By Ephraim Oseji
SMEs are often seen as the backbone of the economy as they account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
According to the World Bank, SMEs represent about 90% of businesses and more than 50% of employment worldwide.
Formal SMEs contribute up to 40% of national income (GDP) in emerging economies, with these numbers being significantly higher when informal SMEs are included. The World Bank estimates that 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world.
No matter the size of your business however, one thing is inescapable for the 21st century progressive entrepreneur – Tech. For businesses, technology has both tangible and intangible benefits that help business owners make money, produce the results customers demand and leverage limited capital in smarter, more effective ways.
In some cases, using technology provides greater efficiency and versatility, making it a natural progression for processes that may already exist in a business. Technological infrastructure affects the culture, efficiency and relationships of a business. It also affects the security of confidential information and drives competitive advantages.
With more and more people opening small businesses, it is important to take advantage of every tool available to help run that business smoothly. With often no time to spare, finding the right tech tools to help in running a smoother business operation is essential for saving time and money, but for the most part these tools exist independently.
There is an app for accepting payments which is often owned by banks, businesses make use of an app to create invoice, and a different app to manage stock. These multiple downloads, payments and usage of singular platforms for different business operations often brings about a feeling of SME Tech being costly and even too complex.
In response to the challenges faced by SMEs in Nigeria and a need for Tech to be adequately integrated into the ecosystem, ex-Mckinsey staff Dolapo Adejuyigbe and Mayowa Alli came together to found a startup that addresses the question of “What is the next tech solution for SMEs?” That answer comes in the form of Traction Apps – a payments company with payment solution offerings around POS, USSD and Bank Transfer.
It also serves as a one-stop-shop management tool to run businesses, whether online or offline. There has been a wave of innovation in the SME space around Payment, E-commerce, Lending, Supply chain and inventory management. This has driven SMEs to use multiple solutions without being able to aggregate data.
With Traction Apps, these solutions are aggregated on one app that allows for payment through POS, USSD, bank transfer and online payment. With Traction Apps, SMEs can manage inventory, create an online store for e-commerce, keep records of customers and record sales. This makes the life of business owners much easier and business operations smoother.
Beyond aggregating essential business operation tools on one platform, Traction Apps can also be seen as the next innovation for in-person payment as several tech platforms are currently pushing online payment. However, regarding offline/in-person payment, there still exists a gap to be filled. With card payments for example there is still a major time lag in getting POS Terminals, a high rate of declined transactions, a need for multiple terminals equating to opening of multiple bank accounts by merchants, delayed confirmation of bank transfer payments and fraud alerts.
Traction tries to fix these through same day settlement – by designing location-specific solutions for merchants to address connectivity linked payment issues, making available full details of payments, verification of each transaction and allowing for easy reconciliation.
Dolapo Adejuyigbe, one of the Co-founders of Traction had this to say about the Nigerian FinTech space and the solutions being provided by Traction; “We’ve seen innovation across P2P, open and digital banking, savings, agency banking startups thrives in recent times. However, from a B2B point of view and what I mean by B2B in this case is like SMEs focused fintech solutions, I think there’s still a gap. We’re a market that has over tens of millions of MSMEs and I would say about 5 millions are formal and semi formal SMEs. With Traction Apps, we are building the Square for Africa, where SMEs can engage directly with one partner to solve their financial and operational needs.”
Tech is now believed to be the new oil in Nigeria and SMEs represent the backbone of the economy. By building easy to use business tools, the role Traction plays in the jigsaw puzzle of empowering the economy of the nation is truly indispensable. More SMEs can now gain Traction as the storekeeper can easily manage inventory without doing a headcount, the roadside shawarma seller doesn’t have to lose customers due to POS network challenges and the carpenter is empowered to send invoices, positively reshaping the perception of his handiwork.