Mastercard has unveiled Kionect, a digital ordering system that enables kiosk owners to access micro-loans.
Kionect will allow kiosk owners in Nairobi to order and pay for products from wholesalers via SMS. The orders made via a feature phone help create a digital record for kiosk owners enabling them to access micro-loans to stock inventory and further expand their business.
Kionect technology provides a digital log of all transaction data that makes these micro-retailers eligible for loans to stock inventory from Musoni, a regional micro-finance provider. The kiosk owner will have the opportunity to take out larger with every loan that is paid back on time.
There is almost no possibility for the nearly 100,000 kiosk owners in Kenya to apply for traditional loans and lines of credit that banks and financial institutions offer. This is mainly due to the fact that these small businesses run on cash, leaving no financial track record.
Kionect is one of several broad-based collaborations Mastercard has launched with public and private sector entities to bring electronic payment networks to Africa and around the globe.
Michael Elliott, vice president at Mastercard Labs for Financial Inclusion in Nairobi, stated: “Kiosk owners are the heartbeat of their communities – they source the supplies needed to get by. 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.”
Juliet Ongwae, chief innovation officer, Musoni Kenya, added: “For kiosk owners, access to basic financial services holds the potential to expand their business and contribute to the vibrancy of their communities.
“This product heavily relies on the micro-entrepreneurs’ transactional data for credit assessment therefore making it accessible to micro-entrepreneurs who lack conventional collateral to secure their loans.”
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.