Trading in South Africa’s informal markets brings real risks to merchants and their suppliers. In this highly cash-based economy, the risk of holding and moving cash is significant – the loss of a day’s takings is difficult to bounce back from for most informal merchants. Fortunately, with the digitalisation trend firmly in place in informal markets, fintech solutions can greatly reduce these risks.
Supplier payments is an important area where fintechs are delivering real value in the informal ecosystem. The challenge for FMCG manufacturers and distributors is collections from the network of spazas and spazarettes that they service in South Africa’s townships. These merchants primarily operate on a cash on delivery basis requiring that drivers are paid in cash from merchants on their route, creating an opportunity for criminals to target drivers. Kazang’s supplier payments platform has been a game changer in terms of helping merchants and suppliers overcome these challenge