Kenyan FinTech company IMFact, which uses supply chain financing to provide working capital to microbusinesses and small- to medium-sized businesses (SMBs), has received an investment from FSD Africa Investments in the amount of 3 million British pounds. The IMFact business model is a “pooled receivables” factoring platform, which means it buys bulk invoices from microbusinesses and SMBs for both upfront cash and deferred payments, the release stated. This gives sellers cash without having to wait for invoices to be paid. It also frees up capital to buy new inventory, pay suppliers and expand business. This model is different from the pre-existing invoice discount style in which the company picks the best receivables or invoices, while the rest can’t be used as collateral, according to the release. Additionally, IMFact’s model allows more access to working capital as it doesn’t require an upfront deposit or guarantees. Many of the businesses that will benefit from the investment into IMFact are family-owned ones, which distribute medical equipment and pharmaceuticals. But IMFact will also work with other industries as well.
IMFact will provide total funding of 475 million British pounds (about $638 million) to around 570 businesses in the next five years, supporting around 5,600 jobs. FSD Africa’s goal is to help finance businesses in Africa, which is behind on global averages for pooled receivables financing, the release stated. Only South Africa has a significant factoring model. Kenya, meanwhile, where IMFact is based, had numbers sitting at under 2%. Building back from COVID-19, boosting Kenya’s status as a hub for financial services, and creating jobs, are at the core of the U.K.’s Strategic Partnership with Kenya.