•In the current market trend, banks are not willing to provide financing to companies that do not have at least three years of audited financial statements.
•In the partnership Brighter Monday will leverage its regional network of companies and MSMEs to vet eligible invoices and business entities that qualify to get the funding.
Micro Small and Medium Enterprises (MSMEs) in Kenya are set to benefit from a new capital financing model that seeks to bridge the gap left by lending institutions.
The initiative by fintech company that uses supply chain financing to provide working capital to MSMEs, IMFact, and Jobs Platform Brighter Monday, offers funding to SMEs on the basis of the purchase of the portfolio of trade receivables of the SME.
A vast majority of SMEs, lack access to affordable financing.
"In the current market trend, banks are not willing to provide financing to companies that do not have at least three years of audited financial statements,” said Emmanuel Mutuma, CEO Brighter Monday Kenya.
IMFact is a smart finance alternative to traditional bank lending for Kenyan SMEs operating in the supply chain business by turning the companies debtor portfolios into liquidity for working capital and other expenses.
In the financing model IMFact will purchase or finance MSMEs Invoices for a mix of upfront cash and deferred payments, giving the sellers access to cash without the need to follow up or wait for invoices to be paid.
“This will free-up capital to buy new inventory, pay suppliers, and grow the business without collateral or guarantees required,” said Derrick Lwatati, IMFact commercial director.
According to Lwatati the model provides faster access to working capital than the invoice discounting usually offered by banks because it does not require an upfront deposit or guarantees.
With the opening up of the country after a long hiatus with COVID-19, businesses will now have the opportunity to immediately turn their invoices into cash.
The pool of invoices collected from the SME serves as collateral which will result in a flexible financing facility.
Philip Ilako, head of New Business IMFACT said: “IMFact's mission is to provide affordable, sustainable and scalable working capital financing to businesses in the SME-to-SME value chain in Kenya and soon in many more African countries.”
In the partnership Brighter Monday will leverage its regional network of companies and MSMEs to vet eligible invoices and business entities that qualify to get the funding.
Despite failing to disclose the amount of funds that will be advanced to MSMEs in the country, ImFact is projected to provide funding to 5000 SMEs through partnership with Brighter Monday.
IMFact has been financing clients in the Healthcare and Logistics sector and has in recent times expanded to transport, agriculture and food.
In December FSD Africa Investments (FSDAi), the investing arm of FSD Africa pumped a Sh 375 million investment into IMFact to advance to SMEs in Africa.