Dealflow | April 1, 2024

Uganda’s Credify raises early funding to address Africa’s trade finance gap

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

Small businesses that source products from overseas pay for the goods well before they sell them. In Africa, where small businesses already face a capital shortage of $330 billion annually, the traditional import process “typically locks up their capital for two months, preventing them from making other investments in their business growth,” explained Selma Ribica and Agnes Kisuule of First Circle Capital.

The women-led venture fund cut a pre-seed check to Credify, which allows businesses to manage, track and secure credit for import orders. It’s First Circle’s first deal in Uganda.

Trade finance

Development finance institutions are seeking to increase trade financing in Africa by derisking lending for banks. British International Investment last week provided $100 million to the Eastern and Southern African Trade and Development Bank for on-lending to bolster the flow of agricultural inputs and other essential goods.

Only 30% of bank capital flows to Africa’s small businesses, First Circles estimates.

Credify provides credit and also handles the exchange of goods between buyers and sellers. Its operations in China “verify supplier quality, simplify the process on the sending port’s end, and secure a foothold on major supply routes,” said Ribica and Kisuule.