Payment Terms

Swift settlement gives Jumia an edge over e-commerce in Uganda – PML Daily


Timothy Mugume, country manager of Jumia Food Uganda (PHOTO / Courtesy)

KAMPALA – While most Ugandan businesses are used to physical cash payments, there is a gradual shift to e-commerce that has forced them to switch to digital payment channels, which in most cases are carried out by payment providers. services that do not settle payments immediately.

Since the majority of Ugandan businesses are micro or small businesses, operating with little capital, failure to settle their payments on time puts them in cash flow constraints that could lead to collapse.

Jumia, one of the largest platforms in Africa with integrated logistics and digital payment services, seems to have understood this principle very well and taken advantage of the market as Uganda’s preferred e-commerce platform.

According to Timothy Mugume, country manager of Jumia Food Uganda, the company ensures that suppliers are paid on time according to agreed deadlines, which is a key good practice in financial inclusion.

“It’s important that we follow best practices because most of these companies don’t have a lot of capital and we realize that; this is why we have flexible payment terms depending on the agreements signed ”, explains Mugume.

He urges all market participants to adhere to the same-day settlement principle, as the ecosystem relies heavily on cash flow.

“This is a cash flow business and we also have to play our part; we make it easy for customers to pay through our various payment channels; we should also settle with our suppliers timely.

Even during the lockdown, Jumia has remained relevant in the market by allowing customers to have access to all the goods they want even when locked in their homes.

The e-commerce platform offers a range of services from food delivery to groceries, electronics and home appliances and pharmaceuticals to customers at affordable rates.

“From the start of the first lockdown in 2020, we put our partners – suppliers and customers – at the forefront because the continuity of their activities was essential for us. Unfortunately, some businesses have since closed, ”says Mugume.

Jumia, according to Mugume, is particularly passionate about supporting businesses run by women. In partnership with organizations such as the Kampala Capital City Authority and UNDP, the company has trained women entrepreneurs in various skills, including digital and business management, and launched initiatives that allow them to compete effectively.

40 days 40 FinTechs

Jumia is one of the companies participating in the ongoing second edition of the 40-Days 40-FinTechs initiative, organized by HiPipo in partnership with Crosslake Technologies, ModusBox and Mojaloop Foundation, and sponsored by the Gates Foundation.

Mugume praised HiPipo for this initiative, saying it has helped highlight technological innovations in the country and also created a platform to showcase key innovations in Uganda and across the continent.

“FinTech and innovation are what we need to pull Uganda out of the challenges of slow economic growth. A platform like this provided by HiPipo highlighting the different ideas not only serves as a beacon to bring hope to the economy, but also highlights this information and shares it with interested parties, this which is good for the ecosystem, ”Mugume said.

HiPipo CEO Innocent Kawooya notes that FinTech in Africa offers exciting opportunities, adding that investors are rightly interested in various startups offering a plethora of services, ranging from payments and loans, to remittances and cross-border transfers, among others.

“Each of these services solves unique sets of challenges. For example; with cross-border payments comes the opportunity to erase outrageous rates and bureaucratic bottlenecks that hinder transactions and therefore trade between African countries, ”Kawooya said.

He adds that the 40-Days 40-FinTechs initiative aims to boost the African FinTech ecosystem to enable innovators to benefit from sustainable profitability to help them design and deploy affordable and inclusive financial services for the poor.

Jumia also implements other financial inclusion best practices in transparency and Know-Your-Customer (KYC), among others.

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