Startup comes to SMEs’ rescue with affordable loans

 

By LYNET IGADWAH

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Summary

• Lendable Inc, runs a technology-enabled platform for alternative lenders seeking capital injection to grow their businesses.
• Unlike the other debt capital providers, it uses its own data points to give lenders personalised interest rates, tailored to their unique circumstances.
• What potential borrowers are required to do is simply sign up to the platform, share their portfolio information to allow Lendable suggests real price options and conduct due diligence.

Limited access to capital has always been a challenge that hampers growth of SMEs in Kenya.

This has been made worse by the recent introduction of interest rate cap that pushed commercial banks to opt for big borrowers, hurting small businesses.

It is therefore good news for SMEs that a startup with operations in Kenya and Uganda has come to their rescue.

Lendable Inc, runs a technology-enabled platform for alternative lenders seeking capital injection to grow their businesses.

Unlike the other debt capital providers, it uses its own data points to give lenders personalised interest rates, tailored to their unique circumstances.

What potential borrowers are required to do is simply sign up to the platform, share their portfolio information to allow Lendable suggests real price options and conduct due diligence.

The Maestro-backed platform digests and analyses monthly repayment data (micro payments such as through mobile) and alternative lender financials to produce credit scores, loan repayment forecasts and alternative lender cashflows.

“The Kenyan market has entrepreneurs with enormous appetite for growth yet ((lending) terms by banks and other debt capital providers do not appeal to them,” said Lendable co-founder and CEO Daniel Goldfarb (above).

Instead of the tedious form-filing process to confirm authenticity and status of loan applicants, Lendable provides its clients with legal template documents to make the transaction faster.

Mr Goldfarb, 30, said since launching operations in Kenya three years ago, a total of Sh100 million (1.1 million USD) has been lent out.

He says there are negligible default rates for the loans whose average repayment period is 18 months.

Lendable portfolio of alternative lenders include the non-banked, asset-backed finance providers operating in microfinance, asset financing, asset leasing and a range of pay-as-you-go utility services like energy, water and sanitation.