Small and medium-size business enterprises (SMEs), which have been as vital for stimulating economic growth in Africa, are set to benefit from a newly launched lending program from Jumia. The e-commerce firm made the announcement during the TechCrunch Battlefield Africa competition – #TCBattleField – in Nairobi on Wednesday October 11.
Jumia co-CEO Sacha Poignonnec emphasized the need to simplify lending processes for SME’s in Africa, and committed to contributing to a solution.
“The Jumia lending programme was launched with the aim of making it easier for SMEs to grow their businesses. We know that SMEs on our platforms struggle to secure affordable credit from financial institutions, thereby limiting their potential to invest in their businesses and themselves”, stated Poignonnec.
The loan program will leverage transactional, operational and behavioral data from Jumia’s platforms by thousands of SMEs to provide credit facilities to them.
Jumia sellers will be able to access credit at favorable terms, with low interest rates of up to 12% per annum. These funds are expected to be invested into working capital to buy goods to sell on the Jumia platform. Over 200 sellers across Africa are gearing up to take advantage of this program ahead of the Black Friday sale in November.
To access the program, vendors simply follow an online application & can expect a decision within two days. This compares very favorably to the experience they face today with financial institutions, with complicated paperwork requirements and lengthy waiting periods for loans to be approved.
The Lending Program was first launched in Kenya, and will then be rolled out in Jumia’s other markets in Africa -that is Nigeria, Egypt, Kenya, Morocco and Ivory Coast.