KENYA – Branch MFB, first digital microfinance bank, has entered into a strategic partnership with Solv Kenya, a B2B marketplace for MSMEs, to extend loans, business development support and market linkages to Kenyan MSMEs. 

The partnership aims to unlock new growth potential for MSMEs by bridging the credit gap, providing financial guidance and accelerating business linkages for entrepreneurs across the country. 

Under the arrangement, Branch MFB will provide loans and working capital of up to Kshs. 1 million for MSMEs on Solv Kenya’s platform, facilitating their cash flow and stock financing from suppliers and distributors.

Century Microfinance Bank Limited (Century MFB) is by Branch International Limited. It was launched on January 1, 2022, making Branch MFB the first digital microfinance bank in Kenya.

Speaking during the partnership announcement, Branch East Africa Managing Director Rose Muturi said seamless access to digital financial services will help address liquidity challenges for MSMEs.

This partnership, she said, goes beyond simply providing instant digital loans to enterprises. It is about empowering MSMEs with market linkages and support to build sustainable businesses and contribute to Kenya’s economic growth. 

“Access to credit facilities and business support is key to unlocking the full potential of our MSMEs. The partnership is a significant step forward in achieving this goal. By combining our expertise, we will provide Kenyan entrepreneurs with the comprehensive support they need to scale their businesses and contribute to a more vibrant Kenyan economy,” Ms. Muturi said.  

Solv Kenya has a diversified portfolio on its platform, cutting across various supply chains ranging from food, consumer goods, construction, alcoholic beverages, animal feeds, electronics, airline and travel. MSMEs participating in the enrolled value chains are able to obtain stock financing from Branch MFB through the Solv digital platform.

African Lead SC Ventures and Chief Executive Officer Solv Kenya Dan Karuga said the partnership enables them to de-risk lending to MSMEs while opening them up to a diversified portfolio across various supply chains.

This partnership is a perfect alignment of our technological expertise and a testament to the power of collaboration in driving innovation and growth in Africa’s digital economy. We are confident we will unlock new capital streams for SMEs, enabling them to scale efficiently.  Together, we aim to reach out to more MSMEs and offer them convenient and affordable credit solutions that suit their needs,” Mr. Karuga said.

MSMEs are important contributors to economic growth in Kenya, constituting 98% of all business entities in the country. The sector remains highly informal, as only 20% of the over 7.4 million MSMEs operate as licensed entities. The partnership will provide significant embedded financing solutions for these MSMEs that are often excluded from the formal economy.

 “At Branch, we remain committed to cooperating with other industry players to offer financial solutions. Our partnership with Solv Kenya creates a significant embedded financing solution for MSMEs,” Branch International CEO Matt Flannery said.  

The sector provides enormous opportunities for socio-economic transformation, absorbing low-skill and economically excluded individuals, such as women, persons with disabilities, and those with low levels of education.

Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy, and moreSUBSCRIBE HERE