Kenfasp2p spoke to James Ginn– head of strategic partnerships development at MarketFinance – to explore trends in the LendTech sector and how the industry is helping SME loans in Kenya.

According to Ginn, 2025 will be the year of embedded finance, claiming ‘every company is going to be a FinTech company, and this will be driven by partnerships’.

Ginn underlined that many SMEs are still being held back by traditional banks when applying for or trying to access a loan, due to the reams of paperwork and the sluggishness of banks to approve the request.

With cash being the ‘lifeblood’ of SMEs, this wait can sometimes have a damaging effect on their ability to run their business. Ginn believes this stagnation has given rise to a new breed of LendTechs to fill the void, such as Kenfasp2p.

“SMEs are the backbone of Kenya, and are vital to the success of our economy, yet 82% of businesses in Kenya fail due to cash flow issues.

The time from requesting a loan to approval takes too long with a traditional bank. Our digital platform helps SMEs quickly access affordable online loans and have working capital.

But what’s important is we offer cash flow at the point of need to SMEs so they can just get on with running their business. We keep it as seamless and as easy as possible for them so they can focus on serving their customers. This is the essence of embedded finance.”

Traditional lenders like banks can often take weeks or even months to approve or reject loan applications. Such periods are ultimately costly for both individual borrowers and SMEs requiring the cash flow.

We’re at a point where many established players will digitize more of their existing products over the next three years by making apps and putting them on to mobile – gradually thinking about how they can plug in their solutions with other partners.

To make better and more informed decisions for their customers, Ginn said alternative data would offer a golden opportunity for lenders in the B2B and B2C space and will be one of the main trends that take off over the next one to three years.

Alternative data – already used widely in the online consumer space – will evolve quickly and be a point of differentiation for FinTechs, claims Ginn. He stated, “If you’ve just set up as an SME, how do you prove you’re credit-worthy? This is the embedded angle.

If a LendTech such as Kenfasp2p is embedded in social media, or into accountancy software, and then can analyze these large alternative data sets, it means even though an SME hasn’t got a large trading history, the LendTech can see their e-commerce activity has grown. As such, they can then give them a larger loan than a traditional bank could for a start-up.”