Together with the Kgautswane Community Development Centre in Limpopo, the German Red Cross and Volunta, SAP Africa today announced the establishment of a community-based business network partnership named the Kgautswane Virtual Buying Cooperative (KVBC).
Kgautswane, a rural community in the Limpopo Valley, South Africa, is home to about 100 000 citizens spread across 19 villages. The socio-economic development of this area is disadvantaged due to its remote location and lack of appropriate infrastructure. The lifestyle of the community is largely traditional and farming-based. Government subsidies, the keeping of livestock and informal employment rank as the most common form of economic activity. The community relies entirely upon local spaza shops and kiosks with access to limited goods for all basic commodities, and this puts the entire community at a socio-economic disadvantage.
Together, the partners identified Kgautswane as a potential innovation location for bridging the geographical gap between supplier and end-user of goods through technology. The successful outcome is the end result of a project which began in 2006.
Through the technical development expertise delivered by SAP Africa, the community is now able to place orders for products with multiple suppliers elsewhere, account for stock, effect mobile invoicing and much more all on a simple App. The App features include:
1. Registration of shops on a geo-interface
2. Catalogue of local stocks and suppliers stock
3. Sales and stock levels records
4. Deliveries management
5. Real time analysis of transactions
6. Financial Accounting Features for the Cooperative
“The project has paved way for a completely new business model for the supply of basic goods in underserviced rural communities,” said Clara Basentjeng Masinga, Director Kgautswane Community Development Center. “A stable, formal business relationship with retailers was previously nearly impossible for small shops, considering practicalities like a lack of a physical address, bank account or a business track record. The new system helps to overcome exactly these critical issues. The mobile technology now used by our buying cooperative has also solved the problem of long-lead times for orders, and now we have a better pricing and understanding of buying power for better stock control. Furthermore, this has outreaching consequences as small business operators now share information and network – something that was never practiced before.”
In addition to the research involved, financial and non-financial support and provision of food, SAP Africa also provided community members with mobile devices with custom-built SAP software prototypes for operating small businesses as part of the project. During the period of January 2013 – August 2014, the turnover of the buying cooperative was recorded as R490 000; a significant development. Today, local crèches including 36 shops are ordering their stock using the mobile app technology.
“When city dwellers think of technology, most think of the internet, cell phones, or the latest laptop,” said Mehmood Khan, COO SAP Africa ”For rural dwellers, technology can mean the difference in a far more basic manner. Effectively leveraged, technology can become a major driving force behind socio-economic change. The Kgautswane Virtual Buying Cooperative is an example of how smart technology is able to effectively and sustainably transform people’s lives.”
SAP Africa is currently in discussions with potential other partners to investigate how to further increase the impact of the community-based business network partnership and usage of the technology prototype amongst other communities across Africa.