African neobank 4G Capital has raised $18.5 million in a Series C funding round, The Kenyan Wall Street reported Wednesday (March 16).
The new cash will allow the company to increase its finance and enterprise training solutions to small businesses in Uganda and Kenya and expand digital channels and data science to supplement its hybrid approach, 4G said.
In addition, the investment will allow them to expand their retail finance service to help retailers and distributors increase sales. The company said it uses Kuza, a FinTech feature that allows distributors to provide entrepreneurs with 4G Capital’s credit, rather than traditional cash on delivery.
The funding was led by Lightrock.
Launched in 2013, 4G Capital said it has loaned more than $230 million in working capital to over 1.7 million small businesses. The lender boasts more than 240,000 clients, where 81% are women and 77% are operating small- to medium-sized businesses in rural areas.
“Lightrock and 4G Capital share a complete alignment of purpose and mission,” said 4G Capital Founder and CEO Wayne Hennessy-Barrett. “They bring unrivalled experience of Africa and emerging markets. This capital will have a transformative effect in enabling us to scale the best products and services to the world’s most important sector.”
He said the microfinance sector has an average lending to capital ratio of 3.45, but that 4G has loaned more than 16 times its capital raised.
4G is not the only neobank raising capital to expand.
In January, Finclusion Group, the African-focused FinTech platform crafting neobank offerings for its users, secured $20 million in funding from investors in its latest capital fundraise, the company announced.
Learn more: Finclusion Group Raises $20M in Funding to Build out African Neobank
The company said it will use the funds to expand into Mozambique and Uganda and grow its operations in Eswatini, Kenya, South Africa and Tanzania.
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