Asante closes first tranche of $7.5m Series A funding to bridge the gap in MSME lending in Africa – Finextra

Asante Financial Services Group (Asante) announces $7.5 million Series A investment anchored by Goodwell Investments with participation by other investors including Sorenson Impact Foundation and Forsage Holdings.

We are delighted to welcomeour new investors including Goodwell, Sorenson andForsagein our inaugural institutional fundraise. Together, we will advance access to finance, and financial independence and wellbeing for the millions of small businesses on the continent, said Chidi Okpala, Founding CEO of Asante.

MSMEs have a significant impact on the economies of most countries, especially emerging markets, representing 90% of all businesses, 66% of all jobs created and 50% of the worlds GDP. Yet according to the World Bank, the annual SME credit gap in Sub Saharan Africa is about US$330 million. MSMEs are often neglected by lenders due to a combination of factors. These include the high cost of customer acquisition and due diligence, insufficient data availability for accurate credit assessments, lack of collaterals, uncertain customer lifetime values, and the high costs of distribution and servicing.There is a large opportunity for lenders who are able to overcome these challenges.

Asante differentiates itself with its ecosystem-based digital lending platform that uses alternative data and a proprietary AI loan decisioning management system to approve loans to MSMEs. The company works directly with ecosystem channel partners to collectconventional and non-conventionalMSME data, with the prior consent of the clients. Its channel partners include Africas largest telcos, mobile-based marketplaces, airlines, retailers, payment processors, insurance companies, smartphone phone OEMs and large FMCGs. This significantly reduces the cost of customer acquisition and due diligence, while providing sufficient alternative data for credit underwriting.

As a result, Asante is in a strong position to address the credit gap and accelerate its rollout. Asante has executed over 16 strategic corporate channel partnerships, giving Asante direct access to 2m MSMEs with a monthly lending opportunity in excess of US$200 million.

With over650% growth in lendingactivitiessince Q1 2021 and a sustained average all-in default rate of 2.5%, Asante is well-positioned to fast track scaleand deepen our impact in our operating markets. Our bold post-COVID response is helping small businesses recover, reconstruct and reposition for growth while ensuring that thousands of jobs are safeguarded. We look forward to a round extension very early in the new year to support the solid growth momentum, notes Okpala.

MSMEsparticularly those in the informal sectorare being held back by a lack of responsible lending from traditional financial services providers who are unable to run accurate credit checks and offer profitable loans to this segment of the market. Asante has solved these problems through its innovative digital platform and ecosystem approach. The companys success to date is proof that the model works, and we are very confident that the business will scale quickly and successfully with this round of funding, explains Bitta Wycliffe, Senior Investment Associate atGoodwellInvestments.

This is the 20th investment byGoodwellInvestmentsuMunthufund, of which 50% is invested in financial inclusion. Asante is a perfect fit and a great addition to our portfolio of other socially responsible financial services providers.

Asante is a strategic partner of Mastercard for digital lending in Africa and the only African fintech in a class of 6 scaling start-ups selected in May 2021 to join the award-winning Mastercard Start Path program. Asante is currently piloting its Business Lending Platform, to further extenditslending and other services to small business clients with essential tools like Business Financial Manager, Management Toolkit and Tax Advisoryto assist them to operate more efficientlywhile infusing resilience into their operations. Via the platform, Asante will also be able to offer insurance, payments, and other products to its clients.

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Asante closes first tranche of $7.5m Series A funding to bridge the gap in MSME lending in Africa - Finextra