Mastercard, a leading global financial services company, has unveiled a new digital ordering system known as Kionect, this week, that empowers small kiosk owners in Kenya’s capital of Nairobi, allowing them to order and pay for products from wholesalers via text message.
The new project, which was announced on December 6th, 2017, also allows kiosk owners access 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, including Kibera, Kawangware and Kariobangi.
The system is part of a partnership agreement with Kaskazi, a for-profit wholesaler and distributor. Diamond Trust Bank (DTB), a financial institution with operations in Kenya, Uganda, Tanzania and Burundi, 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.
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.
“Kiosk owners are the heartbeat of their communities – they source the supplies needed to get by,” said Michael Elliott, Vice President for Financial Inclusion in Nairobi at Mastercard Labs.
“We 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. This Mastercard technology opens up a new avenue for micro-retailers to grow their business, increase consumer demand and ultimately contribute to economic development in Africa,” Elliot explained.
Nearly 100,000 kiosk owners in Kenya use hard cash when operating their businesses, meaning that there is no mechanism for kiosk owners to place stock orders directly with their wholesaler, which makes it challenging to stock fast moving inventory.
Kionect is one of several broad-based collaborations Mastercard has launched with public and private sector entities to bring the benefits and security of electronic payments to Africa and around the globe. It developed from a direct collaboration with Mastercard Labs for Financial Inclusion and micro-businesses in Kenya. After the initial pilot, Mastercard will embed the most successful services and features of Kionect into solutions designed for scale in partnerships with global Fast Moving Consumer Goods (FMCG) companies in emerging markets.
“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 at financial services group, Musoni Kenya.
“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,” said Farouk Khimji, Head of Products and Innovations at DTB.