Mogo, a financial services firm, has pledged to provide up to Sh7 billion in credit to small businesses and individuals in Kenya who have been historically excluded from the formal financial system. The company’s productive lending aims to bridge the gap in financial inclusion by providing affordable credit to individuals and groups that have faced challenges accessing credit from traditional financial institutions. The flexible loans will offer longer repayment periods and the lowest monthly payments through the company’s “best price guarantee” brand promise.
Mogo’s move to target underbanked Kenyans is a crucial step towards creating new opportunities and supporting the growth of small businesses, which form a critical component of the Kenyan economy. According to the Kenya National Bureau of Statistics, MSMEs account for over 90 percent of all businesses in the country. However, many of these businesses struggle to access credit due to factors such as lack of collateral, long loan processing times, insufficient credit history, or high interest rates.
Domas Mineikis, the country manager for Mogo Kenya, believes that productive lending will help to promote entrepreneurship, create jobs, and drive economic growth. He noted that the company’s commitment to significantly elevate small businesses in the markets it serves aligns with its long-standing goal of using its resources and capacity to help shape a better future and contribute to progress in the country.
Mogo’s announcement is a timely intervention that seeks to address the challenges faced by many small businesses and individuals in Kenya. With up to 89 percent of its active customers being self-employed and around 70 percent of them seeking financing opportunities, Mogo’s move to extend credit to underbanked Kenyans is a welcome development that could potentially unlock the economic potential of many individuals and groups that have been left behind.