Unilever is offering small traders low-cost credit to stock up its fast-moving consumer goods as it overhauls its supply chain.
Through the model used by established retailers such as supermarkets, the traders can get up to 35 per cent of their stock on credit and pay as little as 3.5 per cent for the facility.
The traders will also enjoy up to 17 days grace period and no interest will be charged if they pay back within this period.
Unilever Customer Development Director Luck Ochieng said up to 10,000 small traders have signed up for the facility, with 8,500 of them taking up Sh245 million in credit.
“We wanted to help our customers’ stock large quantities of products because we realised the challenge was lack of credit,” said Mr Ochieng in Nairobi yesterday.
The Anglo-Dutch firm, which manufactures several products, including Blue Band margarine, Omo laundry powder, Vaseline petroleum jelly and soaps such as Lifebuoy, Geisha, Rexona and Sunlight, said it believed this model would drive up the consumption of its products while allowing small traders to scale up their operations.
The project dubbed Jaza Duka targets small-scale traders with big data that allows them to borrow and repay over short stints of time, creating a credit history that allows for increasing the amount of credit that can be borrowed.
The programme also helps train traders on basic accounting and managing their profit and loss books.
The consumer goods firm said the programme, which is a collaboration with MasterCard and KCB Group, has been launched in 29 of the 41 distribution points across the country, with western Kenya getting its package last week.
“The initiative combines distribution data from Unilever and analysis by KCB on how much inventory a store has bought from Unilever over time.
“The results from the analysis are used to provide micro credit eligibility by KCB,” said Denis Njau, the KCB head of channels.
According to Ochieng, the firm was targeting 38,000 small retail stores, which would likely boost stock uptake by 35 per cent. Unilever distributes up to 60 per cent of its stock through wholesale and small retail shops, with 40 per cent going through modern traders such as supermarkets.
Its supply chain was interrupted over the past year as a result of the troubles at Nakumatt and Uchumi supermarkets, which went under with the multinational’s cash.
Uchumi owed multinational suppliers, including Unilever, Nairobi Bottlers, a subsidiary of Coca-Cola Sabco and British consumer goods maker Reckitt Benckiser, Sh1.2 billion.
Unilever pulled its products from the shelves of Nakumatt over unpaid supplies as the ailing retailer went bust. Ochieng said the company had bounced back, with sales shifting to alternative chains, including Naivas and Tuskys, their biggest customers at the moment.