Its early morning in Harare, and a truck delivering bread makes a screeching halt at Tindo Tuckshop in Mabvuku and the driver goes to the back of the truck, takes 4 crates of bread and hands them to the Tindo Tuckshop owner. The driver quickly signs a delivery note for Tindo and is back on the driving seat heading to the next tuckshop.
In exactly 2 hours or less, the delivery truck returns and collects cash for the bread sold. Now this would qualify as one of the shortest credit facilities in the world! The shortest term credit was popularized by bread companies and currently Bakers Inn is the leading brand.
Tuckshop owners do not have upfront cash flows for ordering most products, but most of them are capable of consistently moving volumes—and this is where credit providers came in to plug the hole.
It started with bread but now more products are being pushed this way and they include mealie meal, sweets and candy, snacks and others. Some deliver the products and collect their cash in the shortest period of time ranging from a few days to a week.
You have possibly witnessed a lot of vendors at traffic lights especially in Harare who will be selling various goods from brooms, sweets, snacks and biscuits. Where do they get the products? Do they pay for them? An underground distribution channel now exists with registered vendors accessing products—sell and cash the proceeds to the supplier.
On the ground opposite Rainbow Towers in Harare—a motorbike truck delivers ice-blocks to vendor cart owners. Sometimes the delivery bike comes earlier than the vendors and then just leave the ice under trees and collect funds later.
Thinking of launching new products in Zimbabwe? You may need to analyse how this credit model is being used for inspiration. Interestingly we once employed this model when we launched a Crowdfunding Company that delivered mealie meal to high density suburbs in Harare.
The trick is not to leave your cash in the hands of tuckshop owners for too long as the propensity to spend it is very high thereby increasing the risks of default.
