E-commerce giant Jumia have expanded their online small business loan program to more markets across the African continent.
Jumia, Africa’s first startup unicorn, has extended the program they launched in May, providing the small scale loans to merchants in all of the African countries in which it operates, according to Techcrunch.
Jumia has partnered with San Francisco-based mobile lender Branch to provide the loans to vendors, with the program proving successful in Kenya since May.
Jumia and Branch use the sales history and future performance projections of online merchants to determine whether they qualify for loans of up to $290, offering a six-month term on the loans at 1.2 percent interest rates, BusinessDailyAfrica reports.
The loans are made available immediately on the Branch mobile app, and these are paid to vendors through M-Pesa, a mobile phone-based money transfer, financing and microfinancing service.
Merchants who wish to access the loans are required to fill out an online application form, with decisions made within two days.
Through the small business loans offering, Jumia is disrupting the financial sector by exploring products that will allow consumers and small businesses access to banking services that they otherwise would not have access to.
Jumia co-CEO Sacha Poignonnec explained the need for the small business loan program as a means to provide much needed funding for vendors.
“We are always working with those partners and we bring them business online and by just listening to them we realized how difficult it was for them to access funding,” Poignonnec said, according to Techmoran.
“So we realized they had a problem and we thought we could help them solve their problem by using the Jumia data to provide them with better financing opportunities,” he said.
Jumia currently serves 20 countries in Africa, with Nigeria remaining the biggest of those markets thanks to around 15,000 vendors present in the country, reports Guardian.