As a teenager, Marie-Reine Seshie would help her mother in her small grocery business, where she had first time experience of how challenging it was getting consistent access to much-needed goods.
These challenges were – and still are – replicated across the continent. Women-run small businesses are the main source of income for women to provide food, education, medical treatment and more for their families, while creating jobs in the community.
Across Ghana and Africa, SMEs contribute over 70 per cent of GDP and employment, but have disproportionately less access to markets and financing.
“The biggest issue that makes MSMEs risky businesses and hence the US$400 billion financing gap in Africa, is a lack of consistent cash flows,” Seshie told Disrupt Africa. “Our research showed that most MSMEs struggle with overstocking, which leads to inconsistent sales, hence cash flows, defaults and loss of already slim margins. So our hypothesis is that if we can help these businesses stock right, then the ripple effect will correct the corresponding sales and cash flow issues, and make them investable entities.”
Since 2021, Seshie has been doing just that with her startup Kola Market, a full-stack platform providing sales-as-a service, smart inventory and product financing to SMEs through machine learning.
“We believe it is not enough to provide financing or a sales recording system for SMEs. SMEs need support to first have a consistent way of driving sales and then financing on top of that becomes catalytic for growth,” she said.
Kola Market’s e-commerce platform e-Pos, sales and workflow management, and inventory management tools provide a holistic way for SMEs to build and grow profitable businesses. As a banking executive prior to launching the business, Seshie co-created a cash management system that leveraged inventory management and trusted networks to disburse over US$100million worth of non-collateralised financing to small businesses, with high returns and high recovery rates, and near zero defaults.
“I knew then that there was a tangible way to profitably finance MSMEs, but it needed an unconventional approach, a sales-first approach,” she said.
“I first thought of management consulting to guide these SMEs, which I did for a period. I learned from that experience that SMEs needed practical hands-on support. I went back to the markets to engage business owners and found that most of these SMEs would rather have consistent sales than take on financing. It was then it clicked for me that the solution I had created in the bank was not a simple financing issue – but the success of it was highly dependent on solving the inventory issue first and then leveraging the power of existing networks.”
This was a pivotal moment, leading to the founding of Kola Market, the name of which stems from the renowned Makola Market in Ghana’s capital Accra.
“The model we run today identifies the most profitable and fast selling products and finances those specific products for MSMEs, which is a way to guarantee consistent sales and de-risk SME,” said Seshie.
“Consistent sales is the cornerstone of our work. We hyper focus on best selling products with good margins. This provides the right conditions for our MSME partners to grow their incomes and profits, and pay back loans easily.”
Kola’s primary customers are the middle of the value chain – retailers with monthly turnover of US$100 or more, and wholesalers with US$1,000 or more monthly turnover.
“We also work with manufacturers and distributors looking to penetrate the retail market and who rely on our go-to-market services. We connect them to our retailers and wholesalers, and finance their value chain,” said Seshie.
“Soon, we will be partnering with financial institutions to extend augmented services to our de-risked portfolio of MSMEs.”
Kola is quickly becoming the preferred platform for suppliers looking to reach these markets efficiently. In 18 months, it has helped over 500 small businesses increase sales and profits by 25 per cent on average, and deployed over US$5.8 million GMV in product financing and fast-selling food and livelihood items.
Seshie said she envisions Kola to be a large aggregation platform for small businesses in Africa.
“Think Expedia or Booking.com for small businesses in Africa, where we help SMEs generate demand, provide them data science insights and financing to stock the right levels of inventory, and take service fees for the sales, technology and financing,” she said.
“In five years, we are looking to have served more than 100,000 SMEs, have expanded our products and services to at least three other countries in Sub-Saharan Africa, and offered licensed services to third parties such as access to credit and opportunity profiles of SMEs.”
Highly ambitious plans, then, for which Kola requires funding. Seshie said access capital has been one of the startup’s biggest challenges, but investments from the likes of Madica, FirstCheck Africa and Fund7 have smoothed the process.
