African startups slowly realize value of informal economies
Almost half of Sub-Saharan Africa’s GDP comes from the informal sector, which also accounts for more than 70 per cent of employment on the continent.
Yet Africa’s growing tech startup scene has yet to fully take advantage of the opportunities in this space, though there are signs of growing awareness of what can be achieved.
Last week, Johannesburg-based business support organisation The Awethu Project rolled out an app aimed at informal markets, aimed at assisting informal entrepreneurs in starting and growing businesses.
South African companies, indeed, have done more than most to tap into the space. Amongst them is Nomanini, which provides PoS and enterprise management software to informal merchants. The company’s chief executive officer (CEO) Vahid Monadjem says as one of the largest and least well-served parts of African economies there are numerous opportunities for companies offering solutions to informal markets.
“The two areas that I see the most immediate opportunities are in financial services and logistics. Within financial services, payments is still a massive opportunity, and increasingly there are new opportunities becoming possible as payments rails go deeper such as micro-insurance, savings, on-demand products…” he said.