There is nothing quite as satisfying as a fun-fact mashup, especially when it weaves a compelling financial trend narrative.
Witness the following:
- Fun fact no. 1: SMEs account for 80 percent of the region’s employment, establishing a new middle class and fueling demand for new goods and services.
- Fun fact no. 2: The share of bank-intermediated trade finance that is devoted to intra-African trade is limited, and comprises approximately 18 percent ($68 billion) of the total trade finance assets of African banks.
- Fun fact no. 3: The trade finance gap in Africa is estimated to be between $90 billion and $120 billion.
The Mashup: SMEs are huge in Africa, but they’re not getting the trade financing they need from established financial institutions.
Ttrade financing platform, kountable is helping Rwandan entrepreneurs get the trade financing they need to build their businesses. The company isn’t an online lender. Rather, much like a supply chain financing firm, kountable, and not the entrepreneur, pays the vendor for the goods. The entrepreneur then acts as agent to ensure said goods are delivered to the customer, who then pays kountable. Following which, kountable pays the entrepreneur – minus a fee.

Supply chain financing has been experiencing a surge in the U.S., and one of the kountable co-founders saw a need for trade financing when working with Rwandan entrepreneurs. “Our platform allows us to perform the due diligence and underwrite transactions in a fraction of the time a bank would take to process a loan application, particularly for a customer without a credit score,” said Chris Hale, kountable founder and CEO. “Since our risk is mitigated by the structure of our transactions, including having the goods as collateral, we are able to finance at lower rates than banks and other lenders can offer.”
Like other supply chain financiers, such as U.S.-based Behalf, kountable has hopped on the trend bus of developing its own credit score for each entrepreneur and small business. Interestingly, this trend is just as relevant to the under- and unbanked of the U.S. as it is to the under- and unbanked of Africa.
The kountable credit score is sufficiently alternative — it’s based on the entrepreneur’s social media footprint. With the entrepreneur’s permission, the company’s smartphone app collects data points from a number of sources, including Facebook, Linkedin, Google+, and Twitter, which feeds into its calculation of the kscore. “What we see is that a successful, connected entrepreneur has a visibly different data footprint than, say a start-up entrepreneur, or a non-entrepreneur who is well connected,” said Hale.
Of course, kountable isn’t the only fintech solution for SMBs looking for funding in Africa. Marketplace lending platforms for SMBs have sprung up in Kenya, Ghana, Tanzania and Zambia, and microbusinesses have had organizations like nonprofit Kiva to turn to for micro and slightly larger loans for at least the past decade.
But for a certain set of entrepreneurs, a loan isn’t always the answer. Specifically, kountable services reputable entrepreneurs that need short-term financing to purchase goods for customers. So far, the company’s average transaction size has been $90,000 with an average duration of 90 days, which means that for the SMEs that seek kountable out, microfinancing was never an option.
The Rwandan government has so far been cooperative and supportive of kountable’s social platform, and the company is currently contemplating a US offering, though how it will differ from the Rwandan product is unclear. The firm will likely have to fight harder to acquire customers stateside, where online supply chain financing abounds.
Still, it’s hard to deny fun fact no. 4: by bringing supply chain financing to Rwanda and some of its neighbors, kountable is helping further financial inclusion in Africa. As far as Hale is concerned, online and digital platforms that are a variation on the supply chain financing theme are the next generation of SMB fintech solutions.
“The first wave of fintech, like any digital transformation, digitized much of the information and processes related to loan origination,” explained Hale. “The next wave should be to innovate around the product itself and to deliver financial solutions instead of just loans that better fit the small business customer.”