Mwananchi Credit Limited is adding a series of trading-related products to its portfolio. The trade finance products include cashless bid bonds, performance bonds, advance payment guarantees and letters of credit.
Currently, the micro-finance company mainly deals in logbook loans and car financing and has grown its customer base to become one of the leading providers in the market under these categories.
Speaking during the product rollout meeting, the company’s CEO Dennis Mombo said many Kenyans are excluded from the lucrative government and parastatal tenders due to tough conditions set to qualify. Some of the financial institutions, for example, insist on 100% cash cover for them to guarantee bid bonds or performance guarantees.
Meanwhile, when traders seek to import high-value machinery and other stock, they are forced to pre-pay to the seller when a letter of credit would have given them more time to cushion their liquidity. “Mwananchi Credit seeks to make these services available easily to the common person as it seeks to live up to its billing as the true mwananchi-centred credit company,” Mr Mombo says.
Mwananchi is diversifying into these categories even as the country slowly recovers from the Covid-19 pandemic and still reeling from its after effects. President Uhuru Kenyatta’s administration, in its last year, is keen on completing its Big 4 Agenda, powered by the ambitious Ksh3 trillion budget for the 2021/22 financial year.
If fully executed, it will see massive infrastructure spending that will in turn require a lot of trade finance documentation from the players. Mwananchi Credit seeks to tap into these emerging opportunities.
Mwananchi Credit has been previously awarded Best Logbook Provider in Kenya for its innovative approach to lending, which has stimulated it to disrupt the microlending industry.