Kenyan SME Lender 4G Capital Reports 92% On-Time Repayment Rate Despite Banking Sector Struggles

Kenyan small-business lender 4G Capital has reported that 92% of its customers repay loans on time, a remarkable achievement as the country's banking sector faces its highest non-performing loan ratio in years.The Central Bank of Kenya reported a gross non-performing loan ratio of 15.5% in February, highlighting widespread stress across the wider banking system. Against this backdrop, 4G Capital's performance makes it a notable outlier in a strained credit cycle.Founded in 2012, 4G Capital provides micro and small enterprise lending in Kenya and Uganda. The company says it has disbursed $889 million across 6.8 million loans to more than 723,000 customers, processing roughly 120,000 loans each month.Typical working-capital loans range from $30 to $2,000 and are processed entirely through mobile money. The flagship product, Upia, offers 30-day loans from KES 5,000 ($32) to KES 149,999 ($970), with pricing that adjusts as customers build repayment history.Chief Executive Julian Mitchell attributes the company's strong performance to its rigorous underwriting process before funds are disbursed."We operate what we call a 'touch-tech' model," Mitchell explained. "If you own a shop in Kawangware and need working capital, one of our loan officers will visit your business. We don't believe first-time lending to micro and small businesses should be done purely remotely."Loan officers assess stock turnover, supplier cycles, and daily sales before recommending loan sizes. All data captured during visits is processed in real time through the company's bespoke core platform, with credit decisions powered by an internal decision engine called EVA.Unlike fully digital lenders such as Tala and Branch, 4G Capital maintains field operations alongside automated scoring. This hybrid model increases operating complexity but aims to reduce early-stage defaults by matching loan sizes to observed cash flow."Repayment performance starts at the point of sale," Mitchell noted. "The work we do upfront—visiting the business, understanding how it operates, and setting the right loan size—is critical."New borrowers begin with short 30-day cycles and qualify for higher limits after successful repayment. The company also provides 21-day retail stock credit, supplying inventory rather than cash and tying repayment to sales turnover.4G Capital reports that 72% of its customers are women and 81% operate in rural markets. The company claims average customer revenue increases of 82% and says borrowing capacity typically doubles over 36 months.The lender is funded almost entirely in local currency through commercial paper issuance and relationships with local banks, supplemented by debt from impact investors. In 2024, it launched a KES 500 million ($3.2 million) corporate debt programme through Dry Associates Investment Bank.