How a former soldier built 4G Capital, a $1billion lender

OPEYEMI KAREEM, in this feature, tells the story of how former British Army officer Wayne Hennessy-Barrett arrived in Kenya with little experience in finance and a simple question: what do small traders need to keep their businesses moving? Thirteen years later, that question has helped build 4G Capital into a lender that has disbursed more than $1bn in loans.  

Thirteen years ago, Wayne Hennessy-Barrett walked into Kenya’s informal markets with no bank, no loan book and, by his own admission, little conventional finance experience. 

He had one question for the traders he met: what did they need?

The answers were remarkably simple.

“I walked around and asked people what they needed,” he said. “They just said, I need a loan now to buy stuff and sell it.”

That conversation would become the starting point for 4G Capital, the Kenya-based lender he would go on to build for micro and small businesses shut out of traditional finance.

The problem was not that these businesses did not need money. They needed it constantly — to replenish stock, take advantage of a good buying opportunity or keep trading when cash was tied up elsewhere. But many had neither the collateral nor the financial records that banks typically demanded before lending.

Hennessy-Barrett believed there was another way to decide who deserved credit.

Instead of asking a small trader to prove their worth through assets or years of financial statements, 4G Capital would lend them working capital, watch how they repaid it and use that behaviour to determine how much they could borrow next.

It was a simple idea, but one that would take the company from a $100 loan in its early days to more than $1bn in cumulative disbursements.

In June, 4G Capital said it had disbursed more than $1bn across over seven million loans,…