IMPACT= Using technical assistance to help businesses on a more inclusive path
At BII, we believe impact and profitability can go hand in hand. Development finance often involves finding a business with a positive impact and helping it grow, but occasionally we are able to both broaden and deepen impact by helping companies rethink how they operate.
The impact payoff of new business models can be huge, but change can also be risky and technically challenging. This is why BII Plus – our technical assistance facility – works with companies in our portfolio to identify these opportunities and help make them happen. Here we present two examples of where BII Plus has helped businesses introduce more inclusive business models.
Inclusive distribution in practice: Amalgamated Brands in Zimbabwe
Amalgamated Brands, a consumer goods company in Zimbabwe, wanted to reach new customers in areas where retail was scarce. The solution? Mobile carts operated by local women entrepreneurs.
With support from BII Plus, Amalgamated Brands piloted a model that kept costs low and gave women ownership of the initiative. To make the model financially viable, it avoided dependence on technological interventions. Products were stocked in refurbished shipping containers, and carts were lightweight so they’re easy to move through crowded neighbourhoods. The on-ground presence of an advisor also ensured that Amalgamated Brands was well supported to manage logistics, troubleshooting, and identifying improvements to the model.
A key element in the project wasn’t just the carts, it was the people who ran them. Amalgamated Brands partnered with women who were already active with established networks within micro markets, giving them training and an opportunity to grow their income. Before joining Amalgamated Brands, most earned $60-140 a month selling ready-to-eat food. Now, they earn $100-200 a month, often doubling what they made before.
For Amalgamated Brands the model works commercially too. 100 women-operated carts are already active, each generating up to $1,000 in monthly revenue. The company plans to scale up to 1,200 carts across Zimbabwe in the next year, adding $5-10 million in revenue.
“We didn’t just want to sell more products,” said CEO Fungai Murahwa. “We wanted something that gave women ownership, and is financially viable at the same time. With technical assistance from BII Plus we showed that this is possible.”
New routes to boosting business for small retailers: AQ Direct, Uganda
As the second largest employer in Uganda, retail trade is a critical source of livelihoods. Yet it can also be challenging to make a stable living. During the pandemic, 85% of retailers had to temporarily close their doors, and even when able to open had to rely on intermediaries to supply inventory at inflated costs (+20-30%), eating into profits and harming consumers.
African Queen (AQ), Uganda’s largest fast-moving consumer goods distribution company, recognised an opportunity to respond to the challenge. It set up a new distribution model, AQ Direct, to give small retailers direct access to fast-moving essentials such as school supplies, hygiene products, and personal care goods, through a Tuk-Tuk fleet.
The concept was promising but the operating model was untested. BII Plus provided technical assistance to help shape the model. Together we identified the purchasing pain points of small retailers: reliable stock, transparent pricing, and predictable delivery. The business was launched in March 2021 and quickly gained traction, proving the market need for better access for smaller retailers. However, profitability was elusive.
That’s why, in 2022, we supported AQ Direct management with a detailed analysis of the unit economics of different models. This led to a rethink of AQ Direct’s distribution system that still drives how the business is run today.
A major shift was introducing a pre-sales system. AQ Direct hired a fleet of agents on motorbikes – who could move through Kampala’s heavy traffic more quickly than Tuk-Tuks – to take orders while Tuk-Tuks focused on fulfilling them. The Tuk-Tuks were also redesigned to load and unload more quickly, and routes were restructured to prioritise more profitable areas. AQ Direct updated sales agents’ incentive scheme to align with what matters for the business. Lastly, AQ Direct encouraged retailers to switch to mobile money payments, reducing cash-handling risks; today, over 70% of clients pay digitally, up from less than 7% three years ago.
The results have been transformational. Since launching in 2021, African Queen has expanded from serving a few hundred clients to more than 10,000 outlets across 80% of Uganda, half of which are reached via AQ Direct. The venture has created jobs, particularly for delivery drivers in rural areas with few alternatives, and has improved access to essential goods for low-income households.
AQ Direct is now a profitable business unit, with a 52% compound annual growth rate since 2021. In the words of AQ Direct’s management team, “without BII, we wouldn’t have done it”. With a stable model now in place, AQ Direct is exploring a simple working-capital platform to help micro-retailers grow.
