Asilimia, a Nairobi-based payment and micro-savings platform helping small businesses save for and access essential services such as insurance, bank accounts and loans, has raised $350k to help SMEs do just that.
Asilimia recently won $350,000 investment With $350,000 (R5 million), offer from the Unicorn Group at the Africa Cup at the SA Innovation Summit. The firm is now looking to raise $200,000 in seed capital by March 2020 to help as many MSMEs as possible access the financial services they need to build wealth.
The investment will also be used to equip 10,000 small businesses with insurance and other financial services, making partnerships with service providers in this sphere essential.
“This sector could do far more if the Micro Small & Medium Enterprises (MSMEs) within it were empowered with the ability to build wealth, which, in turn, will benefit financial service providers that tap into this burgeoning market,” says Tekwane Mwendwa CEO & Co-Founder of Asilimia.
“With there being 150 million MSMEs in Sub-Saharan Africa and this market set to produce $600 billion by 2022, the opportunity presented by this relatively untapped industry is massive, even more so if they are empowered to build wealth,” Mwendwa added.
The International Monetary Fund estimates that the informal sector contributes approximately 38% of Sub-Saharan Africa’s GDP[i]. Additionally, the International Labour Organisation has determined that it accounts for about 72% of total employment in the region[ii], absorbing more vulnerable groups in the economy, including women and youth[iii].
According to Mwenda, currently, informal businesses are condemned to stagnation due to lack of formal payments.
“Most MSMEs have no formal proof of registration and no access to digital financial services. Plus, they work on a cash system and are often the prisoner of loan sharks who capture all their margins. All this prevents them from building wealth on their trade.”
A former informal trader himself, Mwendwa realised fairly early on that despite being powerhouses of the economy, informal traders are at the base of the pyramid. “Nobody builds businesses thinking about you. Banks don’t think about you, marketing companies don’t think about you. The lack of formal services for this sector results in a lack of data on the sector and the subgroups within it. This, in turn, results in financial service providers being unable to access this thriving economy effectively. Additionally, governments are unable to derive taxes from the sector which can hamper their ability to provide adequate resources for their citizens as well as deliver programmes designed to overcome poverty and inequality.
“Recently, the Kenya Revenue Authority missed its collection target by Sh91.2 billion, but this could have been reduced had it had better access to the informal economy. I saw that if I could consolidate enough people like myself on one platform, I could solve these problems,” said Mwenda.
Asilimia formalises payments and revenue collection for small businesses, helping them climb the ladder of financial inclusion. It does so by giving them access to a business mobile money solution and enabling them to save as they transact, which in turn gives them formal proof of revenue and the ability to make repayments. By building the profiles of its users, Asilimia is able to identify groups which desperately need financial services and at the same time offer low risk, high return prospects for financial service providers. This helps MSMES to work with financial service providers and build wealth over time.
The startup was part of the top ten startups from around Africa that will showcase their solutions at the Startupbootcamp (SBC) AfriTech 2019 Demo Day on Thursday, 7 November 2019.
Other startups include:
Cinnamon Clubs (Uganda) which is helping savings and investment clubs to automate the bookkeeping of the transactions from members to and from the club.
Curacel Systems (Nigeria)-a first health claims switch in Nigeria. Powered by an AI fraud detection solution that increases the efficiency of processing claims, it digitalises claims at hospitals and sends them directly to the health insurer. Curacel saves companies up to 15% of erroneous and fraudulent claims.
Databotics (South Africa) opens up the power of robotic process automation to the SME market. From automating lead generation to submitting tax, DataBotics is able to remove mundane and repetitive administrative tasks that plague almost any company across every industry.
HouseAfrica Blockchain (Nigeria) is a blockchain-based land registry that aggregates unique land titles and reduces the time it takes mortgage banks, lawyers and other stakeholders to query and register land titles. By providing an immutable ledger with visual map reference, HouseAfrica ensures the integrity of land titles and increases access to credit.
Rentoza (South Africa) has created a marketplace that enables people to rent premium goods through a low-cost model underwritten by product insurance. Users can list their lazy assets on the platform and are connected with customers that have a need to utilise these products.
Snapslip Holdings (South Africa) eradicates paper receipts by sending these receipts digitally to a customer’s profile, thereby giving the customer a digital receipting repository. Snapslip then takes the data from each receipt and pairs it with customer profiling and produces spend, trend and predictive analytics which it provides to retailers, financial institutions, insurance companies and manufacturers.
Survey54 (United Kingdom) is a survey intelligence platform making market research easier within Africa and emerging markets.
Yobante Express (Senegal) is a web and mobile platform that connects e-commerce retailers, businesses and individuals with independent and casual couriers, that will handle deliveries from point to point. Literally anyone owning transport or travelling in the general direction of the parcel can now make money as a courier.
YouFarm (Zimbabwe) provides farmers with access to collateral-free finance by getting people to invest in crops and livestock and share the profits with the farmers when the produce goes to market.
“The depth, breadth and resilience of this cohort is quite fitting, given that this is the third year of the SBC AfriTech series. We are all so excited to officially introduce these newly scaled startups to the world at our Demo Day. This is the perfect opportunity for us to showcase the results of sourcing, screening and scaling the most innovative technology-driven solutions to challenges faced on the African continent,” says SBC AfriTech Programme Director, Nsovo Nkatingi.