Empowering Small Giants: Inclusive Embedded Finance for Micro-Retailers

Known by many different names around the world, including duka, kirana, warung and sari-sari, neighborhood convenience stores or micro retail shops are central to the economic fabric in emerging markets and developing economies (EMDEs). By providing incomes to millions of low-income families, and essential goods and services in neighborhoods across the globe, these shops are crucial for the communities they serve. Despite the proliferation of supermarkets in EMDEs (Monzon 2022), the relevance of these smaller retail stores has only grown. Across nearly all emerging markets, they remain the primary channel for fast-moving consumers good (FMCG) sales (Iver et al. 2022). Unfortunately, despite their importance, these micro-retailers face a variety of economic challenges, with one of the most acute being limited access to finance, especially working capital.

Financial inclusion is becoming more feasible for many excluded and underserved micro-retailers, thanks to the emergence of new B2B e-commerce companies that are digitizing the final stage of the fast-moving consumer goods (FMCG) supply chain. This report outlines various business models that incorporate last-mile retailers into digital ordering platforms, offering them convenience, transparency, and a wide range of products.