AFRICA – Nestle, global food and beverage giant, has partnered with South Africa based fintech platform Nomanini and Standard Bank, to provide informal retail Micro, Small and Medium-Sized Enterprises (MSMEs) in Africa with access to working capital via Trader Assist.
The digital finance solution, enables retailers to sufficiently stock up their shops by gaining access to responsible working capital from Standard Bank and obtaining quality products from Nestle.
Under the partnership, the retailers will be offered with financial and operational support required following analyses of the MSME’s sales history by Nomanini.
According to Nomanini, the informal economy in sub-Saharan Africa accounts for 38% of the region’s GDP.
However, informal retail Micro, Small, Medium-sized Enterprises (MSMEs) are largely underserved and underbanked.
In addition, they face a distinct challenge of balancing the scarce working capital between various products that need to be stocked, or else they lose customers.
The collaborative partners are in pursuit to change the narrative as retailers will typically generate 80%-85% of their revenue through the sale of fast-moving consumer goods (FMCG) under the program.
Vahid Monadjem, CEO and Founder of Nomanini, says, “Access to finance has been a major obstacle for MSMEs in Africa.
“Trader Assist connects the informal retail ecosystem by integrating payments, working capital, and data analytics to help ensure small retailers continue to thrive.”
Retailers who access working capital credit have an approximately 30% higher activity rate than those who do not for instance adequately stocking up the stores.
Trader Assist proved particularly helpful to retailers during the COVID-19 pandemic when lock-down barred some goods from getting into certain countries.
Working with Nestle promised availability of commodities, leveraging on their wide range of products from global icons like Nescafé or Nespresso to local favourites like Ninho.
“Informal retailers require a holistic solution that leverages technology and partnership to enable and sustain their business growth in the long term.
“With the Trader Assist programme, we aim to support 10,000 traders in growing sustainable businesses in Zambia. We plan to expand our partnership across eastern and southern Africa thereafter,” said John Ashley, Chief Financial Officer at Nestle East and Southern Africa Region.
Since launching the solution, Standard Bank has been able to onboard more than 20 merchants per week per branch with minimal back-office staff.
More than 70% of retailers who were onboarded were eligible for credit after the initial 30-day period, and over 80% of those retail merchants who used credit once went on to become repeat borrowers. This credit has funded between 60%- 80% of retailers’ trading volumes.
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