A Danish FinTech company has launched in Africa, providing revenue-based financing for Facebook adverts to small businesses, and connecting them with experts to ensure they see a return on investment.
Launched last year and active in Nigeria and Kenya, GrowthBond provides microloans for Facebook ads to small businesses, evaluating companies based on their Facebook Business account and lending money to cover advertising expenses and freelance marketing experts from its community.
The average first loan size is US$100, while the second loan is US$1,000. Eighty per cent of the loan covers Facebook advertising costs, with the 20% going to the marketing experts that make sure the adverts produce the best results.
“We have provided growth capital to over 900 companies, mostly in Lagos, Nigeria, and Nairobi, Kenya. We also educate and employ local specialists who provide marketing services for funded companies. We’re aiming to finance 60,000 companies by 2022,” said Arina Zhukova, communications manager at GrowthBond.
The company was launched to combat the fact that, due to a lack of collateral, small businesses in Africa struggle to access the capital needed to grow their online businesses. Once that capital is obtained, they often also lack the necessary expertise, which is why GrowthBond has built a community of specialists, mostly in Kenya, Nigeria and Palestine.
GrowthBond, which takes a fixed 20% commission from every loan, is in the process of expanding its operations to Tanzania, Ghana, and South Africa.