Standard Bank takes stake in fintech firm

Standard Bank has taken a stake in fintech firm Nomanini to offer credit to potentially millions of small shop owners and other informal retailers across Africa that have limited access to banking services.

Africa’s biggest bank by assets has invested $4m (about R61m) in Nomanini, which connects informal merchants with distributors via an e-wallet, and aims to roll the service out across 14 African countries by early 2021.

Nine out of 10 retail transactions in Africa are conducted in cash or via informal channels such as kiosks and openair markets, according to a 2017 report by Deloitte.

Using Nomanini’s technology, Standard Bank will collect and analyse data on the retailers.

Standard Bank head of digital in Africa regions Adrian Vermooten said data on just one primary product line, such as prepaid airtime, was enough to proxy the risk associated to a shop, build up a financial profile and understand its ordering patterns.

This would allow the bank to pre-empt traders’ restocking needs and send them alerts offering to arrange and underwrite their next order, for instance.

This could be done via Nomanini or Standard Bank devices supplied to the traders or by leveraging other existing networks or devices from third parties – whatever fits best in each market.

Vermooten pointed out there were tens of thousands of informal traders who acted as mobile money agents in African countries.

“Those are all small businesses that we find really attractive,” he said.

At a later stage, the bank will look to help those retailers offer financial services, such as cash deposits and withdrawals, to their customers.

Nomanini founder and CEO Vahid Monadjem said even just 100,000 retailers could reach between 50-million and 150million people.

Standard Bank hopes that its licences to lend and offer other products, such as insurance, will give it the edge over mobile operators that dominate financial services in markets like Kenya. – Reuters