3 out of 4 MSMEs in Kenya today mention lack of access to credit as their biggest growth constraint. Meet Stanley, a shopkeeper who pays the price. Stanley's biggest problem today is his inability to keep his shelves fully stocked due to cash-flow problems. Stanley, like many other shopkeepers, has to borrow from relatives and friends to finance his business because of limited cash flow. And like many other shopkeepers, his cash flow problems are a result of giving credit to shop customers to gain their loyalty, and relatives who hardly ever pay him back. For the longest time, shopkeepers have been the heartbeat for African communities. They supply over 70% of essential goods, worth over $180 Billion annually across the continent. It comes as a shock that despite their importance to local economies, over 90% of micro-retailers do not have any credit history nor access to financing from Banks or MFI's.
Tanda in partnership with Asante Financial Services Group is deploying a customized financing solution for micro-retailers. About 10K Tanda merchants are set to benefit from this new service with plans to scale it to 100k merchants in the next 24 months. "We've developed two affordable financing products, an overdraft facility at 0.8% interest daily to finance agent float and weekly loans starting at 1.5% interest to finance orders " says Geoffrey, Tanda's CEO. "We have overcome many hurdles right from working out responsible interest rates that do not eat into their margins, credit scoring using digital only data for scale and raising a sufficient credit pool that can service our fast-growing agent network."
This service comes at a time when the Kenyan market is flooded with exploitative digital loan applications which cost more than what many merchants make, offering the most affordable and flexible financing option in the market. This service is set to drive financial inclusion for under-served MSME's and most importantly make business work for Stanley.
To learn more visit www.tanda.africa/loans