The Financial Times has named 4G Capital, a market-leading neo-bank driving micro and small business growth in Kenya and Uganda, as one of Africa’s Fastest-Growing Companies. The Financial Times and the data provider Statista created the rating, which was based on the compound annual growth rate (CAGR) of audited sales from 2018 to 2021.
With an absolute growth rate of 201% and an average Compound Annual Growth Rate (CAGR) of 44.4% over the previous ten years in Kenya, 4G Capital (Fourth Generation Capital Ltd) is rated at Number 7 in Kenya and Number 43 in Africa. As the company achieves economies of scale with its digital credit services, 4G Capital consistently produces sustainable high growth with expanding profit margins.
Over $340 million has been lent through the company’s scalable and capital-efficient model between 2016 and 2022, which is significantly more than the average lending-to-capital ratio for the microfinance sector.
For primarily unregistered Micro, Small, and Medium-Sized Enterprises (MSMEs), 4G Capital offers 100% Unsecured Working Capital Loans, Business Training, and Access to Digital Solutions. These entrepreneurial businesses, which account for 80% of employment in Africa and more than half of the continent’s GDP, are the foundation of the continent’s economies.
The majority of these enterprises lack the cash flow needed to expand and are unable to obtain conventional sources of funding. The SME Finance Forum of the IFC estimates that Africa’s MSME finance deficit is $331 billion; in Kenya, it is $19 billion. Without access to institutional finance, 72% of MSMEs rely on loans from family or friends, and 30% collapse as a result of inadequate funding.
4G Capital is dedicated to providing the appropriate goods and services that close the MSME finance gap in Africa and play a significant role in the development of the informal sector’s economy on the road to formality. To reduce default risk, the company combines client-centric relationship management with its own AI technology. Customers of 4G Capital retain excellent payback rates (about 95%) without the need for refinancing; on average, customers see an 82% rise in yearly revenue. Over 4 million people have benefited from 4G Capital, one of the top 10 global finance B-Corporations.
Upon receiving the recognition, Wayne Hennessy-Barrett said;
This recognition is a most welcome milestone in the 4G Capital journey. Having recently accompanied US Ambassador to Kenya, Meg Whitman, on her roadshow to promote investment in Kenya and Africa, we are very proud to play our part in this most important and growing market. We are democratizing wealth creation by helping small businesses to grow, and in turn, demonstrating that global capital can get world-class returns by driving the regenerative economy from which everyone benefits.
4G Capital employs almost 1500 employees across Kenya and Uganda, nearly tripling since the start of 2022. Since its inception in 2013, the company has loaned over 2,600,000 small working capital loans via mobile money networks valued at over $340 million. The company has over 350,000 clients, 74% female, and 53% run micro and SME enterprises in rural areas.
4G Capital clients receive customized business training programs and credit guidance via mobile apps and in-person via a nationwide network of branches. 4G Capital’s unique machine learning technology delivers high-fidelity insight into client risk and affordability. As a result, 4G Capital consistently achieves high collection rates (95%) without collateral or refinancing its clients, only lending to viable businesses on terms that are right for them. 4G Capital has positively impacted over 4.1 million people.
This year, 4G Capital has gained recognition for several awards, such as the Global Top 10 for Financial Services in the Real Leaders Impact Award & Top, B Lab 2022 Best for The World™. Recently, the company received an Honourable Mention for Responsible Digital Innovator of the Year at the IFC’s Global SME Finance Forum Awards 2022. Wayne Hennessy-Barrett, CEO and Founder of 4G Capital was also recognised in this year’s Top 50 Financial Technology CEOs of 2022.
