Umati secures Sh880 million credit line from Singapore firm

Money Markets

 

Shelter Afrique offices in Nairobi. PHOTO | FILE

 

By John Gachiri

Umati Capital, a company that finances businesspeople and farmers supplying larger agribusinesses, has secured a $10 million (Sh880 million) credit line from Singapore-based ApexPeak to fund its expansion.

Share This Story

Tweet 11
inShare

The money will enable Umati to structure products that enable the traders and processors to pay farmers’ invoices early and at better rates.

Umati said the credit line from ApexPeak will target SMEs processing milk and fresh produce like maize, wheat, barley and rice.

“We look forward to aggressively expanding our unique blend of technology and financial services to companies in the agribusiness sector,” said Umati co-founder Ivan Mbowa in a statement.

The firm said it will draw the entire amount progressively starting with $300,000 (Sh26.5 million) this month, which will then be scaled up to between $5 million and $7 million (Sh442 million-Sh619 million) by the end of the year.

Supply chain finance

Mr Mbowa said the company sourced for capital from ApexPeak after finding it hard to raise the cash from Kenyan commercial banks.

ApexPeak said it funded Umati since its core business of buying electronic invoices from small and large companies is in line with its Kenyan partner’s business.

“We understand the challenges of setting up a supply chain finance platform. We were interested in the credit worthiness of the buyers, and the banks were interested in the credit worthiness of Umati,” said ApexPeak chief executive Gakim Solomons in a statement.

“As Umati has no trading history, there was a problem.”

Umati will equally leverage on ApexPeak’s network and experience. ApexPeak also has an office in Cape Town.

Umati is using M-Trader, a mobile app that enables suppliers to receive payments through their phones.

In March, the firm launched a plan targeting dairy farmers whose payments for milk deliveries come in 30-day cycles by offering daily payments on behalf of the processor without collateral.

The African Trade Insurance Agency (ATI) provided a credit risk cover to Umati Capital at the time.