Fintech Startup SoshoPay Expands SME Lending Through Energy Access Data
KAMPALA, Uganda
Fintech startup SoshoPay is helping financial institutions expand lending to informal small and medium sized enterprises (SMEs) by using energy access data to improve credit assessments, offering a new approach to financing businesses that have traditionally struggled to access formal banking services.
The company announced the initiative during June 2026, introducing a data driven lending model that enables banks and other financial institutions to evaluate businesses using alternative information derived from energy consumption and payment histories. The approach is designed to help lenders better understand the financial behavior of informal enterprises that often lack conventional credit records or formal financial documentation.
The innovation addresses one of Africa’s largest financing challenges, where millions of informal businesses remain excluded from traditional lending despite contributing significantly to employment and economic activity.
Rethinking Credit Assessment
Across much of Africa, informal businesses operate successfully without maintaining audited financial statements, collateral, or formal credit histories.
As a result, many entrepreneurs struggle to qualify for bank loans, limiting their ability to purchase inventory, expand operations, hire employees, or invest in business growth.
SoshoPay’s platform seeks to bridge this gap by incorporating alternative data sources into lending decisions. Through analysis of energy access information and payment behavior, financial institutions can build more comprehensive risk profiles for businesses that would otherwise remain invisible to conventional credit systems.
Industry experts say alternative data is becoming an increasingly valuable tool in expanding financial inclusion across emerging markets.
Unlocking Finance for Informal SMEs
The informal economy represents a substantial share of business activity across many African countries, employing millions of entrepreneurs and contributing significantly to national economies.
Despite this importance, informal SMEs continue to face limited access to affordable financing because traditional lending models depend heavily on documentation that many businesses do not possess.
By leveraging energy access data, SoshoPay enables banks to evaluate business consistency, payment discipline, and operational activity through non traditional indicators, allowing more entrepreneurs to demonstrate creditworthiness.
Financial institutions participating in the initiative are expected to benefit from improved lending decisions while expanding services to previously underserved market segments.
Fintech Driving Financial Inclusion
The initiative reflects a broader trend across Africa’s fintech sector, where companies are increasingly using technology and alternative data to solve long-standing financial inclusion challenges.
From mobile money transactions and digital payment histories to utility payments and business cash flow analysis, fintech companies are developing innovative ways to improve credit access for entrepreneurs.
These technologies are helping lenders reduce information gaps while allowing SMEs to establish financial identities beyond conventional banking records.
Industry observers believe this shift could significantly increase access to working capital for businesses operating within the informal economy.
Benefits for Banks and Entrepreneurs
For financial institutions, alternative credit assessment offers an opportunity to safely expand lending portfolios into previously underserved markets.
For entrepreneurs, improved access to financing can support inventory purchases, equipment investment, business expansion, and job creation.
Business leaders note that better credit access not only strengthens individual enterprises but also contributes to broader economic development by enabling small businesses to grow sustainably.
As digital financial infrastructure continues to mature across Africa, innovative lending models are expected to become increasingly common within the banking sector.
Looking Ahead
The adoption of alternative credit assessment technologies is expected to accelerate as banks seek new ways to serve entrepreneurs operating outside traditional financial systems.
With financial inclusion remaining a major priority across the continent, fintech companies such as SoshoPay are demonstrating how data innovation can help unlock financing for businesses that have historically been excluded from formal credit markets.
Analysts believe continued collaboration between fintech firms, financial institutions, and development partners will play an important role in reducing Africa’s SME financing gap over the coming years.
EIA Takeaway
SoshoPay’s use of energy access data demonstrates how fintech innovation is reshaping SME finance across Africa. By helping banks assess businesses using alternative data rather than relying solely on traditional credit histories, the company is creating new pathways for informal entrepreneurs to access financing, grow their businesses, and participate more fully in the formal economy.