Jumia, the dominant e-commerce company in sub-Saharan Africa, is expanding the small business loan program it launched earlier this year into every country where the company operates.
Working with the San Francisco-based lender Branch, Jumia began offering start-up loan for small businesses in May. The loans were pegged to vendors sales history with Jumia and projections for the future performance of the businesses.
In Kenya, sellers received loans of up to 30,000 Kenyan shillings (roughly $290), with a six-month term on the loan to finance their businesses. Interest rates on the loans are 1.2% per month.
The loans are made available in seconds on the Branch app and are disbursed through M-Pesa.
So far, 200 vendors have applied for and received, loans from a beta version of the new program, ahead of the rush associated with Black Friday sales, according to the company.
For Jumia’s co-chief executive, Sacha Poignonnec, the expansion of the program is a matter of simplifying the lending processes for small and medium sized businesses in Africa.
“The Jumia lending program was launched with the aim of making it easier for SMEs to grow their businesses,” Poignonnec said in a statement. “We know that [small and medium-sized enterprises] on our platforms struggle to secure affordable credit from financial institutions, thereby limiting their potential to invest in their businesses and themselves.”
The company said that Jumia sellers across the continent will be able to access credit at terms that only go as high as 12% per year.
All it takes to apply for the program is for sellers to fill out an online application form. Credit decisions will be made within two days.