The COMESA Business Council signed a USD 1.5 million grant from the Bill and Melinda Gates Foundation to offer technical support to Small and Medium Enterprises through a digital financial platform.
The grant which is spread across two years -2019/2020 will be implemented in partnership with the Kenya Association of Manufacturers.
The Project will support the design, development, and deployment of a low-cost, interoperable and fraud-resistant integrated digital financial services for SMEs.
“The project will focus at looking at how SMEs perform when trading across borders within the region,” said Ms. Sandra Uwera, chief executive officer COMESA Business Council.
Sandra said ten countries will be used to carry out the feasibility studies in the development of a harmonised common payment policy for MSMES Africa which is in its second phase.
80% of the business community in COMESA is governed by SMEs. A large number rely on cross border trading relationship. The SME sector is largely informal and as a result, transact very inefficient and risky cash and cash-like methods.
“When SMEs are able to transact digitally, they move from an informal to a more understandable business, they become accessible and bankable”, added David Lubinski of Bill and Melinda Gates Foundation.
“Traditional methods of trade on hard cash exchange will be cost-effectively migrated towards digital solutions and this goes to support efficient and lower risk payments contributing to the financial strength of SMEs”, said KAM Chair Sachen Gudka.
Countries in the pilot include Egypt, Ethiopia, Mauritius, Rwanda, Kenya, Uganda, Burundi, Zambia, Zimbabwe, and Malawi.
According to Sandra, the overall impact of the project is the establishment of a business model for a common payments scheme for MSMEs, that goes beyond facilitating affordable and real time transactions for them to include strengthing the visibility and promotion of products and services for this market segment within the COMESA region.
Also present at the launch was, Kenya Association of Manufacturers (KAM) CEO, Phyllis Wakiaga who reiterated the need to come up with solutions for some of the challenges facing SMEs if we are to wholesomely contribute to the development agenda of the country.
“As an implementer of this project in Kenya, (KAM) looks forward to promoting trade for SMEs in the country, added Wakiaga.
The Digital platform for SMEs goes beyond facilitating affordable and real time transactions for SMEs to include strengthening the visibility and promotion of products and services for the market segment within the COMESA region.