African neobank 4G Capital has secured $18.5m in its Series C funding round from private equity fund Lightrock.

4G Capital will use the funding to scale its last-mile finance and enterprise solutions to micro and small enterprises in Kenya and Uganda.

The proceeds will also be used by the company to expand its retail finance service, called Kuza, which helps store-owners, FMCGs and distributors in improving their sales.

4G Capital CEO and founder Wayne Hennessy-Barrett said: “Lightrock and 4G Capital share a complete alignment of purpose and mission. They bring unrivalled experience of Africa and emerging markets. This capital will have a transformative effect in enabling us to scale the best products and services to the world’s most important sector.”

The Mauritius-headquartered neobank provides 100% unsecured business loans, financial literacy training and access to digital solutions.

4G Capital claimed that since it was founded in 2013, it has offered working capital loans to over 1,750,000 small businesses valued at more than $230m, with nearly 94% repayment rates.

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Lightrock partner Shakir Merali said: “What is needed on the continent is investment capital to back companies with the mission of financial empowerment. 4G Capital provides liquidity to the vast market of economically generative businesses – the mobile phone repairers, hairdressers and food sellers – that dot the landscape of Africa.

“The systemic value of improving lives is compounded, as productive employment leads to economic outcomes and better education and health outcomes in the communities these businesses serve.”