Rizwan Yusufali (L) and Alice Waweru (R) from TechnoServe follow discussions at the third Smart Duka forum. The Smart Duka program aims at boosting skills for micro-retailers.
ICT Industry

Digital Technology changing Kenya’s Micro Retail Sector

The Micro Retail Sector in Kenya is set for a revolution after the launch of a program to boost the skills and uptake of digital technology for micro traders in Kenya.

The program dubbed Smart Duka by TechnoServe has been expanded to Cote d’ Ivoire, Nigeria and Tanzania due to its positive impact.

The informal retail sub-sector in Kenya is predominantly populated by Micro-SMEs (or micro retailers) popularly known as “Dukas”.

They hold 70% of the retail market in the country consisting of over 250,000 micro retailers. They are frequented by up to 95% of Kenyans for subsistence purchases and are a key employer especially among the youth and women.

According to Alice Waweru, the Regional Program Manager at TechnoServe, the adoption of digital technologies by micro retailers has led to an increase in profits.

Those who invested in Point of Sales systems were able to monitor the performance of their shops by capturing data, record transactions and also were able to manage their clients and suppliers better.

“Through the POS, Duka owners were able to monitor goods with the highest turnover helping them to quickly ascertain which products contributed most to their revenues and determine their stock levels at any given time,” says Waweru.

Debt collection also improved as they were able to keep a record of their debtors through the POS. Other skills under the Smart Duka Program that boosted the duka owners get better returns were proper record keeping, good customer service, cash management and good shop displays. The traders increased their profits by as much as 55%.

The program under pilot basis since 2016 aims at giving the duka owners, managers and their employees business and financial management skills.

Technoserve has so far worked with over 8,000 shop owners and employees in Nairobi out of which 59% are women and 72% are the youth.

They have been able to access microloans amounting to $260,000 through a partnership with 4G Capital.

Due to the various challenges in accessing loans from banks and other financial institutions, the traders leveraged on the growth of mobile and high smartphone penetration rates which stands at 88% to get credit products from Fintechs.

The traders have also been facilitated to register 19 business groups which have enabled them to get an 11% discount from aggregated orders from suppliers.

TechnoServe has also partnered with Citi Foundation, Elea Foundation for Ethics in Globalization, MasterCard Centre for Inclusive Growth (MCIG) and Moody’s Corporation, in the Smart Duka program.

BY ALEXANDER MWANGI