By George Bakka, Founder | Patasente
There are low volumes of trade in Africa, but there is huge trading opportunity. Small and medium enterprises (SMEs) often fail to execute on orders they get because they lack funds to make Cash on Delivery payments, lack collateral, and lack credit histories. Consequently, 80% of the 8 million SMEs in East Africa fail to trade and close their doors...
We launched Patasente, an online supply chain platform, to facilitate trade between businesses in Africa. We enable them to undertake e-procurement, settle payments, and secure financing. Our platform enables businesses to sell their products and services to buyers worldwide, reduce transcation costs by adopting cashless digital payments, and unlock millions in working capital using our invoice factoring service. This package offers SMEs the ability to grow revenues, create jobs, and thrive in the marketplace.
One agribusiness that has benefited from our service is Masha Dairy Farmers cooperative. It was unable to meet its daily 3,000 litre supply order to Brookside Limited, a dairy products processing factory. This market failure had many causes: 1) supplier farmers were realizing low production volumes from their cows; 2) farmers were diverting their milk to private middlemen who would pay them cash on delivery; and, 3) farmer were mortgaging their future milk supplies to money lenders who could provide them high interest cash loans to meet their farm and livelihood expenses, such as silage, drugs, food, medical care or school fees. Consequently, Masha was faced with a deteriorating business relationship with its major buyer, falling revenues and often stolen or “lost money” as its manager trekked to the villages to make cash payments to farmer suppliers.
We signed Masha Dairy up on our platform, where they were able to send supply orders to all their farmers and allow them to request advance payments against those orders, paid by Patasente. Masha would then pay back Patasente for all the paid factored invoices. In the last 8 months, Masha has grown its revenue by 30%, created permanent jobs for three staff members, and provided a stable market to more than 100 dairy farmers.
Over the last 2 years, we have signed up 1,600 African and other businesses on our platform, and generated trading volume worth more than $ 3.7 million. What Africa has lacked is trade infrastructure, access to trade finance, and affordable payment systems. This is what we are changing with Patasente.
George Bakka is a 2016 Mandela Washington Fellow from Uganda and USADF youth entrepreneur. In 2016-17, USADF awarded him with $75,000 in seed capital to launch then expand Patasente. In October 2018, George presented on Patasente at Pyxera’s Global Forum Live! on how it is solving the problem of post-harvest loss.