Google plans to invest $1 billion in Africa over the next five years to ensure access to fast and cheaper internet and will back startups to support the continent’s digital transformation.

The unit of US tech company Alphabet Inc made the announcement at a virtual event where it launched an Africa Investment Fund, through which it will invest $50 million in startups, providing them with access to its employees, network and technologies.

In collaboration with not-for-profit organisation Kiva, Google will also provide $10 million in low interest loans to help small businesses and entrepreneurs in Ghana, Kenya, Nigeria and South Africa so they can get through the economic hardship created by COVID-19.

Small businesses in Africa often struggle to get capital because they lack the necessary collateral required by banks in case they default. When credit is available, interest rates are usually too high.

Google said a programme pioneered last year in Kenya in partnership with Safaricom that allows customers to pay for 4G-enabled phones in instalments would be expanded across the continent with mobile operators such as MTN, Orange and Vodacom.