DURBAN - The spaza shop market is valued at around R40 billion per year and 90% or more of the transactions are cash. This market is growing at around 10% each year.
Due to several spaza shop owners not having access to banking facilities, it makes it difficult for them to deal with fast-moving consumer goods companies who generally do not open lines of credit for retailers that order in small quantities.
It was this gap which led to a local financial tech company, Invoiceworx (now Zande Africa), to offer an innovative financial and distribution platform that provides trade and merchant finance to spaza shops.
Zande was founded by chief executive Siya Ntutela and chief operating officer Mdu Thabethe to help spaza shops access crucial finance in 2017. “One of the primary reasons South African spaza shop owners don’t succeed is a lack of finance and broken supply chains,” said Ntutela.
The business provides cash and credit service offerings to all spaza shop owners and transacts with any spaza shop that wants better pricing and better service.
“The credit facility we offer assists owners to fill their stores and avoid stock outs. Providing this working capital unlocks the trading and employment potential of thousands of individuals and businesses.”
Zande provides lines of credit to spaza shops so that they are able to buy stock. This is done through a micro distribution model to allow the spaza to take advantage of better pricing directly from manufacturers and producers. The spaza owners build a credit score by trading in cash with Zande over three to six months.
The USSD technology developed by Zande allows the owners to apply for credit, check outstanding balances and make payments using their phones. The platform also facilitates cashless transactions between suppliers and retailers, in the process eliminating the cash-in-transit risk for suppliers.
Invoiceworx changed its name to Zande Africa, which means to multiply. “The new name better reflects our business and our evolution into mobility and scaling of the business,” said Ntutela. “We are now ready to fund-raise to boost the speed of our growth.”
The business won third place in the SAB Foundation Social Innovation Award 2018 and won R1 million and support from Merrill Lynch South Africa and AlphaCode in 2016.