NYSE-listed Africa-based marketplace Jumia has extended the services of its proprietary payment technology JumiaPay to include loan offerings to vendors on its site.
JumiaPay, alongside credit cards and cash on delivery, is one of the payment options available on the pan-African marketplace.
According to Jumia co-CEO Sacha Poignonnec, driving JumiaPay’s adoption is crucial to the marketplace’s growth and ultimately the company’s profitability. Four years in a row, the NYSE-listed company has recorded operating losses. Last financial year, it posted a €66.7 million loss.
Rolling out the loan services to small and medium-sized merchants on its platform spread across Nigeria, Egypt, Kenya, Morocco, Ghana and Ivory Coast creates opportunity to grow revenues in markets where a lack of credit stands as one of the critical causes of business closure. Jumia Group’s site states that there are 81,000 active sellers across the six markets.
Available credit in many African markets go as high as double digits per month, making the facilities costly and unattractive. However, key markets such as Kenya and Nigeria have in the last one to two years begun experiencing an explosion of single-digit loan offering apps. Consequently, JumiaPay’s interest rates would be a major decider in the patronage of the new offering in its major markets. AIM Group tried to reach out to Jumia for comments on its interest rates but had received no response.
Vendors on the site would not automatically get loans as their application and credit-worthiness would be assessed. Jumia has already begun hunting for credit officers to join its Jumia Lending team in Kenya to facilitate the lending process to its thousands of vendors.
“Our loan officer will assist in the development of Jumia Lending by presenting our solution to our sellers. He/she will be helping our sellers to apply for a loan, and with the help of the loan officer, we will review the data collected and the applications,” the company explained in its job opening brief.
In another move to grow revenues, the Kenya-based unit of the company has started a relationship with 50 top brands including Nokia, ASUS, Hisense, etc, to launch Jumia Mall – a curated category on the site which allows customers easily identify official distributors of leading brands in the market. This strategy is in response to the number of fake products entering the market.
Associating with trusted distributors builds Jumia’s brand and improves user experience for buyers, ultimately attracting new users to the site.
“The new Jumia Mall channel is a great milestone in Jumia’s transformation into a brand-focused platform, guaranteeing top service and quality. We at Nokia are excited to pioneer these changes together with Jumia teams across Africa,” East Africa Senior Business Manager, HMD (Nokia) Gopher Ogembo, stated at the launch.
Now, users who log onto Jumia (or download the app), will have a choice between buying from Jumia Mall (official brands), Jumia Global (international vendors) or a large number of quality vetted local resellers (the marketplace).
Customers who shop on Jumia Mall will also be guaranteed 100% authenticity, official warranties from the brands, and a 15-day return policy.