October 3, 2022


Timely – Precise – Factual

Micro-retailers are the new frontier for digital market place

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  • Online presence allows micro-retailers to scale without the need to invest in physical structures
  • The forum emerged from

 Lack of proper inventory records and low level of entrepreneurial education is hampering access to finance for Micro retailers in Kenya.

This comes even as it emerged that only 10 percent of local micro retailers have undergone some form of entrepreneurial training on managing their businesses.

According to Alice Waweru the entrepreneurship portfolio lead at TechnoServe, financial institutions don’t reach out to the micro retail businesses to understand how they operate and their financial needs.

Speaking during a Micro-Retail Stakeholder Forum held in Nairobi, Waweru pointed out that growth in online presence by micro-retailers presents a golden opportunity for players in the digital economy to avail records that are visible enough for financial institutions to develop an appropriate credit rating for them.

“We are calling upon the financial institutions to tailor financial products that are suitable and appropriate for our micro retailers. We realised there are a lot of financial products targeting SMEs but most of them are not appropriate for a duka owner” said Ms Waweru

Techno Serve has been championing for the Smart Duka initiative which begun in 2015, by training in Management Skills and fostering business support to these retailers.

From the forum themed “Spotlighting opportunities in the continuously evolving Micro-Retail sector” it emerged that the Smart Duka initiative, has reached over 40,000 retailers in Nairobi with a funding of over Ksh500 million over the five years.

A program that seeks to support micro-retailers and improve shops’ financial returns and growth since 2015, TechnoServe has worked with over 50,000 Micro Retailers located in Kenya, Tanzania, Nigeria and Cote d’Ivoire to improve their business management skills and provide links to finance and markets.

Micro-retailers with an online presence offer a promising channel to distribute digital products and services, say industry pundits.

Presentations at the Fifth, which was hosted by international nonprofit TechnoServe, found that micro-retailers are increasingly using online platforms to access credit, suppliers and sell goods, which presents a new avenue for players in the digital economy to distribute other products such as insurance and airtime.

“There is a great opportunity to earn income from digital innovations that provide micro-retailers to launch additional businesses to sell financial products and services such as airtime and pay bills earning extra income,” said Alice Waweru.

Other opportunities presented at this year’s Forum whose theme is “Spotlighting opportunities in the continuously evolving Micro-Retail sector” are in e-commerce, research, and lending.

“Digital financial providers have leveraged on digital innovations to reach out to micro retailers and offer mobile based loans whose credit score ratings are dependent on number and amount of transactions. This has accorded many micro retailers an opportunity to access credit which they otherwise wouldn’t access due to the informal nature of businesses,” she added.

The Mastercard Foundation, Citi Foundation, elea Foundation for Ethics in Globalization and Moody’s Foundation are other partners in the programme.

Additionally, TechnoServe found that technology in addition to formalization played a critical part in increasing the viability of micro-retailers during the height of the COVID-19 pandemic.

Micro-retailers that were formalized and used digital products were able to better access finance, technology, and supply chains which increased their sustainability.

A TechnoServe study found that while 41 percent of micro-retailers that used these linkages in addition to capacity building done by the organisation saw a drop in revenues, this is lower than the 93 percent drop a similar study conducted by the World Bank had found.

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