“A country’s economic growth may be defined as a long-term rise in capacity to supply increasingly diverse economic goods to its population, this growing capacity based on advancing technology and the institutional and ideological adjustments that it demands.” Simon Kuznets
For centuries, World trade in essential goods-also referred to as Fast Moving Consumer Goods (FMCGs)- has been done informally with most of the trading done by small and medium scale retail shops and enterprises.
In Rwanda, just as elsewhere in Africa, the vast majority of trade in essential goods is done through small informal retail shops. Small and medium enterprises employ the largest percentage of the country’s working population both formally skilled and unskilled. That; therefore, means that small and medium enterprises contribute to Rwandan society’s household incomes and, overall, the country’s tax base.
For all their importance to the communities with immediate benefit and the Rwandan economy as a whole; however, small and medium retail shops and enterprises; routinely run out of stock, lack easy access to financial services, lack business management tools, face delayed repayment on credit sales and defaulting due to unreliability of paper records and lack a digital presence.
Entrepreneurs and national governments have tried to address aforementioned challenges faced by small and medium enterprises in Africa. In Rwanda, for instance, the government made it mandatory for all small and medium enterprises to be registered and use electronic billing machines in a bid to help track their business dealings and tax them accordingly.
While public policy on small and medium enterprises helped have proper mechanisms within which these enterprises operate, it did not address the issues of out-stocks, lack of timely access to capital to run their day-to-day operations and lack of a digital presence, inter alia, retarding sustainability and growth of small and medium enterprises.
Fortunately, for Rwandan small and medium enterprise operators, a product- Kayko– was conceived by Rwandan entrepreneurs to help address the challenges crippling the growth of small and medium enterprises sustainably.
Innovators behind Kayko set out to do three key things with their technological innovation;
Currently, small and medium enterprises do not have a digitized mechanism for capturing, organizing, storing and analyzing data about their business operations to be able to generate meaningful decisions out of it. Kayko is equipped with accounting tools to record transactions in real time, business analytics tools to analyze business operations and automatically generate performance records for enterprise operators.
Kayko’s ecommerce tool helps businesses put their merchandise online. By putting merchandise online (having a digital presence), businesses are able to reach a broader market base they could not, otherwise, be able to reach. This, also, avails dealers with an opportunity to sell to consumers in any place without confinement to physical location.
In the same manner, Kayko’s accounting and business analytics tools help enterprises access working capital without necessarily presenting collateral assets as hedges. Data on financial transactions and business performance of the business is a basis for lenders to decide on whether the borrowing entity is creditworthy.
Also, the accounting tools help enterprises capture credit sales in real time and, as a result, are able to seek for timely repayment from buyers-on-credit. Reduces losses from unrepaid credit purchases by clients.
Much more than that, Kayko helps businesses monitor their inventory movement in real time. Businesses are enabled to monitor the reduction in available items. Ability to access working capital and know the reduction in items of trade enables businesses to maintain an optimum level of stock, reduce procurement costs and maintain good rapport with clients by availing to them products they need when they need them.
As formerly discussed, small and medium enterprises employ a majority of the country’s working population. Empowering these enterprises to operate sustainably and grow means that people employed by them are afforded an opportunity to have sustainable jobs, better incomes and improved skillsets from formalization of the enterprises’ business operations.
Taking everything into account, it is right to argue that, with its innovative tools, Kayko is positioned to push the informal retail sector and the rest of the small and medium enterprise space into lasting growth and, subsequently enable stakeholders within the sector generate more economic value from it through improved earnings for business owners, better salaries for employees, more tax revenue for government and increased household incomes for business owners and employees.