KHANA CAPITAL: Fintech with SMMEs in mind
Khana Capital a new player in the game, is slowly building its brand to become a trusted partner to go to when looking for supply chain financing. What makes the company tick is that it offers these services through innovative and digital financing solutions. Below KOOBONYE RAMOKOPELWA talks to Chief Operations Officer, Reitumetse Lekoko on a wide range of issues.
BOTSWANA GUARDIAN: Kindly introduce your business to our readers?
REITUMETSE LEKOKO: Khana Capital is 100 percent youth and citizen owned supply chain fintech ( financial technology) company. Through technology and innovation, we provide affordable, flexible and convenient financing to SMMEs.
GUARDIAN: How has your company been received by the market?
LEKOKO: We are extremely encouraged by the market’s reaction to our products, particularly our financing platform. It is evident from the market reception that there is a strong need for the services we provide.
Our government implemented the very commendable initiative to engage local suppliers where possible, and when the service does not compromise the end- users’ experience. We at Khana Capital applaud this, however these businesses cannot grow without adequate support. Many small and medium sized businesses are in need of flexible and affordable financing options. Our company is best placed to assist. We also encourage business leaders ( private and public sector) to follow government’s example. Leaders need to understand their organisations’ value chain intimately, and appreciate the strength of a strong supply chain, where suppliers have access to affordable and quick financing.
The success of more SMMEs will create more opportunities for employment, economic diversification, increased use of technology as well as youth and women empowerment in the economy.
GUARDIAN: How did you fund your business?
LEKOKO: This was one of the hardest aspects of our business. We knocked on every door possible for financing and got turned down. Despite the strong value proposition of our business. It was extremely difficult but a good lesson in patience and persistence. We wanted to demonstrate the business case and build a track record. Over the past two years we slowly built the business on extremely limited funding. To answer the question shortly, the business is funded through shareholder equity and crowd funding. We are now working with commercial banks and credit insurance agencies to raise large amounts of capital, to have a bigger impact on the local market.
GUARDIAN: Who is your target market?
LEKOKO: We partner with large private and public sector companies that have significant supply chains. Typically, any organization that spends more than P 2.5 million pula a month in supplier payments. We sign agreements with these organisations that permit Khana Capital to finance their valued suppliers directly. We make a commitment to
provide cheaper and more convenient financing for suppliers. The aim is to support and help SMMEs grow, which in turn lowers costs and improves efficiency for the large companies.
GUARDIAN: What have been some of the major challenges that the company experienced during its initial years of operations?
LEKOKO: A big challenge was how reluctant many organizations are to embrace technology and innovation, even when the benefits are well understood. Most organisations in Botswana are not very adaptive and flexible. We do not have a work culture that encourages initiative and innovation, so when you present a new and exciting solution to leaders, it often does not get the attention required. Although it must be said, from the business leaders, to senior representatives of commercial banks, to development agencies and government officials, we have been incredibly fortunate to work with some fantastic and supportive people. I think the challenge lies in the institutions. The way organizations are structured and how leaders are incentivized. Whether or not staff have the support to fully embrace a new idea.
GUARDIAN: How did you manage to overcome those challenges?
LEKOKO: Patience! We took time to explain and demonstrate our solution to prospective clients. We created a space for discussion and questions. We strongly believe the solution speaks for itself. Once prospective clients really understand our service offering and the benefits, this usually assist to overcome the initial reluctance.
Secondly, we listened to our clients and observed the market. We like the saying ‘ listen to understand.’ It is extremely important that we understand all of our clients’ concerns, risks and threats to the business. We are meticulous about understanding what exactly is wanted by our clients; what the associated risks are and what their priorities are. We then tailor our solution to ensure it addresses their needs and protects the clients from all identified risks.
We are blessed to have a hard working and passionate team. We like to believe that our clients get a sense of this over the span of our engagements. We know that this has helped tremendously.
GUARDIAN: How has COVID 19 affected your business?
LEKOKO: COVID- 19 was a tough time for many families and our condolences go out to everyone that lost a loved one.
Our lending activity really started at the tail end of COVID- 19, so we were not directly affected. However, COVID- 19 demonstrated the importance of a robust supply chain to organisations. The pandemic also accelerated the adoption of technology in Botswana. People are now comfortable with logging onto a website or app to purchase goods or services. This saves both time and money. Our Financing app works similarly, and users are quick to catch on.
GUARDIAN: Where do you see your business in the next five years?
LEKOKO: We have something incredibly exciting that we are working on and development is just about to commence. I cannot say too much about it. We see Khana Capital as a Botswana based sub- Saharan supply chain financing company. Our goal is to be the most inclusive financing company, providing great financing products and competitive prices to the traditionally underserved sectors of the economy, including informal traders. Through a clear vision, good understanding of the market and employing effective technology, the sky is the limit.