NAIROBI, June 13 (Reuters) - Kenya’s biggest privately owned bank, CBA, has teamed up with a local financial technology company to speed up payments for goods or services delivered by suppliers, its chief executive said on Wednesday.
The new service will be hosted on an online platform run by fintech Ennovative Capital, a Kenyan firm which licences the software from U.S. developer PrimeRevenue.
Late payments for goods and services is a common problem for small Kenyan businesses. Retailers take an average of five to seven months to pay suppliers, the ministry of trade found in a 2017 study.
“We are offering supply-chain financing through our online web-based platform,” said Jeremy Ngunze, CBA Kenya’s chief executive, at the launch of the service.
Firms that contract small suppliers will get instant access to cash equivalent to the orders, allowing them to pay their suppliers faster, he said.
The service will be offered through an open platform, giving participating buyers and suppliers access to liquidity, he said.
CBA has reaped huge rewards from pioneering mobile phone-based lending in Kenya after teaming up with telecoms operator Safaricom in 2012 to launch the dominant service, M-Shwari.
The new service for firms is also seeking to harness technology since it is web-based.
“It cuts a lot of administrative challenges and paper work,” said Kefa Nyakundi, the managing director of Ennovative.
The facility is backed by African Guarantee Fund, an initiative of the African Development Bank aimed at spurring financing for small and medium enterprises on the continent. (Reporting by Carlos Mureithi Editing by Duncan Miriri and Jon Boyle)