Solv Kenya to lend SMEs Sh780m – Business Daily
Standard Chartered Bank branch on Kenyatta Avenue. FILE PHOTO | NMG
Standard Chartered-backed marketplace for small businesses Solv Kenya has set up Sh780 million worth of credit lines with financial institutions for onward lending to small businesses looking for cash to fund orders.
Solv Kenya said that it has in the last three months registered over 1,000 Micro, Small, and Medium-Sized Enterprises (MSMEs) under the plan, which will see them access funding based on their transaction history with the suppliers without the need for collateral.
Solv, which first launched in India in December 2020, was incubated by SC Ventures, Standard Chartered Plc’s innovation, ventures, and fintech investments unit.
“This programme will not only address MSMEs growth challenges but give them options for accessing competitive pricing, more customers for manufacturers and traders and new markets for financial institutions,” said Solv Kenya chief executive Sheila Kimani Omukuba.
The Business-to-Business (B2B) marketplace also offers small businesses insurance service, credit facilities from multiple lenders as well as Buy now Pay Later (BNPL) plans.
In India, the platform supported SME businesses worth over Sh31.2 billion ($260 million) in the first half of 2022.
The firm expanded into Kenya in July, allowing small enterprises to trade goods with each other, expand their customer base and digitise their operations.
Standard Chartered Plc’s local subsidiary—Standard Chartered Bank Kenya— is among the providers of the loans to be issued on Solv.
Entry into e-commerce is part of the global lender’s diversification drive outside its mainstay of corporate banking.
In Kenya, the lender recently entered the fund management business in partnership with Sanlam Investments East Africa and global digital wealth technology provider Bambu, rolling out a unit trust product dubbed SC Shilingi Fund.
Small businesses in Kenya have over the years struggled to access credit due to high-risk perceptions, locking them out of business opportunities which need upfront investment—such as procurement deals.
Findings of a 2016 survey by the Kenya National Bureau of Statistics (KNBS), for example, concluded that about 71 percent of the 7.4 million MSMEs in 2015 got less loans than they had applied from the banks, with about 86 percent forced to rely on family and friends.