Payments firm Mastercard and KCB #ticker:KCB are set to roll out across Kenya a solution that enables smallscale traders running kiosks to access stock on credit.
The solution dubbed Koinect, formerly Jaza Duka, was piloted in Kenya and is also set for further rollout in Egypt in partnership with the National Bank of Egypt.
Kenyan traders using the solution will be issued a card by a partner bank that will enable them access to credit.
Those accessing credit will not pay interest if the amount is paid within seven days while defaulters attract a 3.5 percent interest per month on outstanding balance.
“With this platform, merchants get to know how much in credit they can access at the point of purchase. We have now upgraded the platform with advanced technology and now ready to scale it up,” said head of Mastercard Labs for Financial Inclusion in Kenya, Salah Goss.
The partnership was first rolled out locally in partnership with Unilever, with more than 3,000 micro-retailers allowed to stock their shops on credit from its distributors.
The money is loaned to the distributors who supply the shop owners on credit, with the traders then repaying KCB directly, usually via a mobile money platform. It was launched in 2015 to ease traders’ cash flow troubles that limit stocking. The bank sends a statement to kiosks every 10 days on their credit limit.