Premier Credit – Asset financing business
Premier Credit, an MSE-lending business in Kenya, Uganda and Tanzania, has continued to expand and broaden its “Partnership Products” programmes, its high impact asset financing programmes.
Premier Credit has financed 500 bio-gas digesters in Kenya since 2014. Each digester uses 2 kg of cow dung per day, approximately the product of two cows. Each digester produces three cubic metres of gas each day which is used by most households for cooking. The bi-product is a slurry that can be used as a fertiliser, especially for higher value crops such as vegetables. The bio-gas digesters are an Indian technology. The loans have a 12-month maturity and the marketing of the product is mainly by word of mouth. As well as supporting rural families, the product also supports carbon abatement.
Premier Credit also finances boda boda, motorbike taxis (as pictured), which are a vital form of transport for communities across East Africa. They significantly reduce journey times for rural communities that live far from the main roads. In addition, they are used to deliver cash crops from the fields to the main roads where they can be collected by larger vehicles.
The other critical products include water tanks, which are focused on the drier regions in Eastern Kenya, as well solar product which is marketed in partnership with d.light which sells systems. Many Kenyan households do not have access to running water and buy 20-litre jerry cans of water from water wagons each day to cover all household needs. With a water tank and guttering funded by Premier Credit, households can harvest enough water during the rainy season to meet their requirements through the long dry period and the instalments on the 12-month loan is less than the cost of buying two x 20-litre jerry cans per day. The solar system provides power for households for lighting, television and radio charging and mobile phone charging. Premier Credit uses its network to support the marketing of d.light systems, with significant take-up from existing customers.
Premier Credit Ltd was established in 2013 and began operations in 2014. It is the MSE-lending arm of Platcorp Holdings a broader financial services group operating in East Africa, established in 2003. As at December 2016, Premier Credit had a total balance sheet size of approximately USD 32 million. The largest component of the loan book is SME-loans, followed by traditional group-loans to micro entrepreneurs. Around USD 1 million of the loan book is asset financing as discussed above. Verdant Capital is mandated by Premier Credit to raise debt financing for its ongoing loan book growth.