US firm unveils alternative source of funding for SMEs

By: Peterson Tumwebaze

Goudy (left) and Hale address reporters in Kigali after the launch of the firm on Wednesday. (Timothy Kisambira)

Local small-and-medium enterprises (SMEs) could soon find it easier to secure funding from global financial institutions, thanks to a new initiative by Kountable Limited Rwanda that will help link SMEs to foreign investment capital.

Kountable Ltd Rwanda is a subsidiary of a US-based firm, Kountable, that links SMEs with foreign funders.
Chris Hale, the chief executive, said the internet-based platform will create a bridge between local SMEs and global funders and thus ease access to affordable credit to grow their businesses.
Hale explained that entrepreneurs will be able to access funding based on the strength of their social capital; that is ones network of relationships and contacts that help entrepreneurs grow their businesses. The firm’s platform is accessible on www.kountable.com.
“Think of what you do each day, calls, texts, emails, messages and connections…The path you wage through every day leaves a trail. We measure this trail and give you a rating or your kScore, which we use to help you get the financing you deserve,” he said.
Hale noted that the initiative would complement the work of the existing financial service providers in the country.
He was addressing SME operators during the launch of the firm in Kigali on Wednesday.
“Kountable measures entrepreneur’s social capital and turns it into a real asset that can be used to secure funding at very reasonable rates to buy stock, or finance business expansion,” he said.
“This innovative mode of trade financing makes it possible for SMEs to access credit quickly compared to conventional sources, and at competitive rates.”
Hale urged local entrepreneurs to consider social capital as an asset, which should be developed to enable easy access to finance.
Ian Goudy, the firm’s executive vice-president for operations, said the idea demonstrates the attractiveness of Rwandan SMEs as a target for global finance.
“With an attractive portfolio of entrepreneurs and transactions to finance, Kountable is able to go to the US markets to raise funds and offer investors an attractive rate of return,” Goudy said.
Leandre Cyusa, an entrepreneur and the company’s country manager, said the platform offers an alternative source of finance that will help support SMEs to spur the growth of the sector, and the economy generally.
The initiative is targeting 5,000 entrepreneurs by July 2015, he added.
Fabrice Shema, the managing director of Africa Medical Supply Ltd, said the initiative could help reduce constraints SMEs face when seeking funding, especially from banks. “It is hard for SMEs to get credit from local banks, so having an alternative source of affordable funding couldn’t have come at the right time,” Shema said.
He said that it will also make Rwanda’s financial industry more competitiveness, adding that it is a sort of wake up call for commercial banks.
Rwanda was ranked 4th by World Doing Business report for 2015 in the ease of getting credit, a huge improvement from position 13 in the 2014.