There Is An Urgent Need To Digitize Micro-retailers For A Bright Future

Covid-19 was an event in history that was never anticipated. It got both individuals and businesses unprepared, leaving millions of them to react towards it. Nobody around the world ever prepared for an event like what the year 2020 presented.

With people taking precautions such as wearing masks, washing hands, sanitizing, and maintaining social distance, businesses saw a dwindling in the number of physical customers. In fact, as sellers were waiting for buyers offlines, buyers were looking for sellers online.

Millions of businesses have since shut down after failing to remain afloat in the new world, (now known as the ‘new normal’), rendering millions of people jobless and hopeless. The majority of businesses that opted to shut down were small and micro-businesses.

In Kenya, for instance, it is estimated that at least 2,000,000 people lost direct jobs as a result of Covid-19. Hundreds of thousands of SMEs also shut their doors permanently as the pandemic took a toll on them. More shutdowns are prone to be witnessed unless there is a change in the mindset.

A study conducted by TechnoServe found out that at the advent of Covid-19, 27 micro-retailers had to shut their business as they failed to sustain them. 21 percent opted to shut their businesses permanently. Sales dropped as people had no cash to spend.

It is obvious that the pandemic will be lingering in the air for some time. It is not going away any time soon. Even with the news of an effective vaccine, it is not sure when or whether it will hit the African airspaces such as Kenya. What is the way forward?

Among the people who have been hit hard by the Covid-19 pandemic are the micro-retailers, who have always played a critical role not only to the economy but in society as a whole. The economy would be on its knees was it not for the micro-retailers.

In Kenya, micro-retailers, otherwise known as Dukas are known to provide products and services to about 80 percent of the population, yet they have been facing massive challenges, including the ongoing pandemic. Truth is these Dukas have been instrumental, not just in eradicating poverty but also in enhancing financial inclusion.

Mostly neglected and forgotten, despite the fact that they play a major role in the economy, there is a need to shift focus on these micro-retailers if we want to fix the economy for the present and the future.

“We have seen a shift of so many businesses embracing digitization during this Covid-19 period. We strive to make sure that micro-retailers reap the benefits of digitization,” says Alice Waweru from TechnoServe.

According to Alice, digitization is the only way micro-retailers within and without Kenya can survive and sail through the pandemic. She says technology is revolutionizing the world and Covid-19 pandemic has just worked to make people see the need and sense.

“Digitisation is the anchor to any given business. Micro-retailers have no choice but to hop into the train that has since left the situation,” added Alice.

Alice says that mobile phones have been instrumental for micro-retailers by linking them to their existing and potential customers, as well as enabling them to get funding by linking them to various financial service providers such as banks and even M-Pesa.

Alice was speaking during a Stakeholders’ Forum organized by TechnoServe to engage players and experts within the micro-retailers sector on how best to tailor digitization towards productivity in partnership with Aspen Network of Development Entrepreneurs (ANDE).

TechnoServe says so far it has managed to bring up and empower at least 30,000 micro-retailers through training and equipping them with digital skills that help them sail through challenges such as Covid-19. So far, the company has worked with 30,000 micro-entrepreneurs across Kenya, Nigeria, Côte d’Ivoire, and Tanzania, to help them improve the operations and profitability of their stores to enabled them to increase their income and maximize their economic potential.

TechnoServe has worked with a range of key partners– including the Citi Foundation, the Elea Foundation, and the MasterCard Centre for Inclusive Growth, MasterCard Foundation, and the Moody’s Foundation–to develop a proven approach to helping small retailers maximize their economic potential.

“Through these training and partnerships, we have managed to help micro-retailers increase their sales by about 28 percent,” said Alice.

During the session, Mr. Mugambi, the CEO of Citi Bank said that the lender, through Citi Foundation has been working closely with partners such as 4G Capital, to empower micro-retailers through the Smart Duka Initiative.

“The Smart Duka program has been a success, and it is the reason many micro-retailers are operational. Through partnerships with TechnoServe and 4G Capital, we know we shall be able to reach more in the near future,” said Mr. Mugambi.

On his part, the keynote speaker, Mr. Sitoyo who is the head of M-Pesa at Safaricom, hailed the efforts of TechnoServe and other players in helping the micro-retailers around the country.

Mr. Sitoyo said that M-Pesa is working towards ensuring that micro-retailers are empowered. “We are looking at them from a different perspective such that for every shilling they transact, they are making 5 shillings.”

Currently, Safaricom carries out at least 30,000,000 transactions daily, with a bulk of it coming from the SME sector. He said that for every 10 cashless transactions in Kenya, 8 of them are transacted via M-Pesa, taking 80% of the transactions.

“We are seeing situations where businesses are completely going cashless. Currently, there are businesses that are not accepting cash and this is the new shift,” said Mr. Sitoyo.