Kenyan fintech startup, has secured $2 million seed investment funding from Next Chymia Consulting HK Limited to support its expansion plans.
Paylend is a fintech startup that provides access to finance to MSMEs and aims to digitise them in Kenya.
Eliutherius Juma, CEO of Paylend
Paylend’s aim is to support MSMEs across Africa by helping them solve the problem of access to continuous capital while also connecting consumers to products and services and thereby bridging the consumer data gap.
Speaking of the business model, Eliutherius Juma, CEO of Paylend was quoted as saying “I believe in impact-driven solutions. For a very long time, MSMEs have experienced stunted growth due to lack of efficient business tools or lack of funds. With Paylend, we are able to turn this around by helping these businesses access affordable credit quicker thus allowing them to have liquidity, thus ensuring business continuity.”
Paylend has digitised over 10,000 SMEs since its launch in 2019, and its users benefit from a variety of services such as credit for products and services and also crowdfunding.
With this investment, Paylend hopes to expand its business in Kenya and also expand into new markets in Tanzania, Zambia, and Nigeria.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Next Chymia Consulting HK Limited, a HongKong-based firm that provides blockchain applications, consultation services, and training to global corporations, has invested $2 million in Paylend, a Kenyan fintech startup focused on providing access to credit and digitizing MSMEs in Kenya.
“I believe in impact-driven solutions. For a very long time, MSMEs have experienced stunted growth due to lack of efficient business tools or lack of funds. With Paylend, we are able to turn this around by helping these businesses access affordable credit quicker thus allowing them to have liquidity thus ensuring business continuity. Additionally, we form alliances with strategic partners with similar goals to present business tools that ease operations of these MSMEs. The value of the credit gap alone in sub-saharan Africa is at $90 billion that requires an increase of over 350% service to close the gap. To tackle these challenges, Africa needs transformational interventions. The formal banking landscape in Sub-Saharan Africa supports around 20% of Africa’s bankable population with the majority of people excluded from access to finance and wealth creation, this is a massive opportunity for FinTechs like Paylend,” Eliutherius Juma, CEO, Paylend said.
As part of its next three-year expansion strategy, Paylend will use this investment to expand its operations in Kenya and create new markets in Tanzania, Zambia, and Nigeria. Paylend is a product of Adanian Labs, a Pan African smart technologies venture studio on a goal to establish, nurture, and scale 300 impact-driven tech firms across Africa.
Why The Investors Invested
Paylend has digitized over 10,000 SMEs since it was founded. In Africa, only 29% of formal SMEs have access to loans, lines of credit, or overdrafts. The informal MSME sector, which accounts for over 60% of businesses in the region, has significantly lower numbers.
“We are absolutely delighted to partner and support Paylend. Our vision is to ensure that no one is left behind in Africa when it comes to access to technology that can potentially facilitate wealth creation. We believe in the power of technology in transforming communities, and Paylend’s model is doing that at a micro level, which is where a lot of work is needed if we are to drive digitization. We have seen first-hand the potential that the informal sector in Africa has in solving key society issues and we are excited to be able to support and create impact,” Kenji Sasaki, CEO, Next Chymia Consulting said.
A Look At What The Startup Does
Paylend, which launched in September 2019, has digitized over 10,000 SMEs and is still growing, with its users benefiting from a variety of services such as access to credit for products and services, as well as crowdfunding options. Paylend’s objective is to help African SMEs tackle the challenge of continuous finance access while also bridging the data gap between consumers and products and services. Paylend’s strategy provides for last-mile customer data collecting, allowing for a deeper insight of consumer demands while also adding value to the SMEs ecosystem.
Paylend is an Android app for consumers and small businesses that includes new features such as access to credit for enterprises, crowdfunding tools, and prepayment of products and services for consumers.
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions. He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance. He is also an award-winning writer
To be eligible for loans, MSMEs in Kenya like their counterparts in many other countries are requested to properly package themselves in a convincing manner by building better record data and access loans, but many are not skilled enough to achieve this, this is the opening Kenya’s fintech, Paylend is closing by helping MSME’s achieve this. The fintech is presently conducting surveys in Tanzania and Nigeria ahead of beta tests in those markets.
Paylend co-founder Eliutherius Juma
Paylend was founded in 2019 by Bendon Murgor and Eliutherius Juma with the objective to digitising the manual, black book recording of data traditionally used by MSMEs. Peylend’s cofounder Eliutherius Juma says that the “Loss of the book or tampering with records becomes a source of conflict, leading to poor business relationships and huge loss of revenue. This is the biggest problem that Paylend aims to solve.
“Most MSMEs in Africa experience stunted growth due to poor recording of their daily transactions. We identified a culture that exists in the African market where shopkeepers give credit to their customers, who pay back within a week or a month. These customers most of the time tip the shops. The shops record these transactions on paper, a practice that is tedious and bulky. Paylend intends to digitise this process and additionally add the shop’s cash payments transactions, enabling the shops to understand their actual value and stand a chance to expand by leveraging on accurate data.”
With Paylend, business owners can access proper transaction documentation, enabling them to be bankable and giving them an advanced method for credit management.
“Paylend is more of a complementary tool than a competitive one to the other financial products since it provides data that can help other stakeholders to make wise decisions and drive more business on their end,” said Juma. “For instance, taking advantage of Paylend’s data, banks can be able to identify potential shops to offer loans. Additionally, insurance companies can create policies to offer insurance for the credits that the shops give their customers at a monthly fee.”
The startup has over 6,500 customers accessing goods and services, or redeeming vouchers, via mobile app and USSD. So far, it has on-boarded over 2,000 premises. The startup, which charges a percentage of a customer’s subscription fee to a shop, as well as withdrawal fees and commissions, is actively working on expanding to other markets.
“We plan to expand to Nigeria, Tanzania, South Africa and Zambia. We are already conducting surveys in Tanzania and Nigeria in preparation for a beta test in the last quarter of 2021. By the end of 2022, Paylend will be operational in three different markets – Kenya, Tanzania and Nigeria,” said Juma.
This expansion will leverage on the presence of Adalabs, Paylend’s incubator, in these markets. The startup is also in the process of engaging VCs to raise a seed round over the next few months.
“Paylend has already done a proof of concept, and we are at the point of scaling. The greatest difficulty has been funding, but more opportunities are currently emerging,” Juma said. “I am optimistic about getting the funds we need to scale and become pan-African in the next couple of months.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
