In Africa, small enterprises are the backbone of the economy, constituting nearly 90% of all businesses and playing a significant role in job creation, according to the London Stock Exchange Group. But, a substantial hurdle they face is the lack of access to credit, which is a widespread issue across the continent.

This is usually due to the absence of formal structures, accounting records, and tangible assets that can serve as collateral stifling their ability to sustain operations and expand.

In an ambitious bid to revolutionize the credit landscape for MSMEs, Zanifu, a Kenyan fintech firm that provides inventory financing for MSMEs is expanding its credit solution with a recent $11.2 million debt-equity funding in a pre-Series A round led by Beyond Capital Ventures and Variant Investments.

Previously only providing inventory credit to retailers by paying suppliers directly on behalf of the businesses using data collected from them and their suppliers, the new funding will enable it to expand its credit solution to distributors too.

The extent of credit financing varies depending on the business size, with distributors accessing up to $10,000 and retailers receiving goods valued between $200 and $500 with interest rates of 5% to 6% per month. So far, the startup has already made significant strides, extending credit to 13,000 micro-businesses and serving 500 distributors, boasting an impressive repayment rate of up to 99.2%, according to the startup.

The startup also plans to scale its operations in Kenya, shelving its previous plan to expand to Ghana and Uganda — some of the markets where small businesses also find it hard to raise capital for their operations and growth.

Other notable investors that participated in the round include; Founders Factory Africa, AAIC Investment, Google Black Founders Fund and existing investor Launch Africa. The round brings the total debt-equity funding raised by the startup to $12.7 million.