Affirms continued backing: Swedish investment fund maintains support for African microfinance institution via subsequent loan.
Platcorp Empowers Small Businesses in East Africa with Focus on Women and Climate-Resilient Agriculture
Platcorp Holdings Limited, a financial services company based in Kenya, is making significant strides in providing accessible loans to micro, small, and medium-sized enterprises (MSMEs) in Kenya, Uganda, Tanzania, and Zambia. With a particular emphasis on micro enterprises and women-owned businesses, as well as climate-resilient agriculture ventures, Platcorp aims to address the persistent barrier of limited access to formal credit faced by small businesses in these countries.
Recently, the company received a USD 10 million loan from Swedfund, Sweden’s development finance institution. This latest financing round is backed up to 50% by a European Union guarantee under the EFSD+ scheme, aligning with the Global Gateway investment priority on financial inclusion.
Platcorp's strategy includes focusing on underserved communities, expanding financial services where access to formal credit is scarce, and providing targeted lending to women-owned businesses. The company's philosophy is to only lend to people if they end up being better-off afterwards.
One innovative product developed by Platcorp is a loan aimed specifically at smallholder farmers in the potato and dairy value chains in Kenya. This loan allows farmers to use their cattle as collateral to upscale their business and expand into seasonal crops.
In addition to lending, Platcorp offers technical assistance to its borrowers, including employing agronomists and providing training programs. The agronomists provide on-the-ground advice to farmers, helping them to implement sustainable agricultural practices and silage management.
Platcorp has a strong focus on environmental, social, and governance (ESG) practices, including customer protection and gender equality frameworks. The company has worked closely with Swedfund on designing innovative products, and this partnership has resulted in reduced credit losses and sustainable business growth.
The impact of Platcorp’s strategy includes promoting job creation, bolstering local economies, strengthening gender empowerment, and advancing financial inclusion for marginalized groups across the East and Southern African region. The partnership with development finance institutions like Swedfund leverages considerable capital to sustainably close financing gaps for MSMEs.
Platcorp's loan portfolio includes a significant number of agricultural clients, but agricultural loans only make up about 10% of the portfolio due to the high-risk nature of smallholder farming and small loan sizes. The average loan size at Platcorp is approximately $320.
This is Swedfund's fourth investment in Platcorp, following loans in 2018, 2020, and 2022. Platcorp provides credit to MSMEs in Kenya, Uganda, Tanzania, and Zambia, focusing on lending to underbanked or underserved individuals and companies, often rural or very small businesses.
In summary, Platcorp Holdings Limited leverages strategic impact investment funding to deliver accessible loans to MSMEs, prioritizing micro enterprises and women entrepreneurs in Kenya, Uganda, Tanzania, and Zambia. This approach is driving inclusive economic growth and sustainable development in these markets.
- Platcorp's growth strategy is not just focused on lending, but also on providing technical assistance to small businesses, as shown by their employment of agronomists and training programs.
- Platcorp's focus on blended finance, with a 50% European Union guarantee, reflects the company's alignment with Global Gateway's investment priority on financial inclusion.
- The technology aspect is integrated into Platcorp's approach to agricultural lending, where smallholder farmers can use their cattle as collateral, demonstrating innovative use of assets.
- With a strong commitment to affordable housing and energy transition, it would be interesting to see Platcorp explore similar strategies in these sectors, leveraging their expertise in development finance and financial inclusion.
