Jumia expands its Mpesa loans for small businesses in Kenya

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Jumia, a leading e-commerce company, is expanding the small business Mpesa loans program it launched earlier this year into Kenya and every country in sub-Saharan Africa where it company operates.

Branch a San Francisco-based lender is working in partnership with Jumia to offer start-up Mpesa loans for small businesses. The Mpesa loans are attached to sellers sales history with Jumia and projections for the future performance of the businesses.

In Kenya, sellers received Mpesa loans of up to 30,000 Kenyan shillings (roughly $290), with a six-month term on the loan to finance their businesses. Interest rates on the loans are 1.2% per month.

Through Branch App the Jumia loans are disbursed instantly through Mpesa. Presently about 200 sellers have already applied and received the Mpesa loans using the beta version of the new program, in anticipation of the huge Black Friday sales which normally runs between 13th November to 13th December 2017.

Sacha Poignonnec, Jumia’s co-chief executive said the expansion of the program is a matter of simplifying the lending processes for small and medium sized businesses in Africa.

“The Jumia lending program was launched with the aim of making it easier for SMEs to grow their businesses,” Poignonnec said in a statement. “We know that [small and medium-sized enterprises] on our platforms struggle to secure affordable credit from financial institutions, thereby limiting their potential to invest in their businesses and themselves.”

Jumia sellers across the region will be able to access credit at terms that only go as high as 12% per year.
To apply for the Jumia Loans, the seller needs to fill out an online application form and the Credit decisions will be made within two days by Jumia and Branch.

Branch offers MPesa loans of up to Sh50,000 via an App. In the past two years, Branch has loaned more than Sh3 billion to more than 200,000 customers in Kenya and Tanzania.

The lender has previously partnered with e-hailing service Uber to advance loans to drivers. The financial tech company used data from the taxi-hailing firm to grant loans to drivers who have high ratings and done 500 trips.

Branch has been gradually growing with telcos, banks and other players pushing for a share of borrowers.

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