Johannesburg-based Standard Bank has set its eyes on Africa’s millions of small shop owners and informal retailers. In a bid to convert them to potential customers, the bank has invested around $4 million in Nomanini, a Cape Town-based fintech company that connects informal merchants with distributors through an e-wallet.
Standard Bank will use Nomanini’s technology to collect and analyse data on retailers. The data will help the bank understand the retailer’s creditworthiness, ordering patterns, and also build up a financial profile. The bank will then send the retailer alerts and also offer to arrange and underwrite their next orders.
To facilitate this, Nomanini or Standard Bank devices will be supplied to the traders. They could also leverage other existing networks or devices from third parties. The bank also plans to offer these retailers its financial services, like cash deposits and withdrawals.
Standard Bank and fintech firm Nomanini will roll out their service in South Africa, Zambia, Mozambique, Malawi, Angola, Zimbabwe, Namibia, Ghana, Nigeria, Kenya, Tanzania, Eswatini and Lesotho.
According to a research report, 90 percent of the retail transactions in Africa are carried out through cash or through informal channels such as kiosks and open-air markets.
With this move, Standard Bank will take on mobile operators that dominate the financial services market in African countries like Kenya. However, the bank expects its product offerings such as short-term savings and insurance to give the bank an edge over its competitors. Standard Bank will also face competition from FirstRand that has adopted an almost similar strategy to Standard Bank’s.
Recently, Standard Bank became the first African bank to join the blockchain-based trade finance network, the Marco Polo Network. It will help the South African bank develop financial trade solutions together with global financial firms such as Dutch ING and BNP Paribas.