Why We Invested in Cherehani — Providing Credit and Productive Assets to Women’s Micro-Enterprises in Kenya
‘Cherehani’ is the Swahili name for a sewing machine. Cherehani Africa, a Kenyan-based startup serving women who run micro-enterprises, started their journey by financing a single sewing machine. Co-Founders, Wesley Owiti and Robert Mboya, then wondered how they could “meaningfully touch lives through a sustainable and scalable approach,” leading to the founding of Cherehani Africa in 2015.
There are around 10 million unregistered women-owned micro-enterprises in Kenya, with an annual credit gap estimated to be greater than $1.5 billion. Minimal asset ownership, low financial literacy, and a lack of credit history are barriers to socioeconomic mobility and access to credit for women and adolescent girls.
The past two decades of rapid digitization and increasing smartphone adoption in emerging markets such as Kenya have created a transformative opportunity for women’s financial inclusion. Cherehani seized this opportunity, bringing to life a business model that innovatively offers various financial services and productive assets to previously underserved communities.
Impact
Cherehani leverages mobile-based technology to provide credit and distribute personalized financial literacy resources to women and adolescent girls who own and operate micro-enterprises. While credit is provided on an individual basis, Cherehani embraces a human-centered approach by structuring loans around membership and participation in locally registered groups of 10–25 members who operate their businesses within close proximity. These community groups, or ‘Chamas’, allow for micro-savings initiatives that drive financial inclusion, and simultaneously create organic peer-to-peer pressure which is vital for Cherehani’s loan repayment, while enabling a robust business ecosystem in underserved markets.
As of July 2023, Cherehani has over 13,000 eligible customers on its platform and has delivered financial products and services for 20k+ women and adolescent girls in rural areas in Africa. Over 50% of their customers earn between $101-$150 monthly, producing an average gain in monthly income of $62.
Cherehani also offers ‘Water, Sanitation & Hygiene Loans’ to provide productive assets such as water tanks at affordable rates to their customers. These water tanks enable women entrepreneurs in rural areas to transition from reliance on rain-fed agriculture to more productive and reliable irrigation systems. The tanks also empower entrepreneurs in the water vending business to increase their productivity and income.
In rural Kenya, where only 22% of households are connected to piped water infrastructure, women often acquire these water tanks for general domestic use. Cherehani also educates customers concerning water footprint, hygiene, and sanitation as customers use their assets for domestic productivity, retail profits, and agricultural activity. As water becomes less accessible due to droughts, forest degradation, population growth, and lack of water supply management, water tanks improve access to clean water for both home and commercial use, positioning Cherehani at the intersection of impact and profitability.
Smart Asset Financing™ with Cherehani
Untapped Global has partnered with Cherehani to finance their water tank offering as a productive asset to their customer base. According to Untapped Senior Investment Officer, David Kleiterp, Cherehani is a good fit for Untapped’s Smart Asset Financing model as they “give consumers the ability to more easily afford productive assets by offering a 12-month payment plan.”
Further, Cherehani’s digitization of payments and streamlined data collection creates a strong alignment of strategy and go-to-market plan between Untapped and Cherehani. “We really believe that through our investment, we can help them reduce the cost of acquisition of the assets and pass these prices onto their consumers, which subsequently will allow Cherehani to scale further and quicker,” David added.
Cherehani’s use of local water tank manufacturers reduces deployment times, and the Cherehani team’s extensive background and expertise in microfinancing and banking are additional reasons why Untapped invested in their mission. Untapped has also recognized a strong multiplier effect in Cherehani’s model, as creating individual impact through Cherehani’s financial offerings trickles down via multiple streams to families, communities, and savings groups alike. Untapped views Cherehani not only as a viable business model for Smart Asset Financing, but also as a regional driver for multiplying impact, economic empowerment, and entrepreneurship in emerging markets.
About Untapped Global
Untapped is reshaping profitable investing in emerging markets. We offer data-driven investment opportunities for global investors to finance high-growth businesses across emerging markets. Our innovative Smart Asset Financing investment model tracks the usage and revenue streams of productive assets in real time, offering investors transparent, secure, and profitable opportunities to invest and grow community wealth in emerging markets.
We provide asset financing for tech-enabled companies in emerging markets. For more information, reach out to our team at info@untapped-global.com
