Utilizing digital tools to unlock opportunities in micro-retail
Flexible credit services for micro-retailers
Micro-retailers play important roles in Sub-Saharan African countries, intermediating a wide range of goods and services from agricultural inputs, hardware and medicines to fast-moving consumer goods. Often these micro-retailers provide the main form of distribution to low income communities and in 2019, the channel represented up to 70% of all retail transactions in Kenya and up to 90% of all retail transactions in Nigeria and Uganda. Micro-retailers also provide a key financial service supplying many customers with their most important and accessible form of credit (often referred to as “shop credit”). To provide this credit to end-customers, the micro-retailers have to manage the cash-squeeze related to paying wholesalers for their stock, while also extending and managing the repayment of loans to end-customers.
Micro-retailers often keep limited records of their business transactions and lack access to formal financial services, particularly to finance and grow their businesses. Business growth has been particularly difficult during the Covid-19 pandemic where face-to-face transactions have been significantly affected.
4R Digital is working with its partners to respond to the key challenges that micro-retailers face, leveraging available digital technologies and financial services to provide accessible and affordable solutions. Digital solutions can compliment the traditional ways of working that micro-retailers are familiar and comfortable with – while also enabling them to increase the range of products sold and level of turnover achieved.