The Kenyan asset acquisition market has witnessed significant growth in recent years, driven by the emergence of fintech-based firms providing innovative and quality solutions. Traditionally, asset acquisition options were limited to disciplined savings mobilization through banks or other financial institutions. At the enterprise level, asset financing solutions, including leasing options, have been available for several decades. However, there was always a gap in accessible solutions catering to the micro end of the market.
In the 80s and 90s, the micro end of the market was primarily served by hire purchase entities such as Africa Retail Traders (ART), KuKopesha, and Kenya Credit Traders (KCT). These entities operated brick-and-mortar outlets, bridging a crucial gap by allowing civil servants, teachers, and other individuals to own assets and meet their physiological needs. Through these hire purchase providers, many families acquired essential items like galvanized iron roofing sheets, electronic equipment, solar panels, and motorbikes, paid off through a check-off system with their employers.
Today, modern hire purchase solution providers are now fashioned as Asset Finance FinTech solution providers. Companies like Watu, Hakki, Mogo, and M-Kopa are now major players in this market segment. Unlike traditional financial institutions, these firms are not digital lenders, banks, microfinance banks, or deposit-taking finance institutions. Instead, they operate under the Hire Purchase Act and leverage technology for credit scoring and administration. This approach allows them to enjoy better operating efficiencies and actively bridge the asset acquisition gap in the micro-enterprise and individual market segments.
Access to credit continues to be a significant challenge to accelerated economic development in Kenya and many other developing countries. Many informal sector players lack collateral and the formal instruments needed to access credit from mainstream financial institutions. As a result, they are often forced to turn to predatory financing options such as shylocks, who charge very high-interest rates. This lack of collateral and financial inclusion hampers their economic and social aspirations.
While large corporates can easily access leasing and related hire purchase options, small-scale and micro players have historically faced difficulties. However, reputable Asset Finance FinTech firms are now providing much-needed relief. These firms offer solutions that allow individuals to own assets such as vehicles, motorbikes, and mobile phones with flexible weekly payment plans and a minimum down payment. The hire purchase loan advanced by these firms includes the retail price of the asset and value-added services such as GPS tracker fees, log book transfer, comprehensive insurance policy, customer service, and a 24/7 emergency response team.
By bridging the gap between people and accessibility to flexible financing, Asset Finance FinTech firms are playing a crucial role in promoting financial inclusion. Their operations are based on ethics, integrity, and self-regulation, ensuring that they maintain their mission of changing the future of last-mile mobility and household financing in Africa. Using tech solutions and financial intermediary options like mobile money, these firms continue to support the dreams of the unbanked and underserved, helping them change the course of their lives and achieve financial independence.
The impact of Asset Finance FinTech firms is evident in the growing number of individuals and small businesses that have benefited from their services. By providing accessible and flexible financing options, these firms are helping to drive economic growth and development. They are empowering individuals and small businesses to invest in essential assets, improve their livelihoods, and contribute to the broader economy.
In conclusion, the evolution of hire purchase solutions into Asset Finance FinTech providers represents a significant advancement in the financial inclusion landscape
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