Kenya’s Kadogo Economy

By | May 26, 2011

Charcoal seller Margaret Nyambura, a widowed mother of four, used Sh100 we had given her to shop for food and household goods that would last her family three days.

Her priority was cooking oil and maize flour, which cost her Sh20 and Sh10 respectively. Each was measured in portions to fit her money. She bought twenty spoons of sugar worth Sh15, although in lean times she can get a small ration for Sh5. She bought tea leaves worth 15 and Rice worth the same amount, then left the rest for sukumawiki (kales), tomatoes and onions.

Everything is sold according to the amount of money one has. Things that go for one shilling include one slice of bread, five match sticks, a spoon of tea leaves and sugar, half a spoon of cooking oil, a quarter candle stick and a slice of bar of soap. Indeed, one bakery based in Industrial area now supplies half and quarter loaves of bread to Mukuru slums. ~ Every coin counts in slum ‘kadogo’ economy, The Standard, Feb 2010

When I read this detailed description of Mrs Nyambura’s shopping behaviour, I was immediately reminded of the way customers would shop in Ma Fe’s little sari sari shop in the Filipino village, right down to the ‘finger’ of sugar they would buy for 2 pesos. Intrigued by the similarity, I dug up a little more about the so called Kadogo Economy of Kenya and here’s a 3 minute video from the news as well as a few more articles from last year.

Whats interesting is that The Philippines is the other country well known for having pioneered a successful mobile money platform in GCash although their airtime tends to expire at the smallest loads within 24 hours.

The next question then is, what would be the buyer behaviour and decision making amongst this demographic when it came to purchases on the mobile platform or made via the phone? And thus, how does it map on to the insights derived from the original rural research on the prepaid economy that could influence the design of more relevant business models and payment plans meant for this mass majority market?

Something that I would like to follow up on while I’m in Nairobi next month. Watch this space.

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