Kenyan fintech Flowt is using AI to help small businesses get working capital

Kenyan fintech startup Flowt is using AI to assess small businesses for working-capital loans, using the financial information they already generate through banks, accounting systems and M-Pesa. The Nairobi-based startup has raised an undisclosed pre-seed round from Delta40 Fund I and Impacc, with grant support from the Argidius Foundation. Flowt was founded by Elana Laichena and is focused on small and growing businesses, particularly those operating in areas such as agriculture, manufacturing, renewable energy and clean cooking.

Flowt is looking at how businesses actually move money

The startup’s platform allows businesses to connect their accounting software or provide bank and M-Pesa statements. Flowt then uses that information to assess revenue, cash flow and other transactions. AI and machine learning tools are used to analyse the data. The idea is to give the company a better view of how a business is performing before deciding whether it should receive working capital. This is particularly relevant for smaller businesses that may be making regular sales but do not have enough property or other assets to offer as security for a traditional bank loan.

Its first facility has already been issued

Flowt has provided its first working-capital facility to GreenBay, a Kenyan business that refurbishes and sells pre-owned household appliances and solar products. The amount of the facility has not been disclosed. Flowt says it has also tested its platform with more than 15 potential borrowers. The businesses in that pipeline represent between $1 million and $2 million in potential loan demand. That figure refers to the amount those businesses could potentially borrow. It is not the amount Flowt has raised.

Flowt wants to build a $1 million loan book

The startup is now looking to grow its lending business in Kenya. It wants to build a loan book of up to $1 million by the end of 2026. To do this, Flowt is looking for additional equity, debt and repayable grant funding. The company is still early in its lending business, so its ability to grow will depend on how those first loans perform. The repayment record will also give Flowt a better indication of whether the financial information it uses is useful when deciding which businesses to lend to.

M-Pesa transactions can give lenders a useful record of how money moves through a business. A business can use the service to receive payments from customers, pay suppliers and handle other day to day transactions. Flowt combines this information with bank and accounting data rather than relying on a single source. For businesses with limited financial records, that can give a lender more information to work with. Flowt has raised funding and issued its first facility, but the lending business is still small. The company now needs to show that it can put more money into businesses while keeping defaults under control. That will become clearer as it moves beyond its initial group of borrowers. For now, Flowt is building its lending business around financial data that many small businesses already produce. Its first facility to GreenBay is the start of that process.