FSD Africa Invests KSh447.8 mn into IMFact to Boost MSMEs Capital 

FSD Africa Investments (FSDAi), the investing arm of FSD Africa, has injected £3 million (KSh447.8 million) into IMFact, a fintech that uses supply chain financing to provide working capital to micro, small and medium enterprises (MSMEs).

As a “pooled receivables” factoring business, IMFact purchases bulk invoices from MSMEs for a mix of upfront cash and deferred payments.

This gives the sellers access to cash without the need to follow up or wait for invoices to be paid, freeing up capital to buy new inventory, pay suppliers, and grow the business.

The funding comes at a critical time with Covid-19 having placed undue pressure on MSMEs in many sectors, most notably in the healthcare sector.

Under current plans, and subject to further fundraising, ImFact is projected to provide funding totalling £475m to around 570 businesses over the next five years and support around 5,600 jobs.

“We are pleased to be working with IMFact to support the rapid financing of MSMEs in Kenya at a time when many are struggling to get access to working capital from traditional lending institutions,” said Anne-Marie Chidzero, Chief Investment Officer, FSD Africa Investments.

Many of the MSMEs expected to benefit are family-owned businesses including those that distribute medical equipment and pharmaceuticals to public and private organizations. However, IMFactwill also is working with supply chain businesses in other industries.

Peter Fiala, Chief Investment Officer, IMFact said: “This investment paves the way for further capital investors, including debt, which will support further deployment of capital to our fast-growing list of clients.”

Among the first to partner with IMFact is ABC Pharmacy Ltd, which supplies pharmaceutical products to pharmacies, hospitals, and clinics across the country but had faced challenges due to inadequate working capital.

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Through IMFact’s financing, ABC Pharmacy is now making a transition in its business model by extending its credit terms to clients.

FSDAi’s ultimate objective in making the investment is to encourage the development of technology-enabled, “pooled receivables” financing across Africa.

“Building back from COVID-19, boosting Kenya’s status as a hub for financial services, and creating jobs, are at the core of the UK’s Strategic Partnership with Kenya. We’re pleased to support this investment by FSDAi into IMFact, which will support SMEs in Kenya to build back from the challenges of the pandemic,” said Jane Marriott, the British High Commissioner to Kenya.