Taverns are an unmistakable part of the Kasi ecosystem where cash reigns supreme. But just like any other business, these businesses are at the mercy of cash flow availability. In spite of the industry’s estimated R40 billion (with a B), more than 34 000 licensed tavern owners are swept with the currents of needing funds to cover immediate business expenses. Now, one partnership between Kazang and TymeBank is changing everything.
Kazang, owned by Lesaka Technologies, has partnered with TymeBank to bring affordable digital tools that offer working capital solutions to the cash-related risks that tavern owners face.
The Partnership Between Kazang Capital and TymeBank
The partnership entails instant business funding that will be available within 24 hours of applying. This is made possible through Kazang Capital’s prepaid value-added services (VAS) and card acquiring technology, and TymeBank’s digital banking services.
Merchants such as tavern owners or liquor shop owners can access working capital through the Kazang point of sale (POS) devices. No paperwork is required, and there are no hidden fees.
How Accessing Working Capital Works
Where other traditional funding institutions rely on mountains of paperwork to assess a business’s fundability, Kazang Capital relies on actual transactional data for digital transactions captured through the Kazang POS. This alternative way of looking at business records helps the funder assess affordability and determine a suitable advance amount.
Pre-approved advances can be used to fill any cashflow need, be it to expand, restock or upgrade the business.
This process is a game-changer for tavern and liquor store owners. Instead of formal routes of accessing working capital to conquer cashflow hurdles, pre-approved advances look at the specific trader’s needs and whether they can pay back this short-term loan based on sales. Since the sales data is recorded immediately, there is no need to rely on formally audited business records that verify that sales really did occur at a particular point in time.
The shift in focus is one that is welcomed by many informal traders, as it doesn’t require numerous documents that need to be collected and long forms that need to be submitted, saving them time and money.
Why Digital Transformation Is Important
As fintech companies expand their support for the informal market, it brings about change that enables these businesses to run more efficiently and profitably.
The devices that are typically sold to merchants are underpinned by services that extend to inventory management, card acceptance, and digital supplier payments. The result is a comprehensive ecosystem solution.
A single Kazang device, for instance, allows for real-time stock tracking that allows owners to not only remain on top of stock levels and what needs to be ordered, but to spot trends that can be responded to competitively.
Additionally, they can sell other products such as airtime, electricity, and bill payments from a single device. The Kazang device also stores funds in a digital wallet that enables owners to pay fast-moving consumer goods (FMCG) suppliers electronically for stock purchases.
Most importantly, these devices are creating a track record that can help merchants to access funding – something that has previously only been available to formal businesses with a thoroughly documented operational history. But partnerships and tools such as this one between Kazang and TymeBank are opening doors to many traders who would previously have been excluded from accessing the funds to help them run and grow their businesses.
Digital transformation, therefore, helps businesses increase profitability through operational efficiency, but it also allows merchants to enhance the sustainability of their businesses.
“We are using our fintech platform and digital data to address this challenge in line with our mission to improve financial empowerment in the informal market,” says Ronan Jones, head of capital at Kazang. “We are able to use transactional data to offer responsible working capital solutions to merchants who are excluded from traditional financial products.”
Cashflow fluctuations throughout the month, or those that are dependent on seasonality, cause concern to merchants who know they can afford business expansions or operational costs, but they ‘just don’t have the funds right now’. But a short-term working capital loan changes this. It provides access to a capital advance to make the payments that are necessary, while allowing the business to pay back the amount in reasonable instalments and within a reasonable time.
Taverns are an unmistakable part of the Kasi ecosystem where cash reigns supreme. But just like any other business, these businesses are at the mercy of cash flow availability. In Read More
