Ethiopian merchants will be able to access working capital loans based on their digital transaction history under a new payment and financing initiative launched by Visa and ETTA Solutions.

The initiative was announced alongside the rollout of a new digital payment acceptance device that the companies plan to distribute to around 148,000 merchants across Ethiopia.

The device, known as Zuria is designed to bring digital payment services beyond large retailers to smaller businesses, including local shops, market vendors, restaurants, pharmacies and other small and medium sized enterprises.

Through a single terminal, merchants will be able to accept contactless Visa card payments as well as mobile money and account to account payments using QR codes. The device will also support the issuance of electronic receipts.

Dr. Temesgen Gebrehiwot, founder and CEO of ETA Solutions, said more than Birr 120 billion were processed through the payment platform during its pilot phase last year.

Beyond expanding digital payment acceptance, the initiative is expected to use merchants’ transaction records to help address one of the major challenges facing small businesses: access to formal credit.

Through ETTA Solutions’ partnership with international financial technology company Optasia and participating banks, merchants that establish sufficient transaction histories and meet creditworthiness requirements will be able to access working capital financing.

The arrangement could allow businesses that may lack conventional collateral or extensive banking histories to demonstrate their financial activity through verified digital sales records.
The program is expected to begin in Addis Ababa before expanding to other parts of Ethiopia in the coming months.

Source: Sheger FM 102.1