4G Capital–financing small businesses through tech

4G Capital’s primary focus has been on unlocking the potential of small businesses

In Summary

•4G Capital CEO Wayne Hennesy says the firm is creating opportunities by bridging the MSME finance gap and unlocking the potential of the informal sector. 

•The company is playing a role in the fight against Covid-19.

4G Capital chief executive Wayne Hennesy-Berret
4G Capital chief executive Wayne Hennesy-Berret

Clearing your mind, giving thanks for the gifts from the Creator, setting yourself to the right frequency to add the most value is the best start to any day, a practice 4G Capital CEO Wayne Hennesy-Berret lives by. 

Meditation is a must,” he says. 

For over six years, 4G Capital’s primary focus has been on unlocking the potential of East Africa’s informal micro and small businesses through the provision of working capital credit combined with financial literacy and business enterprise training. 

A virtual sit down with the firm's chief executive reveals how the business has continued to deliver a strong performance over the years. 

What do you attribute the firm’s success to?   

Our mission is to maximise shared value for financial growth.  We are creating opportunities by bridging the MSME finance gap and unlocking the potential of the informal sector.  So, we succeed when our clients succeed.  

From the beginning, we knew we needed to create our own technology to measure credit-worthiness that was not based on bank records, phone bills or CRBs, but on our own assessment.  What we do hasn’t been done before—our methods of ‘due diligence’ blend in-person interviews with digital assessments. 

The data we collect is filtered through our artificial intelligence, which we call ‘EVA’ (short for ‘evaluation algorithm’).  We can then offer an affordable loan at the right size for that client.

Since 4G Capital began seven years ago, our collection rates have been on average 95%, with 82% client repeat business, proving that our method works. 

 We surveyed clients with one of our partners, Technoserve, and found that our unique approach of business training combined with working capital credit increased client revenue by 82 per cent over a year.  

What has been the most challenging area in your leadership? 

We want to see client protection regulation in the digital lending sector strengthened for our clients.  

We are encouraged by the actions taken by the CBK and government so far, but I think this is a challenge for all responsible players, not just us.  

As a business we too need access to affordable capital, in local currency, for onward lending.  It took us a while to find the right financing partners, but we’ve had great success recently. 

Our financing partnership with Cooperative Bank last year was one of the first examples of a fintech and a bank working together to benefit the informal economy.  

It’s our job to get affordable, accessible business credit moving into the economy where it is needed.  This is not something we can do alone, and we’re looking forward to establishing new partnerships in the near future.  

We are living in the age of disruption where the new normal of business is employees staying at home, how has your firm worked to ensure maximum profitability?

We’re incredibly lucky in this regard.  As a fintech, most of our critical tech and systems are in-house, so working from home is easy for us.  We’re also blessed in Kenya with a government that understands the importance of the informal economy.  

 We are still lending to operational businesses, even at this challenging time, including through our Kuza partnerships with Proctor & Gamble and other providers.   

We have had to close some of our Kenyan and Ugandan branches in markets where social distancing cannot be observed.  But we are prioritising our clients’ needs, and are discounting our pricing by 10 per cent and cancelling all late-fees for any client who has struggled to repay. We’re here to grow businesses, and in doing so, we succeed too.  

Where do you see the biggest opportunities as countries battle with COVID-19? 

This crisis is giving us all pause for thought.  We are seeing people take care of each other. 

Technology is helping us stay connected and productive in ways we could never have hoped even five years ago. 

 4G Capital is providing health care products such as masks and access to soap and sanitiser. 

We’re experiencing critical education in sanitation that will not only protect us from this virus but also other diseases and infections transmitted through dirty hands and poor hygiene.  

Every problem has a solution, and for people who can provide that solution, there is an opportunity to create shared value.

How has staying at home been like for you?

This has been a real blessing.  Too often, I have spent time away from my family at work or travelling.  Being at home means family meals together.  It means spending time helping with home schooling and listening to how my kids see the world. These are amazing moments I would have missed otherwise.  My two sons and 7-year-old daughter are all keen boxers, so there is no let-up to the morning exercise schedule!

Do you have a regimen that you’ve been following? If so, could you outline how your day goes and how different it is from your normal routine?

I get up around 0530hrs, try for a 45-minute workout and a 10-minute meditation and if possible, a journal entry.  Then make breakfast for the kids with my superstar wife, who also works as Chief of Staff in the company.  I try for a decent catch up with a different senior manager once a day outside the usual work routine to make sure they’re OK and give them the opportunity to share their personal thoughts and feelings.

How do you make everything Simple when everything is so busy? 

Trying to see to the heart of an issue helps me prioritise.  “What is critical and must be done now? What is important and should be done next? What is a distraction from should be cut away?”  Prioritise, and keep going until the job is done.  Make time to breathe, think and communicate.  Above all, keep a humble heart.  No-one is successful without the help of others, so help others also whenever you can.

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