Damansah Smartshop

The Problem

For the entirety of their life, African micro and small businesses remain tiny while they make up 90% of the business landscape. Moreover, they usually end up being denied of loans by Financial Institutions because they look risky as they usually do not have financial records to show for the performance of their businesses. African entrepreneurs from the informal sector have difficulties to optimize their business growth.

The solution

We built a mobile application named Damansah Smartshop that allows business owners to improve their selling capabilities, help them collect electronic money and easily record and track their financial transactions.

The impact

We believe that empowering small businesses and helping them grow, will promote the growth of our economies and solve some of the societal issues we suffer from. For instance, It will help us in reducing unemployment as more jobs will be created.

In its working paper, "Targeted SME FInancing and Employment Effects", the World Bank says that  90 to 95 percent of MSMEs are in survival mode. Meaning, that owners struggle to make ends meet and there is no sight of growth. This is equivalent to more than 400 million MSMEs which is huge considering the importance of MSMEs growth for developing economies. 

One of the factors contributing to that problem is the limited customer reach that most MSMEs have. This is addressed by the International Chamber of Commerce in its proposal "WTO Business focus Group 1 – MSMEs and E-commerce" in which it highlights the opportunity that represents E-commerce for the growth of MSMEs. 

Another factor is the finance gap that exists for MSMEs in developing economies which according to the SME Finance Forum amounts to $5 Trillion. In Sub-Saharan Africa specifically, it amounts to $331 Billion.

What is it?

Damansah Smartshop is a mobile application that aims at increasing sales, collecting payments in the form of mobile money, and organizing our customers' finances. 

What does it do?

The app has a wallet that allows users to collect mobile money offline and online and also transfer money to any mobile money account.

The app allows a user to generate his own online store and be part of our marketplace.

The app allows the user to track his debtors, send them reminders and collect money from them. 

The app performs some analysis on the user's transactions to derive insights for the user.

It allows the user and his partners or employees to work collaboratively. And he is able to track others' activities.

It allows them to generate reports on their business's performance

What process or technologies does it use?

We use mobile and web technologies.

Who are they?

We target two types of customers.

The first type customer sells on social media but faces huge competition. He  struggles to collect money efficiently from his customers, plus tracking transactions is a daunting task. And the fact that he has no shop, shows instability to potential lenders. 

The second type of customer has a physical shop and is seeing no growth in his sales. He is looking for ways to get more customers. Because, he is not seeing much sales, he does not take note of the few transactions happening. 

What are we doing to understand their needs?

We have put our product in their hands so they can interact with it and we can measure if it solves their problem. We call them, meet them and make necessary changes to the product.

How will the solution address their needs?

The solution is helping the first target customer differentiate himself and have other opportunities to increase sales, collect money and track transactions automatically. 

The solution is helping the second target customer by allowing him to have a presence online and therefore have the chance to present his products to more potential customers.

We believe this challenge is all about growth and giving opportunities to small businesses to thrive even in the difficult setting they find themselves in.

And that's basically what we are addressing. Our target population is concerned with increasing their chance of success and make a decent living. And with our solution, they are able to achieve higher profitability and prepare themselves for capital raising to even aim higher. More importantly, businesses growing means they will need more human resource. That will accelerate the decrease of unemployment in our societies.

When talking about factors that hinder the growth of small businesses, we are usually told that the problem comes from the Financing Gap. We believe that, yes it is true that access to capital is important to SMEs growth but access to market or clientele is as important. 

That is why we differentiated ourselves from companies like OZé or Keiwaa in the sense that we do not only try to help small businesses keep proper financial records in the hope to have access to capital but also the fact they are able to show growth and potential of growth to financial institutions. This is achieved by broadening their customer reach and helping them keep good financial records showing that they are able to manage funds efficiently.

We use mobile and web technologies. We use hybrid technologies that allow us to be able to easily reach our customers the most two platforms used that are android and iOS.

We also use the mobile money technology to power our payment feature.

Mobile money technology is widely used as we have the example of M-Pesa among others. However, in our case, we use two partners that are CinetPay and AppsnMoblie that power payment processors like Flutterwave.

We expect our solution to increase the number of potential buyers that will come for our customers products and therefore increase their sales. Secondly, we believe it will also help them keep up to date financial records as it will take them much less time to record a transaction that it takes with a book and the fact that their ecommerce sales are recorded automatically.

We believe that this is going to spark their growth and they will be able to invest more in their businesses. It will then show their potential to financial institutions and how well run they so that they can have access to capital and therefore expand their businesses further.

This will therefore allow them to have a better life and take care of their families adequately.

Our solution currently serves 1,500 micro businesses. Our aim is to grow quickly and reach 50000 people by the end of next year. In Five Years, we hope to cross the 500000 mark across several African markets.

Our main goal is to help micro businesses grow. Our goal for next year is to have a 30% profit growth across all of our users. We would like to achieve this by not only allow our businesses to have an online store, we are going to promote their products by showcasing their products on a marketplace and use social media to drive people to their products.

In the next five years, we believe we would have accompanied 20% of our user base to become small to medium scale and we believe we can get them further so we will provide them with a product that will fit their needs that we called Damansah Pro that will push even further in the formalization of their businesses.

The main barrier is local context. Africa is a highly segmented market and transitioning from countries to countries proves to be a highly daunting task. We believe that if we are able to achieve that it will allow us to grow tremendously.

Well, we plan on overcoming that by acquiring local talent so we can profit from their experiences and knowledge. That is going to help us penetrate different markets faster. We want to also partner with banks and associations so we can bring this solution to their customers.

The team is comprised 9 full time people and 1 contractor.

We come from a diverse set of backgrounds as some are having a                    technology background, others from Finance but at a point in time we all had some experience with running a small business. So we understand what being an owner of such a business entails and how difficult it is to actually grow it. We also have a set of different skills, going from programming to UX design that allow us to not only gel as a team but also produce product that could lead to change.

We have partnered with payment processors such as CinetPay and AppsnMobile. They provide us with payment infrastructures so we are able to allow our users to perform mobile money transactions.

We have also partnered with Comman Ya, a women-focused incubator so our solution could be used by the incubated businesses.

Our customers can be found online and offline.

We target the online segment. We target those who have businesses through targeted ads but also reaching them in social media groups. We went after them because we believe in their ability to use the product. Secondly, these are people that are really quick to share things they are proud of using or doing which we aim our product to be. They are looking for ways to broaden their reach and differentiate themselves which we are doing through their own online store and our marketplace. Also, they can easily receive online payment through our payment system and manage their finances.

We also target sellers in markets and on the streets and we hope that they will be impacted by the actions and success of the online segment. They are usually harder to convince but we believe these are the one that will benefit the most from our product. We believe that peer pressure and the inner feeling to want to succeed will make them want to come to us as they too are struggling to grow their clientele and are looking for ways to do that.

Ultimately, we hope to make sure they are able to access enough capital to expand their businesses.

We will earn money through mobile money transactions via the online stores or any other form of mobile payment done on our app. Secondly, our users will pay a subscription fee to be able to use the app for a certain period of time.

We also plan on raising capital in the next 3 months so we can accelerate our growth and impact.

We are applying to MIT Solve Challenge to be able find partners to work with and funding. The funding is going to help us scale the solution and improve its capabilities. Also, it is going to help us hire the right people in the next market we are going to deploy our solution. Partners are going to help us penetrate these different market and hopefully allow us to reach our targets.

We are looking for a partnership that allows us to :

•  Increase our user base,

•  Provide new services to our users.

The GM Prize on Good Jobs and Inclusive Entrepreneurship is looking for 

solutions that enable working-age adults to build the skills and
resources they need to access well-paying jobs in a changing marketplace. From our understanding, this is about making sure that they have good income to take care of themselves.

And this is what our solution is all about. It is about is about enabling adults to improve their businesses profits and make sure they access market and capital so they can provide for themselves and their families.

We are qualified for this prize because our solution could scale and have a real impact on the lives of millions of Africans that are looking to grow their businesses and simply have a better life. Our solution is allowing them to increase their revenue and improve their financial literacy. These are very important for them to achieve financial stability.

Our solution is a mobile application which can reach millions of people as the mobile penetration is very high in Africa , sometimes attaining 100% in certain countries.