How Can African Fintech Startups Provide Working Capital for Small Businesses?

Small businesses are the backbone of Africa’s economy. According to a Mckinsey report SMEs provide 80 percent of jobs on the continent. Small businesses in Africa struggle with working capital due to the slow rate of tech adoption on the continent. 

We still have several small businesses that use pen and paper for storing vital information. These inefficiencies waste time and affect cash flow.

Several fintech startups like Paystack, Fawry and Flutterwave are providing solutions to small business challenges, using different approaches such as digital bookkeeping, connecting small businesses with suppliers, banking and software services.

Nigeria fintech startup Kippa aims to support the ongoing helping small businesses to access working capital across Africa. The startup, today, raised $3.2 million in pre-seed funding to pursue this goal. According to co-founder and CEO Kennedy Ekezie, the bulk of transactions done by small businesses are cash-based, and over 30% of sales are made on credit. This highlight access to working capital as the biggest problem small business face on the continent.

“For us, what we do is we have such a unique opportunity to provide financial services to users. For most of them, Kippa is the first B2B SaaS app that they’re using. 

And we do have a unique opportunity to help them accept online digital payments, to provide them with working capital, digital savings and plug them into the financial ecosystem”, Ekezie told Techcrunch. 

Kippa was launched in February 2021 by Ekezie, Duke Ekezie and Jephthah Uche. This is not the team’s first startup. They founded Africave, a software talent matching platform in 2019 which was stalled.

“And we saw a bigger problem, which is the biggest problem small businesses face, the lack of access to credit or financing to run properly. So we thought that was an interesting enough problem to solve”, Ekezie added.

Whilst Kippa shares a lot of similarities with existing fintech startups, Ekezie believes he and his team have built a digitally native app, one that is tailored for small businesses in Nigeria.

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