Small businesses (SMEs) represent onwards of 75% of businesses in Africa. These include agri-enterprises, women- and youth-owned enterprises, and general small traders and suppliers. However, SMEs struggle to access working capital using traditional Bank instruments like Overdrafts, loans and Letters of credit. Available data estimates that over 65% of SME applications to Banks are decline principally owing to poor creditworthiness, lack of collateral, Informality, or weak financials. These underserved SMEs then turn to predatory loan sharks for credit – paying interest in the region of 10%-30% per month.
Supply Chain Finance provides an opportunity for Bank and non-Bank Financiers to Finance SMEs and therefore effectively contribute to development agenda.
Some of the compelling opportunities for Financiers to adopt SCF include:-
- Sustainable Risk-adjusted revenue growth: Growth in revenue through a low-risk trade-based product. It is proven that trade finance has the lowest default rates of all lending products.
- Fulfilment of SME and Financial Inclusion Objectives: Penetration of the SME segment and enhancement of financial inclusion objectives. A noteworthy use case (in addition to traditional SMEs) is the ability of the platform to facilitate a flow of working capital to Agri-based SMEs (the Cooperatives), women-owned enterprises, Youth-owned Enterprises and generally the “AGPO sector”
- Robust customer acquisition and retention: A faster and more robust customer acquisition and retention strategy, including customer account opening through integration of our platform to the Bank’s core Banking system
- Increase in Profitability: Reduction in the overall cost of business through automation of the product delivery and attendant processes as well as opportunities arising from Cross-selling of other products within the group to non-customer suppliers of participating anchor buyers.
- Creation of an innovation culture to respond to pressing market needs: A mark of Product innovation and leadership in the market by introducing a fully digital product which does not require suppliers to visit the bank.
Why Work with Mtaji?
- Our objectives are aligned with the Funder: Mtaji is not selling technology, but rather seeking a partnership with Funders where the two parties share the upside. Our strategic objectives are therefore aligned as Mtaji only earns from the value it has helped to generate.
- Free strategic resources: Mtaji boasts of a strong team of experienced Bankers, Business consultants, and technology experts with many years of experience and who have implemented similar platforms before. The Funder, therefore, benefits from the practical experience of the Mtaji team in the form of training, product development, etc
- We are your outsourced origination team: We facilitate the onboarding of the Bank, Buyers, and suppliers and ensure full compliance with regulatory KYC requirements. We support the Funder throughout the origination process thereby significantly reducing costs and risk. Further cost-saving is achieved through embedded legal documentation.
- We are a co-marketing Partner: Being a marketplace, it is in our best interest to onboard as many buyers and suppliers as possible. We, therefore, become a co-marketing partner of our funders on the platform, complementing the efforts of their relationship team in bringing new business.
- We serve as the Supply Chain Subject Matter Expert: We work with the Funders to develop internal products, obtain approvals, train their staff and support clients. We continuously build the capacity of the Funder team (as well as the buyer and supplier teams)
How it works
An interested Funder Completes our Expression of Interest form, noting to provide requisite documentation
Platform Admin reviews the information and engages Funder to clarify matters. Feedback is received within the hour of application
Funder completes onboarding process in 3 easy steps i.e. Account Set-up, Personal KYC details of Admins, and Funder Company KYC details (approximately 30 minutes)
Funder connects to Mtaji API (Other options exist).
Funder completes Risk Acceptance Criteria to be matched with Buyers on Platform
Funder and Buyer execute legal documentation and Funder instantly begins to receive invoices from Suppliers of respective buyers