Mastercard has unveiled Kionect, a digital ordering system that empowers small kiosk owners in Nairobi to order and pay for products from wholesalers via SMS. Orders submitted via a feature phone helps create a digital record for kiosk owners to get access to micro-loans to stock inventory and grow their business.
Kionect is currently being piloted with over 1,000 micro-businesses in three of Nairobi’s informal settlements – Kibera, Kawangware and Kariobangi. The system is in partnership with Kaskazi, a for-profit wholesaler and distributor. Diamond Trust Bank (DTB) is facilitating digital payments between the kiosk owners and the wholesaler, and is also acting as a re-seller of the platform to its wholesale business clients.
“Kiosk owners are the heartbeat of their communities – they source the supplies needed to get by,” said Michael Elliott, vice president Mastercard Labs for Financial Inclusion in Nairobi. He added that they have worked hand-in-hand with micro-merchants to truly understand their daily hurdles. “Learning that product sourcing, tracking inventory and access to flexible, short-term credit are major pain points, we set out to develop Kionect.”
Kionect, technology from Mastercard, provides a digital log of transaction data that qualifies these micro-retailers for loans to stock inventory from Musoni, a regional micro-finance provider. With every loan that is paid on time, the kiosk owner has the opportunity to take out a larger loan for a longer term and further contribute to the growth of their business.
“For kiosk owners, access to basic financial services holds the potential to expand their business and contribute to the vibrancy of their communities,” said Juliet Ongwae, Chief Innovation Officer, Musoni Kenya. The product heavily relies on the micro-entrepreneurs’ transactional data for credit assessment therefore making it accessible to micro-entrepreneurs who lack conventional collateral to secure their loans.
Farouk Khimji, Head of Products & Innovations, DTB added that they are seeing an increased need for supply-chain financing in the micro-merchant and small and medium enterprise space. “If wholesalers can provide financial help to their merchants, it can help bring income stability, grow their business, create new employment opportunities and contribute to economic growth for Africa.”