In the recent past, Kiosk owners around Nairobi have had grueling time ordering and paying wholesalers and at the same time keeping manual track records for the orders submitted to their respective retailers. To their aid, Mastercard has come up with Kionect, a digital ordering system that empowers small kiosk owners in Nairobi to order and make payments for purchased products by SMS.
Kionect is simple to use. It works in a way that orders by kiosk owners are submitted through the feature phone helps create a digital account of the transactions made by the kiosk owners that gives them access to micro-loans to stock inventory and grow their business.
The technology from Mastercard gives a detailed digital log of data from transactions that qualify the micro-retailers for loans to get stock inventory from Musoni, a locally available micro-finance provider. The kiosk owners eligibility to get a larger loan for a longer period depends on their fast repayment of loans borrowed, which eventually results in the growth of their business.
Over a thousand micro businesses in Nairobi’s Kibera, Kawangware, and Kariobangi are having a pilot run of Kionect in partnership with Kaskazi, a for-profit, and distributor.Michael Elliott, vice president Mastercard Labs for Financial Inclusion in Nairobi said that Kiosk owners are the heartbeat of their communities and thus they source the supplies needed to get by. He added that they had worked hand-in-hand with micro-merchants to truly understand the daily challenges the Kiosk Owners face. He said that by learning the product sourcing, tracking inventory and access to flexible, short-term credit, they set out to develop Kionect.
Diamond Trust Bank 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.
This Mastercard technology opens up a new platform for micro-retailers to grow their business, increase consumer demand and ultimately contribute to economic development in Africa. For instance, for most of the hundreds of thousands of kiosk owners in Kenya, there is no way to qualify for traditional, financial products such as loans and lines of credit offered by banks and financial institutions because the businesses run on cash and have basically no financial track record. Furthermore, there is no proper method for kiosk owners to place stock orders directly with the wholesaler, which makes it very cumbersome to stock fast growing inventory.
Kionect brings to the public and private sectors of Africa the benefits and security of electronic payments, thanks to Mastercard.
Given the pilot run is more beneficial, Mastercard will incorporate the most successful features of Kionect into solutions designed for scale in partnerships with global Fast Moving Consumer Goods companies in emerging markets.