Ugandan startup Musana Carts is creating an army of solar-powered entrepreneurs by providing street vendors with specially-designed cars aimed at helping them break into the formal economy.
Launched last year, Musana Carts aims to offer a path to a sustainable, reliable income through street vending.
Each Musana Cart comes complete with an eco-friendly stove, light bulbs and phone chargers, all powered by a solar panel. The startup also provides access to finance, business and WASH training, as well as a business licence.
There are currently 10 Musana Carts in Kampala, impacting the lives of around 30 vendors. They pay around US$14 each week to pay off their cart.
Manon Lavaud, strategic lead for Musana Carts, said low income, self-employed earners find it difficult to break into the formal economy due to, amongst other things, a lack of seed capital, poor existing business models and practices, and no clear route to legal licensing.
“Musana Carts addresses these issues, offering street vending carts on a rent-to-own scheme, offering key trainings on how to run a business, providing financial advice and help to enable people to earn a better living,” she said.
Each cart costs US$600 to make. The startup sells them for US$750, with the vendor owning it outright within one year. Vendors keep all sales revenue, and once they own the cart they pay a US$10 monthly franchise fee for further training, branding and support.
“Musana Carts is financially sustainable: we generate revenue from cart sales, branding space and franchise fees. Advertising is a large but saturated market. Since very few companies can afford billboard style branding, advertising space on a cart is a great solution for growing companies,” Lavaud said.
“Since we will be deployed across the city with access to a high volume of potential customers, our advertising space can reach many potential customers. We also have the opportunity for the company to distribute goods with us, and many branding options such as the cart itself, TV screens, vendor’s uniform.”
Musana Carts had also signed a deal with MTN, the largest telecommunications company in Africa, which will see mobile money agents placed at carts, creating a new source of income for vendors.
This goal – creating more income for vendors – is central to the startup’s vision. There are more than 167 million street food vendors in Sub-Saharan Africa, most of whom are trapped in the informal sector. They work illegally in businesses with low profitability, lack access to electricity, and cook on stoves with high carbon emissions.
“In urban areas in the region, unemployment is high; reaching nearly 70 per cent. Street vendors must continue their work in order to provide for themselves and their families, and although they work more than 12-hour days, many go home with less than US$5,” said Lavaud.
“In Kampala, the local enforcement authorities have evicted street vendors rather than trying to utilise their potential to contribute to the country’s growth. Previous initiatives have been stopped by the authorities.”
She said Musana Carts believes its model will be successful due to the packages it offers beside the cart thanks to its various partnerships.
“We have worked with local authorities to establish a co-solution to harness Kampala’s street vendors potential in addition to MTN, who has offered additional revenue streams opportunities such as insurance, education, and a financial asset company,” Lavaud said.
Others have been impressed too. Musana Carts was one of the five finalists of last year’s Hult Prize, and raised US$25,000 through a crowdfunding campaign early last year, on top of the US$25,000 it raised from friends and family. It is also currently closing grant funding worth US$100,000, and will shortly take part in the Unreasonable Institute Accelerator programme in Kampala.
Lavaud says her team is committed to developing its product further in order to further help street vendors and grow revenues.
“As entrepreneurs we tend to get caught up with our ideas and our passion. However, at Musana we pay attention to our stakeholders and work closely with our users,” she said.
“So we had to change and pivot several times, and we are still figuring out what is the best combination of product and services for vendors to be empowered.”
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