Standard Bank-backed fintech Nomanini plans Ghana, Zimbabwe, Egypt expansion

By David Whitehouse
Posted on Thursday, 15 September 2022 06:00

Africa's informal merchants need digital solutions. REUTERS/Afolabi Sotunde

Nomanini, a South African fintech supplying digital commerce solutions to informal traders, is planning to expand to Ghana, Zimbabwe and Egypt, CEO Vahid Monadjem tells The Africa Report.

The company is currently seeking $5m in equity to finance its growth, with a larger debt round for $20m to $40m planned in the next 18 months. Launches in Zimbabwe and Ghana are set to take place this year.

Set up in 2010, Nomanini provides till-point services for informal retailers, and supplies credit to enable them to free up working capital. The company’s tool can be used by merchants to integrate third-party inventory management and employee payroll systems.

Partners include Nestlé, the world’s largest food and beverage company, and Standard Bank, the continent’s largest bank, with whom the Trader Direct till-point solution was developed. Standard Bank is also a shareholder, as are impact investor Goodwell and Dutch development bank FMO.

According to McKinsey, the fact that cash is still used in around 90% of transactions in Africa means that fintech has huge potential to grow. African fintech revenues could reach eight times their current value by 2025, McKinsey said in a report in August.

Still, the report says, lower disposable income and customer loyalty in Africa make it harder for fintechs to build profitable business models than elsewhere. Given similar investment per customer, it is almost four times harder to achieve fintech profitability in Africa than in Latin America, and 13 times harder than in the European Union, McKinsey says.

Monadjem plans to use the debt finance to buy between 10 and 15 “legacy” distributors of mobile phone airtime and accelerate the roll-out of financial solutions for merchants. The strategy, he says, is to “defragment underserved markets” and create a “digital services hub for the community.”

Nomanini says that retailers who access working capital credit have an activity rate about 30% higher than those who do not. In July, the company announced a partnership with financial-services provider Baobab to supply retail supply chain finance in eight African countries.

The timetable for entering Egypt, though a “near-term” target, hasn’t yet been defined.

  • Nomanini is now in final discussions with a potential partner with a  view to getting access to 100,000 informal retailers.
  • The company always works with partners as it isn’t economically viable to build a retailer network from scratch, Monadjem says.

Zambia case study

The company in August published a case study based on customer research among 250 retailers in Lusaka. Zambia is one of Nomanini’s most mature markets where it has close to 10,000 merchants. The survey found that 69% of merchants had a better ability to manage their finances since using Trader Direct, with 70% saying that their overall quality of life had improved.

Two thirds of the retailers said that the most common challenge experienced with Trader Direct is network connectivity,  which often results in system downtime.

  • Trader Direct is rolled out with pre-inserted SIM cards under a partnership with a mobile network provider in Zambia, so the company says it wants to tie up with other mobile network providers with better network connectivity in the country.
  • Nomanini is also exploring giving retailers the option to select their network preference and buy the SIM card themselves.

Bottom line

Nomanini is betting that turning retailers into digital services providers can help solve the problem of fintech customer acquisition and retention.

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