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Jumia marked its 6th year in business this year. During this period the e-commerce site has transformed retail. The company took advantage of technology, used an aggressive growth strategy and disrupted an entire industry. Jumia marketplace enabled small companies to sell their products across Africa while at the same time providing customers with a reliable online platform and payment on delivery. In doing so Jumia connected buyers and sellers quickly and efficiently.

The result has been that time-strapped consumers learned to enjoy the convenience of shopping at home rather than facing the swarms at the malls. Now a whole group of consumers has grown up knowing they can purchase whatever they want via their phones. Meanwhile, anchor stores such as Nakumatt, Uchumi and Sears are struggling, and the mall business in Kenya is in structural decline.

Jumia’s entry into small-business lending could transform the finance industry in the same way that the web-based retailer revolutionized retail. It started as an online seller of mobile phones and home appliances in 2012.

Just recently, Jumia announced that it has made small-business loans to more than 50,000 merchants in the Egypt, Nigeria and Kenya. during the past 12 months. Since Jumia Lending launched in 2017, it’s loan book has grown 12X month on month to small businesses. Further, more than 50 percent of the companies eventually take a second loan from Jumia.

Jumia Lending offers short-term business loans ranging from $1,000 to $20,000 for up to 12 months to micro, small and medium businesses selling on Jumia to help them grow their business. With access to more than 6 million active customer accounts in Kenya, Jumia provides small businesses the opportunity to quickly reach customers in their cities and in more than 14 different countries across the globe.

We created Jumia Lending to make it simple for small businesses to get business loans, because we know that an infusion of capital at the right moment can put a small business on the path to even greater success,” said Sam Chappatte, Managing Director for Jumia Kenya, in a company announcement. “Jumia is providing capital to small businesses to help them expand inventory and operations at a critical period of their growth. We understand that a small loan can go a long way.”

Traditional lenders shield away from small merchants after the interest rate cap law came to effect, which created an opening for other sources of financing, including marketplace lenders and other FinTech companies. Jumia has the advantage of being less-tightly regulated than banks and having near real-time data on sellers’ businesses and access to their customer reviews. Having this wealth of data reduces credit risk and is quite important in deciding whether to make a loan.

Banks do have reason to worry. Many of them, aided by name recognition, are burdened by the cost structure of the branch system. Today’s small-business owners are time-strapped and want the best deals fast. The internet economy enables them to accomplish those goals. Millennials are also interested in conducting transactions on their phone than walking into a branch of a big-name bank.

Further, many banks — even some of the largest ones, with resources to invest — have lagged in setting up online loan applications. I believe Jumia Lending is going to be a game changer for the entire small-business lending industry — not just for the banks but also for other online credit marketplaces. If banks do not change their way of doing business, the players in the industry could meet the same fate as traditional retailers that are simply unable to compete with the pricing structure, speed and customer service that Jumia provides.

Banks should also be concerned that Jumia won’t stop at small-business loans. The company could get into setting up deposit accounts and other types of loans. Furthermore, Jumia can do it without the regulatory compliance that banks must meet. If the banking industry remains complacent, Jumia has the potential to transform finance in the same way that it toppled retail.