Africa’s next wave of SME finance may not come from banks, or even from fintechs, but from the software companies that already run small businesses’ daily operations.
That is the bet behind Renew Capital’s inaugural Venture Lab: EmFi Series, which has selected 15 companies from more than 500 applicants across 48 African countries for deeper technical training and investment consideration.
Embedded finance, not fintech
The pan-African investment firm, which operates in 13 countries, is targeting embedded finance: financial products built into the software SMEs already use for payments, distribution, logistics, healthcare and agriculture. The logic is that these companies hold the customer relationships and operating data that banks lack, and can use them to underwrite credit for businesses banks do not serve.
The stakes are large. African SMEs are the continent’s main job creators yet face an estimated 330 billion dollar annual credit gap, while smartphone adoption in sub-Saharan Africa is projected to rise from 54% in 2024 to 81% by 2030, putting more businesses within reach of app-delivered financial products.
“The next generation of Africa’s small business banks won’t be banks,” said Matthew Davis, co-CEO of Renew Capital. “They’ll be startups that already understand how SMEs operate, have their data and have earned their trust. These 15 companies are building from that advantage.”
Who made the cut
The 15 companies span Ethiopia, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Togo, Uganda and Zambia. They include Ghana’s AgroCenta, Oze and Kutana, Nigeria’s Tradevu, Regxta and Rigo, South Africa’s Shiprazor, Kenya’s Zendawa, Ethiopia’s Marakisoft, Uganda’s MajibuAfrica, Senegal’s Dots for Africa, Zambia’s Fanaka, Togo’s Solimi and Morocco’s Z Systems.
Before the final selection, 47 companies advanced to a pitch competition with a startup support package Renew values at more than 250,000 dollars, and all applicants were given access to expert sessions with founders of some of the continent’s fastest-growing companies.
The programme adds to a busy season for African fintech-ecosystem building, from incubation programmes in Kigali to fintechs like Grey deepening local-currency services, and puts embedded finance squarely on the map as a distinct investment thesis for the continent’s SME economy.
