Pioneering fintech company Nomanini has announced the close of a USD 4 Mn (around ZAR 61 Mn) funding round led by Standard Bank with participation from Goodwell Investments, fintech and financial inclusion-focused investment firm based in Amsterdam.
By way of this strategic investment, Africa’s largest bank has gained an unspecified stake in the company, with which it can use Nomanini’s platform to uncover data pertaining to the informal retail economy.
Nomanini, founded in 2010 by Vahid Monadjem, connects informal merchants with distributors through an e-wallet and physical device. Over the years, it has been enabling merchants to use the same device to offer basic banking services to their communities. It’s evident why the fintech’s data is important for Standard Bank, who of course intends to retain its position as the most significant bank in the continent.
Leveraging business analytics, the bank will be able to offer a mobile app that provides access to new business lines, credit, and savings for millions of non-formal merchants across 14 African countries. With the investment, Standard Bank is likely to start offering credit to millions of small firms across Africa.
According to a 2017 report by Deloitte – an auditing company – 9 out of 10 retail transactions in Africa are concluded in cash or via informal channels such as kiosks and open-air markets. By laying hands of Nomanini’s data, Standard Bank will be able to serve these countries, without the consumers having to set foot in a bank branch or leave their points of sale.
The bank and the fintech have a common mission, which is to lend a hand in growing the informal retail trade and the commitment to branchless banking to help customers from anywhere and at any time, respectively.
The deal is a good one in the sense that data analysis through Nomanini’s platform will enable the creditworthiness of micro-merchant will become more accurately assessed. This, in turn, will enable many of these merchants to become qualified for working capital loans.
According to a 2017 McKinsey report, Africa is the world’s second-fastest-growing banking market. By launching the new app in South Africa, Zambia, Nigeria, Angola, Ghana, Zimbabwe, Kenya, eSwatini, Lesotho, Mozambique, Malawi and Namibia, Standard Bank will be able to boost access to financial products.
At the same time, the bank will be expanding its customer base and address the business needs of the continent’s informal retail sector. For the merchants using this service, it means more ongoing trade, increased return customers and the sale of additional goods and services.
Adrian Vermooten, Standard Bank’s head of digital in Africa regions, said data on just one primary product line, such as prepaid airtime, was enough to proxy the risk associated to that shop, build up a financial profile and understand its ordering patterns. This will create room for the bank to pre-empt the trader’s restocking needs and send them alerts offering to arrange and underwrite its next order, for instance.
Vahid Monadjem, founder and CEO of Nomanini, said even just 100,000 retailers could reach between 50 million and 150 million people. In an official report, he also said that the company is open to partnerships with other banks elsewhere, but that its partnership with Standard Bank will keep the fintech company busy for a very long time. Nomanini has offices in Johannesburg, Cape Town, and Lusaka.
While it is not the first time Goodwell Investments is financially considering the fintech, Nomanini, according to Crunchbase, has raised more than USD 1.1 Mn in three previous funding rounds. In 2018, Goodwell raised USD 24.6 Mn to invest in Sub-Saharan Africa’s impact sectors, so it’s obvious where the money is being put into – Kenya’s Copia is one of them.
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