The platform offers business owners a centralised portal to consolidate and manage the revenues flowing into their accounts Small and medium-sized enterprises (SMEs) face a myriad of challenges when attempting to access traditional financing, driving a pressing need for unique, tailored lending solutions.
Recognizing this gap, Faulu Microfinance Bank, Kenya's largest microfinance institution with a dominant 39.7 percent market share as of last year, is shifting its strategic focus to empower traders and small businesses across the country. Over the last two years, Faulu has been undertaking a major change in strategy.
Previously focused on retail banking and offering loans primarily backed by payslips, the institution is now positioning itself dynamically as a trader's bank. The new focus centers heavily on providing asset finance, working capital, and specialized trade finance loans designed for modern business realities.
According to Gloria Kositany, Senior Manager of Marketing and Communications at Faulu Microfinance Bank, the modern trader operates in a highly fragmented digital landscape. Most traders receive business payments across various platforms, including paybills, till numbers and cash.
“A primary pain point for these business owners is consolidating these scattered payments and leveraging them to secure formal credit, especially when they lack traditional collateral like land or vehicles,” she says. To address this, Faulu has introduced a comprehensive merchant ecosystem.
The platform offers business owners a centralized portal to consolidate and manage the revenues flowing into their accounts, drastically simplifying financial reconciliation. Crucially, the bank uses this portal to analyze a business's actual cash flows, allowing Faulu to lend against real-time operational data instead of requiring heavy physical assets as security.
Trade finance has emerged as another core pillar of Faulu's new approach.