Founded in 2015, Financial Access Commerce and Trade Services (FACTS) specializes in providing short-term working capital to SMEs, agribusinesses and emerging entrepreneurs in Kenya and Uganda that have limited access to finance from commercial banks. In East Africa, banks only serve ~20% of the US$30B SME funding need and FACTS fills this gap through its supply chain financing (SCF) offerings. In the wake of the COVID-19 pandemic, SEAF provided FACTS with an emergency loan to provide financing to key sectors such as agriculture and healthcare that experienced an increased need for financing or faced a lack of financing options due to the risks caused by the pandemic. The financing gap has threatened the closure of many businesses, many of which serve as sources of many families’ livelihoods, and has exacerbated challenges in East African countries that were already highly vulnerable to the spread of the virus and resource-constrained. As opposed to traditional banks, FACTS offers invoice finance and factoring to SMEs that does not require any collateral beyond invoices. FACTS leverages its technology platform to provide and monitor its invoice finance and supply finance products.
FACTS provides value chain financing, which consists of supply chain finance with suppliers on the procurement side and factoring with off-takers on the sale side. Through its financing, FACTS serves 5,597 suppliers, the vast majority of which are smallholder farmers in Kenya and Uganda, followed by traders in agriculture and pharmaceuticals. FACTS clients source mostly from suppliers that are based in rural areas of Kenya and Uganda. 87% of total suppliers are rural smallholder farmers, or firms operating in rural areas. By 2025, the SCF market in Kenya for the agribusiness and services sectors is estimated to grow to US$2B, with the pool of potential SME clients nearly doubling from 20,000 today to 37,500. In Uganda, the SCF market is expected to grow to US$800M by 2025. Though the SCF market size is smaller in Uganda than in Kenya, FACTS is likely to capture a larger share (7.5% vs. 3%) of the market in Uganda, which would position the company as a market leader in the country.
By providing financing to improve its clients’ cash flow, FACTS is stimulating economic and job growth in East Africa. By the end of 2019, approximately 50% of FACTS’ direct and indirect beneficiaries, which include permanent employees, casual laborers, customers, and suppliers/outgrowers, were women (20,000 women).
With the C19F investment, FACTS plans to invest in its cloud platform to optimize for loan origination, closing and monitoring from home, finance its US$1M pipeline of clients from the vulnerable agriculture and healthcare sectors, and accumulate working capital to weather downturns from future potential lockdowns due to the pandemic.
FACTS’ SEAF Gender Equality Scorecard©
Kenya and Uganda Gender Demographics
Benefits & Professional Development
Leadership & Governance
Women Powered Value Chains