KisStartup – Compilation and Analysis
If Pezesha is viewed simply as a typical SME lending fintech, it is easy to miss the true essence of its model. Pezesha did not build its company around “selling loans,” but around building embedded finance infrastructure for the SME sector—a sector that accounts for the majority of jobs and livelihoods in Africa, yet has been neglected by formal financial systems for decades.
This is precisely why Pezesha has been able to expand rapidly, moving beyond Kenya and addressing multiple “national-level challenges” at once: inclusive growth, supply chain stability, and economic resilience against shocks.
The Starting Point: A Very “Local” but Structural Problem
Pezesha was founded in Kenya in 2017, in a context where millions of micro, small, and medium enterprises (MSMEs) could not access working capital—even though they had real cash flows, real goods, and real markets.
The issue was not demand for credit, but rather data gaps and high underwriting costs that made it inefficient for banks to lend.
Instead of trying to become a “digital bank for SMEs,” Pezesha chose a different path: positioning itself between SMEs, banks, and investors, using real transaction data to bridge the credit gap. From the beginning, its model carried the DNA of an intermediary infrastructure rather than a retail lending product.
Kenya became its core market not only because of scale, but because it hosts one of the most mature fintech ecosystems in Africa. Once Pezesha proved that Kenyan SMEs could borrow, repay, and efficiently recycle capital—if assessed correctly—it created a blueprint that could be replicated in countries with similar economic structures.
Embedded Finance: Why Pezesha Can Scale Without Organizational “Overload”
The key to Pezesha’s business model is that it does not retail individual loans. Instead, it builds APIs and credit-scoring platforms that integrate directly into major B2B platforms—where SMEs are already embedded in their daily workflows.
When a merchant orders inventory on an agricultural distribution platform, sells on a marketplace, or procures medicine through a pharmacy network, Pezesha’s loan appears precisely at the moment of business need—not as a separate financial product.
Integrations with partners such as Twiga Foods, Jumia, Marketforce, and Zendawa allow Pezesha to reach tens of thousands of SMEs through a single B2B contract.
From a structural standpoint, Pezesha does not “conquer individual SMEs”; it partners with platforms that have SMEs at their core. This crucial distinction has enabled its expansion into Uganda, Ghana, and Nigeria without building bulky sales teams or facing massive customer acquisition costs like retail fintech lenders.
Market Expansion: From Kenya to Africa Through an “Infrastructure + Partnership” Logic
Pezesha’s expansion strategy is clear: deeply learn from one core market, then replicate the model through partnerships—not by replicating the organization itself.
After Kenya, Pezesha expanded into Uganda, followed by Ghana and Nigeria—markets with similar SME structures but differing regulatory frameworks and financial behaviors. Instead of independently securing lending licenses and raising capital in each country, Pezesha partners with local banks and financial institutions. These institutions provide capital, while Pezesha provides technology, data, and risk-scoring capabilities.
This approach allows Pezesha to scale horizontally at high speed while reducing regulatory and balance sheet risks. It is not the ultimate bearer of credit risk, but rather the optimizer of capital flows toward SMEs.
Capital, Growth, and Why Investors Are Betting on Pezesha
The $11 million funding round in 2022 (combining equity and debt) was not primarily for expanding loan volume, but for investing in API infrastructure, data capabilities, and partner expansion across East and West Africa.
This explains how, within a short period, Pezesha increased its disbursement volume by thousands of percent and served hundreds of thousands of SMEs without significantly expanding its organizational size.
From an investor’s perspective, Pezesha is not valued as a lender, but as a financial infrastructure company. Once infrastructure is embedded into supply chains, commerce, and healthcare, switching costs become nearly zero—while long-term network value compounds over time.
Financial Education: The Piece That Prevents Systemic Collapse
One particularly noteworthy—and nationally significant—aspect is that Pezesha does not treat financial education as peripheral CSR. For them, it is a prerequisite for sustainable credit systems.
In many emerging markets, Pezesha provides financial literacy programs, debt management advisory, and credit profile improvement support before extending loans.
This reduces non-performing loans, strengthens partner bank confidence, and creates a positive loop:
Stronger SMEs → Better data → Lower-cost capital → More stable local economies.
The National-Level Problem Pezesha Is Addressing
At a national level, Pezesha tackles a fundamental question: how to channel formal capital toward the sector that generates the most employment, rather than concentrating it among large corporations.
When SMEs receive working capital at the right time, agricultural, healthcare, and retail supply chains become more sustainable; incomes become more stable; and economic resilience improves.
More importantly, Pezesha demonstrates that governments do not necessarily need to build every piece of SME financial infrastructure themselves. Startups can act as “soft infrastructure,” connecting banks, digital platforms, and small businesses with greater speed and adaptability.
Long-Term Vision: Fintech as a New Layer of Public Infrastructure
Looking further ahead, Pezesha is not just an African story. It represents a new class of startups where fintech is no longer merely a “lending app,” but embedded financial infrastructure—similar to how payments or cloud services became foundational layers of the digital economy.
For Vietnam and other developing countries, the lesson from Pezesha is clear: solving the SME financing problem should not start with “lending more,” but with building data infrastructure and platform partnerships—so that capital flows to the right place, at the right time, at the lowest possible cost.
