Fintech's enable unbanked people to access reliable, affordable and sustainable financial services. PHOTO | FILE | NMG
FSD Africa plans to boost the capacity of financial technology (fintech) firms and micro lenders to provide credit to micro, small and medium enterprises (MSMEs) in Africa after committing $4.5 million.
Through its investment arm FSD Africa Investments (FSDAi), the firm will work with Lendable, a firm that provides debt to fintechs in emerging and frontier markets, to amplify the impacts of fintechs and micro lenders in Africa.
“The adverse economic effects brought on by Covid-19 have hit MSMEs particularly hard. Our support to the Lendable funds will meet two pivotal goals — of providing them with easier access to much needed capital while accelerating broader financial inclusion on the continent,” said Anne-Marie Chidzero, FSDAi chief investment officer.
In Africa, fintechs have helped open up the financial sector's value chain and promotes efficiency gains, allowing a majority of unbanked people to access reliable, affordable and sustainable financial services.
FSDAi says that by providing funds to support the lending capacity of fintechs and micro lenders, MSMEs can access credit to facilitate their quick recovery. The investment will strengthen two new funds set up by Lendable with the first providing capital of at least $31 million to eight financial service providers lending to MSMEs across sub-Saharan Africa.
The second aims to provide $100 million to fintech companies lending to MSMEs in Africa and other emerging markets.
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