The Game-Changer Driving Africa’s SME Growth and Innovation

In Africa, many innovative business ideas fail to materialise because of a fundamental barrier—the lack of working capital. While some may argue that a great idea is all that is needed to start a business, the truth is that financial resources are critical to bringing any entrepreneurial vision to life. Pezesha fintech SME growth in Africa is a strong example of how access to finance can empower small businesses and turn ideas into impact.

When Hilda Moraa set out to launch a fintech company, she was driven by a singular mission: to solve a persistent challenge faced by most startups—bridging the working capital gap. In 2013, she made a bold leap, walking away from her corporate role at Coca-Cola to pursue her entrepreneurial dreams.

She exchanged the security and prestige of a global brand for a path defined by passion, resilience, and a determination to address some of Africa’s most pressing financial hurdles. Her journey has since reshaped the fintech sector and empowered small businesses across East Africa.

Born into a family of entrepreneurs, Hilda’s path to entrepreneurship seemed almost predestined. Her father, a businessman with a strong work ethic and rich experience in building successful ventures, played a pivotal role in shaping her worldview. ‘My father was an entrepreneur. I witnessed him support us through his business and create many additional opportunities for others as a ripple effect. That truly inspired me,’ she recalls. Witnessing his resilience and dedication instilled in her the confidence and determination to create a meaningful impact.

Her academic journey further fuelled her entrepreneurial drive. Hilda earned a Bachelor’s Degree in Business and Information Technology with a focus on Software Engineering, where she honed her technical expertise in programming and software development. ‘For me, that was the foundation of my entrepreneurship journey,’ she says.

Armed with these skills, she was ready to tackle real-world challenges, which led to the creation of her first fintech venture, WezaTele, later acquired in 2015. This milestone paved the way for her next entrepreneurial endeavour. After selling her first company, she shifted her focus to the overlooked opportunities within the fintech space.

Fintech Spark

Her time at Coca-Cola exposed her to the financial challenges faced by small and medium-sized enterprises (SMEs) in Africa. Despite being the backbone of many African economies, these businesses often struggle to access traditional financial services, limiting their growth potential. This insight ignited her determination to create a solution.

‘Fintechs present massive opportunities, especially in Africa, where inequalities and access to finance are major challenges,’ she explains. Combining her corporate experience with her understanding of market gaps, she founded Pezesha, a company addressing the financial exclusion of SMEs in Africa. Her vision was clear: to enable a digital financial ecosystem that offers affordable working capital and financial inclusion to SMEs across African countries, impacting millions of jobs to youth and more generations, leading to a network effect impact.

Her decision to enter the fintech space was motivated by market opportunity and her firsthand experience with the success of mobile financial solutions like M-Pesa, which revolutionised banking access in Kenya. She recognised that mobile money had the potential to transform how people accessed financial services.

Inspired by this innovation, she launched Pezesha to provide SMEs with access to capital. The platform also offers tools to help them manage their finances and build credit scores, guiding them up the Pezesha ladder. This approach enables SMEs to unlock financial freedom and achieve financial health.

In many African markets, SMEs lack formal credit histories or adequate documentation to assess their repayment ability. This is where Pezesha carved its niche. Hilda and her team pioneered a proprietary system called Patascore that bypassed traditional credit scoring. It utilised alternative data sources like mobile phone usage, payment histories, and transaction records to assess creditworthiness.

Credit Reimagined

By leveraging non-traditional metrics from broader data sets, Pezesha generated more accurate credit scores. This approach facilitated access to financing for small businesses that are often excluded from the conventional financial system, particularly those that are female-led. However, offering loans alone was insufficient—trust was another crucial challenge.

Many SMEs had little to no experience with formal financial institutions. To address this, Pezesha adopted a holistic approach that included financial assistance and financial literacy education. Through its platform, SMEs could access tools to track their finances, build a credit history, and make informed decisions, setting them on a path to sustainable growth. This approach quickly gained traction.

As word spread, businesses realised that Pezesha was more than a lender—it was a partner and a voice in their growth journey. To apply for a loan, applicants first download the app and complete the Know Your Customer (KYC) process by uploading essential documents like a national ID, business photos, and proof of the company.

Mobile money statements are used to generate a credit score, which ranges from 0 to 900. To qualify for a loan, applicants need a minimum score of 450. After submission, the system does its magic and credit scores and assesses the SME in real time. If eligible, the loan is approved and disbursed directly to the applicant’s mobile wallet or bank account within 24 hours.

Their use of mobile data and alternative credit scoring ensures that even businesses without traditional credit histories can access funding. The loan repayment period ranges from two weeks to three months. One business owner who has benefited is Joseph Kiemo, founder of Kiemo Touch, a beauty and hair shop in Nairobi.

His initial loan helped him expand his clothing line business, and over time, as his credit score improved, he was able to secure additional funding to launch his beauty and salon shop in Nairobi. He recalls starting the business with only two employees. ‘It was not easy. Investing a loan in a new business is a significant risk. Initially, I hired two young people, a lady and a gentleman, making it three employees including myself,’ he explains.

His business has rapidly grown and currently has nineteen employees. His success story illustrates how access to working capital—especially for entrepreneurs who lack traditional forms of collateral—can make all the difference in scaling a business. ‘I was not asked for collateral, which made it easier for me to start,’ he says. His business continues to grow, and he plans to open additional branches in Nairobi and beyond.

Caroline Nyawira Muciimi, an entrepreneur who imports construction tools and electronics from China, is another benefactor. After working for five years in a stationery store, Caroline launched her business in 2019. Her initial loan was modest, ranging from KES 15,000 to 20,000. However, as her business grew, so did her loan limit.

During the COVID-19 pandemic, when many businesses experienced financial difficulties, the flexible loan terms assisted her in managing the challenges of the economic climate. The loan enabled her to import more products, broadening her product range and scaling her business. Caroline notes, ‘I started with a small loan, but now I borrow up to KES 200,000 as my business has grown. The low interest rates, flexible loan terms, and clear communication have made a real difference.’

The success of Pezesha fintech SME growth in Africa can be attributed to its collaboration model. By partnering with a wide network of organisations—including mobile network operators, banks, and other service providers—the company has scaled rapidly. ‘When we started, we initially funded around five hundred SMEs as we refined our model,’ Hilda explains. ‘Over time, with the infrastructure and partnerships we have built, that number has grown to over 400,000 SMEs across Kenya and Uganda.’

As Pezesha expands, one key consideration is the source of its loan capital. The company secures funding through strategic partnerships with local banks, investors, and fintech ecosystems, all of which share its commitment to empowering SMEs. It also collaborates with community lending networks to reduce the cost of capital, ensuring businesses can access affordable financial support.

Its impact on women entrepreneurs is also a vital part of its mission. ‘We are proud that fifty percent of the SMEs we serve are women-led,’ Hilda says. By providing women with access to capital and financial tools, we are helping to level the playing field in an industry that has historically been dominated by men. As a female entrepreneur, she understands the unique challenges women face in business, and is committed to empowering them to succeed.

The company’s commitment to Environmental, Social, and Governance (ESG) principles is integral to its mission, ensuring its growth goes beyond profits to create lasting change. Through its focus on job creation, women empowerment, and financial inclusion, Pezesha is setting the stage for socio-economic transformation across Africa.

Barriers Navigated

Despite significant progress, Hilda acknowledges that challenges lie ahead. Regulatory constraints remain a major issue in fintech, particularly as markets like Kenya implement new regulations for fintech companies. While these regulations can limit the flexibility of fintech businesses, she sees them as an opportunity for stability and market sanitisation.

‘While it can be limiting, it also protects both the consumer and the business,’ she explains. Pezesha works hard to stay compliant with these regulations, ensuring that it operates within the legal frameworks of its markets. Beyond regulatory hurdles, there are also the challenges posed by the macroeconomic environment.

High inflation, fluctuating exchange rates, and the rising cost of funds have made capital raising more difficult. However, they have weathered these challenges by forging strategic partnerships with local banks to reduce funding costs and continue supporting the growing number of SMEs on its platform.

Looking toward the future, Hilda remains optimistic. ‘Over the next five years, we want to expand across Africa, empowering millions of SMEs and creating jobs,’ she says. Pezesha fintech SME growth in Africa is not just about providing loans—it is about building a sustainable ecosystem that supports economic growth, financial education, and long-term empowerment and prosperity.

By 2025, they plan to have reached over one million SMEs and created over 400,000 direct and indirect jobs. Through continued innovation, collaboration, and a focus on financial inclusion, Pezesha will continue to empower businesses, particularly women-led enterprises, with the tools they need to thrive in an increasingly digital and competitive world.

Edited by “Pius Okore”