Supply Chain Financing for Informal MSMEs

Informal retail MSMEs face distinct challenges: their scarce working capital has to be balanced between a range of products that need to be stocked, to avoid losing customers. Retailers also need to be present in their shops to operate. Leaving the shop for extended periods of time to go to a bank branch, for example, results in lost revenue. 

Banks need to provide business-focused financial services to MSMEs, including supply chain financing.

Learn more about how our platform enabled the biggest bank in Africa to rapidly deploy a supply chain financing solution in partnership with the world’s largest FMCG manufacturer while maintaining <1% loan default rate.

Fintech and the Fragmented Informal Retail Economy in Africa

Sub-Saharan Africa is home to the second-largest informal economy in the world after Latin America and the Caribbean, yet the informal traders that drive this market are underserved by traditional financial services companies and largely excluded from the formal financial system. 

Innovative financial technology solutions can, however, provide a bridge between the informal economy and formal financial services, rewriting the rules of informal trade in Africa. Connecting informal merchants to digitised financial services offers the opportunity to address merchant pain points, improve efficiencies across the value chain, and ultimately boost economic growth.

A Business Case for Short-Term Loans to Informal Merchants