Uganda agritech startup Emata secures $2.4 million in seed funding
In East Africa, Small and Medium Enterprises (SMEs) are a major source of employment and contribute significantly to GDP. But, the growth potential of these enterprises is often stifled due to their limited access to credit. In the agricultural sector, this challenge is particularly acute. According to the "The
In East Africa, Small and Medium Enterprises (SMEs) are a major source of employment and contribute significantly to GDP. But, the growth potential of these enterprises is often stifled due to their limited access to credit.
In the agricultural sector, this challenge is particularly acute. According to the "The Economics of Agri-SME Lending in East Africa" report by Dalberg, agri-SMEs in the region face an acute need for finance tailored to their specific requirements. Even though agriculture accounts for 25-30% of the GDP in countries like Kenya, Rwanda, Tanzania, Uganda, and Zambia, it receives a mere 2-7% of total bank credit.
In order to address this lack of agricultural financing in East Africa, Emata, an agri-loans startup in Uganda, has raised $2.4 million in a seed funding round to broaden its affordable loan service to farmers in East Africa.
This funding comprises a mix of $1.6 million in debt and $800,000 in equity financing from notable investors, including African Renaissance Partners, Norrsken Accelerator, Draper Richards Kaplan Foundation, as well as angel investors such as Marcus Boström and Zephyr Acorn.
Emata's approach to revolutionizing agricultural lending in the region involves streamlining the process of loan collection for thousands of smallholder farmers through partnerships with cooperatives and farmer-based organizations. Through its no-collateral smallholders can now access loans at rates that are five times more affordable than the unofficial loans they have typically relied on.
The new funds will be used to expand its offerings within its debut market, Uganda and new territories beginning in Tanzania.
