Kenya: Kenya’s Cellulant targets SMEs to accelerate growth

Pan African digital payments company Cellulant has announced plans to shift its focus to small and medium enterprises.

The company aims to increase its merchant acquisition growth to 50,000 this year from the current rate of about 1,000, Chief Executive Officer, Akshay Grover said in an interview.

Investors have been flocking into African financial technology firms due to rapid growth in services like cash transfers between bank accounts and mobile phone wallets.

Cellulant, which has previously raised funds from investors like Velocity Capital and TPG’s Rise Fund, is in the middle of a $100 million Series D fundraising round, partly to finance the shift to SME clients, Grover said.

With the target businesses being those with a monthly turnover equivalent to less than $30,000, the move will open the flood-gates to hundreds of thousands or even millions of small businesses in its top eight African market.

Cellulant has traditionally catered to large scale merchants but now it wants to open its digital Tingg payments processing platform to pop shops, restaurants and individual online retailers.

“We are going to have a platform where you can come in and start accepting payments,” Grover said, adding that signing up will be as easy as getting an email or dropbox account, said Grover.

The 19 year old firm, which is in 35 African markets, will roll out the SME service in Kenya, Nigeria, South Africa, Egypt, Uganda, Ghana, Tanzania and Zambia.

The Tingg platform collates digital payments from various mobile money services like Safaricom’s M-Pesa, credit cards and even bank debits, easing the work of merchants.

Merchant payments volume, which accounts for 70% of Cellulant’s revenue, doubled to $1 billion last year, Grover said, and it is expected to grow by 200% this year.

The company will also start lending to its merchants to boost their working capital.

“It is very difficult for some of these merchants to get loans for their business from the banking system,” Grover said.

It will also roll out a new lending product to the merchants’ customers, allowing them to pay for goods or services in instalments.

“Data analytics is at the heart of this. That is how we will assess the creditworthiness of either the merchant or the individual we will lend to,” the chief executive said.