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Zande Africa helps spaza shops access crucial finance

It is estimated that the spaza shop market in South Africa is valued at around R40-billion per year and that 90% or more of the transactions are in cash. This market is growing at around 10% each year. Despite this, South Africa’s informal market is characterised by unbanked spaza owners with limited or no access to better financial products. This makes it difficult for them to deal with fast-moving consumer goods (FMCG) companies, who generally do not open lines of credit with smaller retailers that order in small quantities.

This mismatch allowed a local financial technology company, Invoiceworx (now Zande Africa), to step in and offer an innovative financial and distribution platform that provides trade and merchant finance to spaza shops.

It is estimated that the spaza shop market in South Africa is valued at around R40-billion per year and that 90% or more of the transactions are in cash.

Zande was founded by CEO Siya Ntutela and Mdu Thabethe, chief operating officer, in 2017 to help spaza shops access crucial finance. Explains Ntutela, “One of the primary reasons South African spaza shop owners don’t succeed is a lack of finance and broken supply chains.” In fact, only 20% of spazas are owned by South Africans for this reason. The rest are owned by non-South Africans. The business provides cash and credit service offerings to all spaza shop owners and Zande transacts with any spaza shop that wants better pricing and better service.

“The credit facility we offer assists owners to fill their stores and avoid stock-outs. Providing this working capital unlocks the trading and employment potential of thousands of individuals and businesses,” say the owners.

In addition to two warehouses in Ermelo and Nelspruit, Zande is set to grow this number with plans of expanding its first-mile delivery and payment solutions offerings to spaza shops in and around KwaMashu, KwaZulu Natal.

Zande provides lines of credit to spaza shops so that they are able to buy stock. This is done through a micro-distribution model to allow the spaza to take advantage of better pricing directly from manufacturers and producers. The spaza owners build a credit score by trading in cash with Zande over three to six months. The USSD technology developed by Zande allows the owners to apply for credit, check outstanding balances and make payments using their phones. The platform also facilitates cashless transactions between suppliers and retailers, in the process eliminating the cash-in-transit risk for suppliers.

In addition, with 20 vehicles on its books, Zande has developed a better model for moving products from its warehouses to spaza shops while creating employment in communities. Through the driver platform, transporters get paid weekly per load delivered to their local spaza shops. Bakkie or truck owners are invited to register at to become part of the driver community. 

Zande raises lines of credit (30 to 60 days) with large FMCG manufacturers. These credit lines are then extended to informal retailers via physical stock and repaid in 7 to 14 days. Zande delivers directly to the shops using a last-mile distribution model. Due to the volume of stock that Zande purchases, it negotiates bulk discounts with suppliers. These discounts are shared with the shop owners and inventory is delivered on credit.

Invoiceworx has changed its name to Zande Africa, which means to multiply. “The new name better reflects our business and our evolution into mobility and scaling of the business,” says Ntutela. “We are now ready to fundraise to boost the speed of our growth.”

Experian’s GeleZAR uplifts South Africa’s ‘unseen sector’

Experian South Africa has launched its ground-breaking, innovative smartphone app, GeleZAR. South African slang for "learning about money", it aims to bring more micro, small and medium-sized enterprises (MSME) into the mainstream economy. 

“GeleZAR has been developed to help such entrepreneurs gain basic business and financial education skills and also so that they can more easily access personalised financial products at interest rates that work for them,” says Simon Rudman, who leads social innovation Experian SA.

“From a credit bureau perspective, there are millions of ‘thin file’ people and MSMEs in sub-Saharan Africa. These are people with limited information on a traditional credit bureau or have no information at all and find themselves excluded from mainstream finance. They often face more difficulty – or higher costs – when applying for financial products or services,” explains Rudman. “We believe that introducing new and more appropriate data sources is the key. There are many forms of alternative data that could help build a financial footprint and positively impact the lives of many.”

The GeleZAR app was developed by Experian in partnership with local South African consumer and fintech developer Flat Rock Solutions. It is a mobile phone app designed to provide financial education and credit scoring to micro-entrepreneurs and individuals to ensure that they get the credit score they deserve. The app also advises individuals on how to maintain good credit health and recommends remedial actions, such as seeking a debt counsellor, if the need arises.

With their permission, micro-entrepreneurs will be able to build an alternative credit score using hundreds of mobile data points through the GeleZAR app, to determine creditworthiness. 

“Only data that an individual has consented to share will be used to assess an individual’s stability and credit score,” explains Rudman. “The greatest benefit for individuals is that of financial inclusion, whereby people will get access to financial products while banks and lenders will begin to see these individuals in a new way to offer the credit and interest rates they deserve.” 

Insure your items by simply snapping a picture!

Pineapple is a fresh take on the insurance industry. Not only have they made insurance as simple as snapping a picture, but they have flipped the entire insurance business model on its head - taking what was once seen as a grudge purchase and turning it into an enjoyable, fun and fair experience.

Matthew Elan Smith explains the advantages of using Pineapple: “Pineapple provides comprehensive insurance cover and the ability for members to keep all of their premiums not used for paying claims, as well as track in real time exactly how their premiums get used on a cent-by-cent basis. It's a completely transparent experience!”

What makes Pineapple different is that premiums paid are deposited into each member’s individual Pineapple Wallet. This premium deposit gives members full insurance cover. When a claim occurs, all wallets contribute in a small way to help pay the claim. Members can withdraw all unused deposits each year, in cash.

We asked Sizwe Ndlovu what will happen to a claim if wallets run out: “A small portion of the wallet deposit pays for peace of mind, so that valid claims are always paid even if wallets run out.” Co-founder Marnus van Heerden further explains, “People can only win by going with Pineapple - if all wallets are depleted, you still have comprehensive cover, and if wallets are not depleted you get to keep all the leftover funds in cash each year, on top of the comprehensive cover you enjoyed. It will be a no-brainer for people to adopt this simple and easy way of getting insured.”

Items are easily insured by simply snapping a picture! Pineapple offers comprehensive cover on individual items such as laptops, cell phones, sporting equipment, cameras, couches, TVs, drones, bicycles and more. Motor insurance is currently being developed and will soon be part of Pineapple’s offerings.

People can get snapping with Pineapple now by downloading the app available on both IOS and Android. Pineapple is an authorised financial provider, FSP 48650, and is underwritten by Compass Insure, FSP 1218.