{
  "id": 9334194,
  "title": "Why African startups can be profitable and still look too risky to finance",
  "url": "https://urgent.news/2026/09/23/why-african-startups-can-be-profitable-and-still-look-too-risky-to",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-23T12:10:48.000Z",
  "source": {
    "name": "TechCabal",
    "slug": "techcabal",
    "url": "https://techcabal.com/2026/09/23/africa-financing-gap-business-data-visibility/"
  },
  "original_language": "en",
  "account": "At the recent GEC+Africa conference in Cape Town, it became clear that the problem of financing for African businesses may not stem from a lack of capital, but rather a lack of financial visibility. While there are ample financial institutions, venture capital funds, development finance institutions, and alternative lenders in Africa, much of the economic activity is not structured in a way that lenders can easily assess risk.\n\nSmall businesses may have paying customers, regular transactions, invoices, and purchase orders, yet still come across as risky to lenders because the data is scattered across various systems. Startups may be growing rapidly but lack the operational history needed for investors to evaluate them. Gig workers may earn consistently but appear irregular because their income does not resemble traditional salaries.\n\nThis issue was highlighted by several discussions at the conference, with examples pointing to the same problem from different angles. African Bank, for instance, is working on turning fragmented small-business activity into information that lenders can use. The country’s micro, small, and medium-sized enterprise (MSME) financing gap is estimated to be around R350 billion, despite the number of small-business funders having more than doubled in recent years.\n\nThe lack of financial visibility is particularly pronounced among smaller and informal businesses. Only 7% of MSMEs in South Africa use formal financial services providers to start their businesses. To bridge this gap, African Bank is moving beyond traditional lending and offering products such as invoice discounting and purchase-order financing. By integrating with the operational systems of businesses, African Bank can gather data such as payroll, tax filings, and purchase orders, which can help assess affordability, credit status, and risk appetite.\n\nHowever, the challenge lies in connecting the dots between various data points scattered across different systems. While the data is available, the distance between information and decision-making remains significant. Businesses with digital financial services are more likely to have the necessary data, but even then, accuracy, accessibility, and usefulness of the information are crucial.\n\nIn the venture and alternative finance sectors, a similar gap exists. Keyo Ventures, for example, focuses on businesses at the intersection of technology, infrastructure, and the green economy. To create a more accurate view of these companies' performance, Keyo integrates with their operational systems to track productivity, revenue, risk, and scalability. This approach allows for a more continuous assessment of the business, going beyond periodic financial reporting alone.",
  "summary": "Africa’s startup funding problem may be less about a shortage of capital than a shortage of businesses investors can understand, assess and back.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}