MasterCard helps Nairobi merchants with SMS-based micro-loans
MasterCard has unveiled a new platform called Kionect, a digital ordering system that enables small kiosk owners in Nairobi to order and pay for products from wholesalers via SMS, according to a press release.
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 being piloted with over 1,000 micro-businesses in three of Nairobi's informal settlements — Kibera, Kawangware and Kariobangi — in partnership 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, according to the release. 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 Mastercard Labs for Financial Inclusion in Nairobi, in the release. "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."