”

The company says it has issued revolving loans of more than US$90 million (KSh9 billion) in 750,000 transactions. Most of 4G clients are owner-operator businesses with daily net incomes of between US$2 (KSh200) and US$5 (KSh500) per day.

They have short business cycles of one to 30 days. “Over the last 12 months, revenue has increased by 97 percent as 4G Capital supported over 60,000 micro, small and medium-sized enterprises,” the company said.

“By the end of this year, 4G Capital will have lent US$43.6m (Sh4.4 billion), surpassing all expectations.”

4G says it registers repayment rates of about 94 percent, adding that the short-term loans are settled using the borrowers’ business cash flows and not new debt.

“We are proud to support 4G Capital as a best-in-class financial lender that listens to the needs of the communities that it serves,” Diane Isenberg, the founder of Ceniarth, said in a statement.

4G Capital says it will continue to grow its network of physical branches this year, with an additional 24 branches across Kenya and 34 across Uganda, bringing the network total to 150 branches.

4G Capital empowers micro and small businesses in Sub-Saharan Africa to grow and succeed. This not only means access to credit, but also the skills to use it correctly. That why their first product blends loans with financial education.

They provide each client with a bespoke programme of business training which enables them to use the credit that they provide to positively grow their business. 

They look at their current life and business stage to give them the relevant information to help them on their journey.

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