A leading worldwide payment and technology firm, Mastercard and Unilever, a British-Dutch transnational customer goods company on Wednesday, 02 May disclosed that they will increase their strategic partnership to support small scale business entrepreneurs in Africa and other regions overcome the cash constraints that cut-off their capacity to purchase and sell more products and eventually develop their business.
In Kenya, the two companies have unveiled Jaza Duka (“fill up your store”). The initiatives combine distribution data from Unilever and study by Mastercard, on how much inventory a store has purchased from Unilever after some time. The outcomes from the examination are used to provide a micro-credit eligibility recommendation to KCB Bank Kenya (KCB). This resolves for the issue that banks usually request formal credit record or insurance, resulting in entrepreneurs borrowing from informal lenders at high-interest rates and trapping them in a cycle of debt.
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By the end of April, more than 5,000 kiosk owners in the wider Nairobi area had applied to join the program – all are expected to be fully enrolled by mid-May. Stores that fully moved to the new platform have grown their sales of Unilever products by up to 20 percent.
As part of the micro-credit, the partners are providing the store owners with training to help them manage their finances, inventory and forward planning for supply against demand. The entrepreneurs are also being trained on marketing tools and techniques to help sell their products and subsequently increase their opportunity to grow faster.
As stated by Ajay Banga, President and CEO, Mastercard. “Micro and small businesses are the economic backbone of communities around the world.”
“There’s an opportunity to set these businesses up for long-term growth by bringing together the tools and data from different industries to change the model of small business financing. We invite other companies and private sector leaders to join us in this collaborative approach and create a true network effect that will bring down barriers and trigger change.” He stated.
Paul Polman, Chief Executive, Unilever said, “Financial inclusion is a key enabler of the 2030 Sustainable Development Goals – lifting individuals out of poverty and supporting overall economic growth. By broadening our collaboration with Mastercard, working across sectors and including additional private and public partners, we are further expanding the positive impact of financial and economic inclusion.”
Here are What Mastercard and Unilever Agreed Upon:
- The companies have set a target to provide 20,000 kiosks in Kenya with a digitally managed credit solution by end of the year. These efforts are expected to extend to additional markets across Africa and Asia Pacific.
- To ensure responsible use of credit, the Center for Inclusive Growth – a Mastercard philanthropic initiative – will work with TechnoServe to provide micro-entrepreneurs with training on financial and business skills.
- Mastercard will join Unilever in its “Transform” partnership with the UK Department for International Development (DFID), with the aim to promote sustainable community development in emerging markets around the world.