Umati Addresses Working-Capital Shortages for Small and Medium-sized Businesses
Washington, D.C., October 15, 2014 –Accion today announced an investment in Umati Capital, a Kenya-based lending company that provides invoice discounting and other forms of working capital financing to small and medium-sized enterprises (SME) in East Africa. Accion made the investment through Venture Lab, its $10 million initiative dedicated to providing seed capital and management support to innovative financial inclusion start-ups.
“East African farmers, like all small business entrepreneurs, need access to capital to expand their businesses, hire more employees, or buy materials in bulk. And generally, the banking system fails to meet their needs,” said Accion President and CEO Michael Schlein. ”Umati will provide affordable, timely working capital to help Kenyan farmers and other small enterprises grow and reach their potential.”
“In Africa, most SMEs are unable to secure financing from banks and other providers to address working-capital needs,” said Paul Breloff, Managing Director of Accion Venture Lab. “Banks typically require a proven track record and it usually takes them months to make a decision before issuing a line of credit. By letting enterprises borrow against their invoices and providing financing in only a couple of days, Umati has huge potential to streamline agricultural and other value chains, capturing more value for smaller enterprises in the region.”
Umati Capital partners with upstream value-chain buyers to provide receivables-based loans to producers. Umati finances its loans through wholesale debt and plans to source and conduct due diligence on the majority of its SME clients from brokers who are engaging on the platform. Umati also provides a bulk employee payments service to larger corporate clients via Airtel Money.
“We believe that our technology-driven approach presents an exciting opportunity to disrupt traditional financial services and fundamentally change how SMEs access capital and process payments,” said Munyutu Waigi, co-founder of Umati Capital. “We are thrilled to be partnering with Accion to expand our business and serve SMEs throughout the region.”
Accion is a global nonprofit dedicated to building a financially inclusive world with economic opportunity for all, by giving people the financial tools they need to improve their lives. We are building the next generation of top-tier microfinance institutions, and over the last 50 years have helped create 64 such institutions in 32 countries on four continents that today reach millions of clients. Our impact investing initiatives are pushing beyond microfinance to catalyze more than 20 innovative start-ups dedicated to improving the efficiency, reach and scope of financial services for the poor. And our Center for Financial Inclusion is helping to build a stronger industry with high standards and broad engagement. Currently, our work spans nearly two dozen countries, including the U.S., where we are the nation’s largest nonprofit microfinance network. For further information, visitwww.accion.org.
About Umati Capital
Umati Capital is a non-bank financial institution, operating in Kenya, focused on the provision of credit and related payment technologies to SMEs and their corporate trading partners. Umati Capital leverages technology to provide branchless financial services to small- and medium-scale suppliers, trading companies and industrial processors. Umati Capital was co-founded by Munyutu Waigi and Ivan Mbowa. For further information, visitwww.umaticapital.com