Hilda Moraa, CEO & Founder of Pezesha, a Kenyan business which has created a holistic digital financial infrastructure, explains how embedded finance can transform SME financing.
In the rapidly evolving landscape of FinTech, embedded finance has emerged as the new force of transforming SME financing in a meaningful and sustainable way. Embedded finance offers new ways to integrate financial services directly into non-financial platforms. Pezesha is pioneering embedded finance in Africa by reshaping the way SMEs access productive working capital. By leveraging the power of embedded finance, Pezesha is not only enhancing financial inclusion but also enabling SMEs to thrive and achieve prosperity.
The total financing gap for Africa’s 50+ million SMEs, which form the backbone of Africa’s economies, is estimated to be US$330 billion. This gap continues to widen in the current tough economic climate and the ‘missing middle’ underserved SMEs are the most affected and left behind, particularly women-led businesses. The underlying challenges of collateral, processing costs, as well as antiquated, often manual, risk-scoring methodologies make lending to SMEs inaccessible especially from traditional financial institutions. FinTech has fuelled disruption in this conundrum by leveraging the high mobile economy penetration across Africa that helps build transactional history that can be used as alternative data to build credit histories for these SMEs.
Solving SME working capital is difficult and hard, but the power of embedded finance can help solve these challenges for Africa for the long-term and in a sustainable manner by building an ecosystem that embraces the spirit of collaboration, co-creation and innovation and utilising plug-and-play API tools.
Pezesha, is a licensed Pan African embedded finance platform that has been at the forefront of solving SMEs’ working capital. Pezesha addresses the working capital needs of underserved SMEs in Africa, particularly informal women-led micro businesses which lack access to affordable credit for inventory purchases and business expansion. With operations in Kenya and Uganda, Pezesha is currently scaling up its proven digitally-enabled platform through its embedded finance platform that allows it to take a collaborative approach that is fully integrated, frictionless and seamless to allow merchants of its partners access non-cash credit and leverage Pezesha as a payment option to inventory and working capital needs that catapults their business grow to the next level.
Here’s how Pezesha’s approach is revolutionising SME access to productive working capital: Embedded lending solutions, Alternative credit scoring, Enhancing financial literacy and Pezesha-as-a-Service.
Pezesha’s embedded finance model extends financial services to businesses that might otherwise be excluded from the formal financial system. By integrating financial services into platforms that SMEs already engage with, Pezesha reaches a broader audience and provides access to essential financial resources. This inclusivity is particularly valuable in regions where SMEs play a crucial role in economic development. By providing access to working capital, Pezesha supports the growth and sustainability of these businesses, contributing to job creation and economic stability.