4G Capital Ltd

In the dynamic economic landscape of Mauritius, micro, small, and medium-sized enterprises, commonly known as MSMEs, form the backbone of local commerce and employment. Despite their significant contribution, these businesses often face hurdles in accessing conventional financing, a gap that digital lenders like 4G Capital Ltd aim to fill. This article provides a comprehensive and objective review of 4G Capital Ltd, specifically tailored for potential borrowers and financial observers within Mauritius.

Understanding 4G Capital Ltd in Mauritius

Established in 2013, 4G Capital Ltd is a private limited company registered in Mauritius, although specific registration details such as its exact number and date are not publicly verified. The company’s core mission revolves around providing unsecured working-capital microloans alongside bespoke financial literacy training, primarily targeting MSMEs in underserved, "data-dark" sectors across Africa. While its primary operational footprint lies in Kenya and Uganda, 4G Capital maintains a presence in Mauritius, serving as a customer support hub located in Grand Baie.

The company is privately held, with significant investment backing from entities such as Lightrock, Citibank, and Ceniarth, having notably secured $18.5 million in Series C funding in March 2022. This financial strength underscores its capacity to scale and sustain its operations. The executive team includes Founder and Executive Chairman Wayne Hennessy-Barrett, Chief Executive Officer Julian Mitchell, Chief Operations Officer Roseanne Masila, and Chief Technology Officer Edgar Rivera, bringing a wealth of experience to the fintech sector.

4G Capital’s business model is distinctly hybrid, blending advanced digital lending technologies with high-touch customer support. This approach aims to not only disburse funds efficiently but also empower entrepreneurs through crucial financial education, fostering sustainable growth for their businesses.

Products, Rates, and the Application Journey

4G Capital offers a range of financial products designed to meet the varying needs of MSMEs:

• Working-Capital Loans (“4G Growth”): These are short-term, unsecured loans intended to address daily cash-flow requirements, helping businesses manage operational expenses and seize immediate opportunities.
• KUZA Retail Financing: Specifically designed for Fast-Moving Consumer Goods (FMCG) distributors, this product offers 21-day stock credit. Loan amounts typically range from approximately USD 40 (KSH 5,000) to USD 2,800 (KSH 360,000), providing crucial liquidity for inventory management.
• NXTGEN Enterprise Loans: While details remain unverified, this product is positioned as mid-range capital for growing MSMEs, suggesting a step up from microloans for businesses with more substantial needs.

Interest Rates and Fees: Prospective borrowers in Mauritius should note that interest rates typically range from 3% to 7% monthly flat rate, which translates to an approximate Annual Percentage Rate (APR) of 36% to 84%. The exact percentage can vary based on the specific product, the borrower’s risk profile, and the loan tenure. While these ranges are provided from the company’s general operations, specific rates for Mauritius would require direct confirmation.

Loan terms for microloans generally span 7 to 30 days, with some business loans under development potentially extending up to 90 days. Repayment schedules are flexible, often arranged weekly or at the loan’s maturity date within the agreed term window.

Regarding fees, an origination or processing fee of 1% to 3% of the loan amount typically applies, depending on the product. For late payments, a flat fee of 2% on overdue installments is charged per week. Importantly, most micro and retail products offered by 4G Capital are 100% unsecured. Larger facilities, however, might necessitate distributor or corporate guarantees.

Application Process: Applying for a loan with 4G Capital is primarily digitally driven:

• Mobile App: Borrowers can use the proprietary Android or iOS applications to apply directly.
• Web Portal: Online applications are also possible via the company’s website.
• Field Agents: While 4G Capital utilizes over 1,000 relationship managers across 192 physical locations in Kenya and Uganda, the extent of field agent presence for direct application support in Mauritius is likely more limited, with digital channels being the primary route.

The Know-Your-Customer (KYC) and onboarding process involves digital ID verification, typically through national ID scanning via the app. For business registration and assessing credit history in informal sectors, face-to-face verification by agents may also be part of the process. 4G Capital employs a sophisticated, proprietary machine-learning algorithm for credit scoring and underwriting. This algorithm analyzes mobile-money transaction data, distributor sales records, and behavioral metrics to optimize loan terms and effectively mitigate risk.

Loan disbursements are efficient, primarily conducted through mobile money transfers (e.g., local Mauritian mobile money platforms if available) and direct bank transfers via local clearing systems. In remote areas, agent-facilitated cash disbursements might be an option, though less common in a digitally advanced market like Mauritius.

Technology, Regulation, and Market Standing

Mobile App Features: The 4G Capital mobile application, available on Android and iOS (Mauritius availability generally expected), offers a user-friendly interface for loan applications, repayment scheduling, access to digital training modules, and viewing transaction history. While consolidated public ratings are not readily available, internal reports suggest a Net Promoter Score (NPS) exceeding 72, indicating strong customer satisfaction. Occasional app downtime and agent responsiveness in remote areas have been noted as areas for improvement in other markets, which Mauritian users might consider.

Regulatory Status in Mauritius: 4G Capital operates as a nonbank credit provider. In Mauritius, its licensing status is currently unverified, though it is presumed to operate under local nonbank lending regulations. The company adheres strictly to anti-money-laundering (AML) and know-your-customer (KYC) requirements in all its operating countries. It is also a Certified B Corporation since September 2019, reflecting its commitment to high standards of social and environmental performance, transparency, and accountability. To date, no public penalties or enforcement actions against 4G Capital have been identified.

Consumer Protection: 4G Capital emphasizes transparent fee disclosures and offers flexible repayment adjustments for cases of hardship, demonstrating a commitment to responsible lending practices.

Market Position and Differentiation: In East Africa, 4G Capital is a leading digital microfinance provider, holding an estimated 10% share of the unsecured MSME loan market in Kenya. While its specific market share in Mauritius is not publicly available, its presence contributes to the growing digital lending ecosystem. Its key competitors in the broader digital lending space include Jumo, Branch, Tala, and FairMoney.

4G Capital differentiates itself through several unique aspects:

• A high-touch hybrid model that combines digital efficiency with personalized field agent support (where applicable).
• Embedded business training modules that go beyond just lending, aiming to improve borrowers’ financial literacy and business acumen.
• A sophisticated machine-learning credit engine, integrated with Google Cloud, enabling real-time risk management and tailored loan offerings.

The company boasts a substantial customer base, having served over 600,000 MSMEs across its markets, with 5.5 million loans delivered in total, and notably, approximately 72% of its borrowers are women. Its financial literacy initiatives and lending programs have shown significant impact, with an average borrower revenue growth of 82% year-on-year through partnerships like KUZA financing.

Practical Considerations for Mauritian Borrowers

For Mauritian entrepreneurs considering 4G Capital Ltd for their financing needs, here is some practical advice:

1. Assess Your Needs Carefully: Before applying, have a clear understanding of your business’s financial requirements and your capacity for repayment. Only borrow what you genuinely need and can comfortably repay within the stipulated terms.
2. Understand All Terms and Conditions: While 4G Capital strives for transparency, it is crucial to thoroughly read and understand the interest rates, fees (origination, processing, late payment), and repayment schedule specific to your loan offer. Do not hesitate to seek clarification if any aspect is unclear.
3. Verify Mauritius-Specific Licensing: Given that 4G Capital’s licensing status in Mauritius is currently unverified, it is prudent for potential borrowers to independently confirm the company’s full compliance with local financial regulations. This ensures you are dealing with a fully regulated and legitimate lender.
4. Utilize Financial Literacy Resources: 4G Capital integrates financial literacy training into its offering. Mauritian borrowers should actively engage with these resources to enhance their business management skills and improve their chances of sustainable growth. This added value sets 4G Capital apart from many direct lenders.
5. Compare with Other Options: The digital lending space in Mauritius is evolving. While 4G Capital offers unique features, it is always wise to compare their offerings with other local financial institutions and digital lenders to find the most suitable and cost-effective solution for your specific business.
6. Ensure Repayment Capacity: With interest rates that can be significant (up to 7% monthly), ensuring a robust repayment plan is paramount. Defaulting on a loan can negatively impact your business’s credit standing and incur additional late payment fees.

4G Capital Ltd presents a compelling option for Mauritian MSMEs seeking agile, unsecured working capital, especially those who may find traditional bank loans challenging to access. Its blend of digital convenience, machine-learning-driven credit assessment, and a strong emphasis on financial education offers a holistic approach to supporting entrepreneurial growth. However, as with any financial commitment, due diligence and a clear understanding of the terms are essential for a positive borrowing experience.