Accra, Ghana, September 6, 2019//-If Africa’s informal retail economy is to deliver on its potential, merchants need access to financial and technology offerings that address their real needs and challenges.
Nomanini’s platform enables an informal trader to interact with banks and distributors as a business looking for a business solution rather than as an individual looking for a microloan – a shift that helps merchants to elevate their success and growth.
This approach unlocks value and scale throughout the value chain, digitising and ultimately optimising relationships between merchants, distributors and manufacturers.
Distributors and banks are able to extend their access to millions of consumers at low cost through more effective relationships with informal traders.
Optimising the value chain for FMCGs, mobile distributors and banks
FMCG companies and distributors of virtual products such as mobile money and airtime gain access to real-time sales data that gives them a transparent view of their merchant network so that they can more effectively manage trade flows and increase sales.
This increases the reach of goods and services into the market, while lifting profitability for distributors and merchants alike. The benefits for banks are also significant.
Experience shows that it is possible to offer collateral-free loans to informal traders while achieving a default rate of only 1.5% and driving merchant activity rates up by as much as 30%. These results can be achieved while complying with all legal and regulatory requirements, including credit regulations.
Unifying the fragmented market to boost profits for all
Merchants can access loans at the same interest rate as traditional banks offer – rather than the punitive rates of microlenders – and in a format that meets their needs.
The loans can be structured with fees and repayment terms that match merchants’ requirement for short-term working capital and easily understandable payback requirements.
By enabling merchants to unlock working capital, invest in their business and reduce reliance on cash, Nomanini’s solution drives growth and reduces friction for everyone in the value chain.
This helps to increase profitability for all members of the ecosystem, improve choice and service for end-consumers, and ultimately strengthen the informal economy as a whole.
Culled from Nomanini’s 2019 case study on Fintech & the Informal Retail Economy in Africa
