Businesses & Financial News

Kenyan micro-retailers to benefit from new financing deal

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By Steve Umidha

Kenyan micro retailers are set to benefit from a multilateral deal between Mastercard, Unilever and KCB Bank with the COVID-19 relief package meant to improve their earnings.

Through the Jaza Duka program, an initiative of Mastercard’s Micro Credit Program is a global, inclusive credit ecosystem for small retailers that helps them overcome cash constraints and enables them to access short-term credit.

The deal comes on the back of a recent survey which showed that more than half of micro-retailers (small shops) in Kenya, are finding it difficult to access financing in the wake of Covid-19.

The TechnoServe shows released in December last year and covered the second half of the year, from August, found that 52 per cent of the surveyed entities across the country were hit by cash flow crisis, with 31 per cent of such shops facing challenges in accessing suppliers.

As a result, the report noted that the pandemic has exposed such businesses that are now staring at potential bankruptcy with millions of jobs and livelihoods at risk.

“Many micro-retailers depended on customers coming to their shops, but after COVID-19, they were forced to look into new ways to engage with their customers as these buyers were no longer streaming in. Micro-retailers that used digital solutions to reach out to their customers were able to maintain them during this crisis,” said Alice Waweru, the entrepreneurship portfolio lead at TechnoServe.

Jaza Duka partners have pooled resources to provide retailers in the program with a business recovery package worth over $150,000.

The kitty will be divided and delivered in the form of direct financial assistance, free health products to meet the rising demand and customized business education and training to help retailers navigate the current business environment and build the foundation for mid- to long-term resilience.

The program combines data distribution from Unilever and analysis by Mastercard to provide micro-credit eligibility recommendations to KCB Bank. The bank then uses this information to assess a retailer’s credit worthiness and extend formal credit for stock purchases – which is interest-free for up to 17 days.

“At Mastercard, we have seen the Jaza Duka initiative transform the lives and businesses of thousands of micro-merchants in Kenya over the last two years. We strongly believe that we can help merchants start to rebuild and position themselves for a more resilient future,” said Natasha Jamal, MEA Regional Director at the Mastercard Center for Inclusive Growth.

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