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Spaza Shop Fintech Closes A Gap In R40bn Cash Market
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Spaza Shop Fintech Closes A Gap In R40bn Cash Market

Spaza Shop Fintech Closes A Gap In R40bn Cash Market

Local fintech company Zande Africa is offering an innovative financial and distribution platform to informal shops known as spaza shops, a sector where 90 percent or more of transactions are in the form of hard cash.

Zande Africa says the spaza shop market in South Africa is valued at around R40 billion per year and growing at around 10 percent annually, but is characterised by unbanked owners with limited or no access to better financial products.

“This makes it difficult for them to deal with FMCG (Fast Moving Consumer Goods) companies who generally do not open lines of credit with smaller retailers that order in small quantities,” the fintech company said.

“It was this mismatch which allowed … Zande Africa to offer an innovative financial and distribution platform that provides trade and merchant finance to spaza shops.”

Zande was founded by Siya Ntutela and Mdu Thabethe to help spaza shops access crucial finance in 2017.

“One of the primary reasons South African spaza shop owners don’t succeed is a lack of finance and broken supply chains,” Ntutela said.

“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.”

Zande uses a micro distribution model to allow spaza shops to take advantage of better pricing directly from manufacturers and producers. Owners build a credit score by trading in cash with Zande over 3 to 6 months.

The USSD technology developed by the company allows 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.

The business won third place in the SAB Foundation Social Innovation Award last year and won R1 million and support from Merrill Lynch South Africa and AlphaCode in 2016, an award which sought to identify and reward high potential South African fintech entrepreneurs.


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