Growing SA's informal market

Zande Africa’s innovative informal market solutions bring efficiencies to spaza shops.

- Glenneis Kriel

In 2015, the absence of credit solutions for spaza shop owners led to bankers Siya Ntutela and Mdu Thabethe deciding to fill this gap by starting their own financial services company, Zande Africa.

“The name of the company was derived from a Nguni word that means ‘to multiply’, in reference to our objective to unlock the spaza shop economy, which boasts an annual revenue of over R40bn,” says Ntutela.

Their subsequent analysis uncovered that supply issues were an even greater challenge than cash constraints. “Spaza shop owners, at least once a week, have to either close shop or employ someone to run the shop while they are away buying merchandise. To address this challenge, we added supply and logistics solutions to our product offering,” says Ntutela.

Unlocking a market

Getting the initiative off the ground was easier said than done and had to be self-financed by Thabethe and Ntutela. In 2016, Zande Africa received a R1m injection from Merrill Lynch South Africa and AlphaCode, and won R750 000 when it took third place in the SAB Innovations Awards programme in 2018.

“There is a lot of great innovation competing for funding out there, so winning in some of these rounds proved to us that our business idea was on the right track,” Ntutela says.

As newcomers to the fast-moving consumer goods (FMCG) industry, Ntutela and Thabethe had to work hard to build the trust of suppliers and spaza shop owners. FMCG companies also have highly formalised distribution networks, so it took a lot of effort to persuade them to change their business practices and supply spaza shops more directly.