The digital medicine for pharmacies: How AI is powering Kenya’s chemists
NAIROBI – A steady stream of customers descends the two steps into Ryche Pharmacy, just off a bustling street in Nairobi. Between helping them, Dr. Bramwel Othieno stays busy, putting new inventory on shelves and doing administrative work on the pharmacy’s desktop computer.
His job is smoother, and the pharmacy is more efficient, since starting to use an AI-powered app called Zendawa – a word that combines “zen” and “dawa,” or the Swahili word for medicine. Zendawa not only manages the pharmacy’s inventory, but it also alerts Dr. Othieno and his colleagues to medicines whose expiration dates are approaching.
“Before Zendawa, we were losing around 6,000 Kenyan shillings [about US$45] per month on expired medications,” Dr. Othieno says. “Since onboarding Zendawa, we have been able to track the short expiries and been able to move them out before they expired, so we have managed to save at least 4,000 shillings.”
Having already cut waste by two-thirds, the pharmacy aims to reduce losses from expired drugs all the way to zero, he says.
Such savings are important because neighborhood pharmacies in Kenya like Ryche operate on razor-thin margins, says Wilfred Chege, co-founder and CEO of Zendawa. Kenya has several pharmacy retail chains, especially in wealthier areas, but most pharmacies are tiny storefronts owned and operated by individual pharmacists, serving residents and workers within a short walking radius.
Recognizing the pressures small pharmacies face, Zendawa – in partnership with Microsoft – began looking at how technology could support pharmacists on the ground. The Zendawa app, powered by Microsoft Copilot 365 and using tools in Power BI, is helping many of these small pharmacies serve more clients while increasing narrow profit margins.
On a continent with too few doctors and nurses, pharmacists provide crucial primary care, but they, too, are in short supply – Kenya has only two pharmacists per thousand people, compared with 111 per thousand in the U.S., according to the World Health Organization’s Global Health Observatory database. A 200-square-foot pharmacy currently needs three to four pharmacists to operate, so getting the most benefit from each pharmacist is crucial to meeting patients’ needs. They must use their limited shelf space as efficiently as possible.
Mostly operating as small businesses, pharmacies struggle to get working capital to finance new inventory. Most operate offline and lack tools for managing their business. Last-mile delivery to patients is another pain point, Chege says.
Zendawa was born during the Covid-19 pandemic, when restrictive curfews limited hours at pharmacies, and people had difficulty getting medicines. A friend of Chege’s, Dr. Victor Achoka, asked him to find a tech solution to this problem. Chege had created another startup while in high school, called Shule Mall, to let families order supplies for their children at distant boarding schools and get them delivered. Shule is Swahili for school. However, when the pandemic closed schools, Shule Mall’s business dried up.
So, with Dr. Achoka, Chege pivoted to figuring out a way to solve the last-mile problem of drug delivery during the pandemic. “We saw that we can do this for all other pharmacies, not just the ones he was operating,” Chege says. Since starting operations in 2023, Zendawa has onboarded 820 pharmacies, mostly in the capital of Nairobi and in Nakuru, hometown to Chege and Dr. Achoka.
Speeding up business intelligence for pharmacies
The delivery solution uses machine learning to match orders sent to Zendawa with the nearest pharmacy that has the right products. Then it connects the order to one of Kenya’s many motorcycle delivery drivers. Zendawa’s mission quickly grew beyond deliveries to addressing other common problems of neighborhood pharmacies, namely in back-office operations. Real-time reporting on inventory, a function of the Zendawa tool, is the big boost for pharmacies. Especially in cases where pharmacies weren’t digitized, they would have had to close for a full day on a regular basis just to take stock manually, Chege says.
Thanks to Zendawa, Ryche Pharmacy only closes for a half day to take inventory. “Initially, we spent a whole day on stock taking, which was overwhelming,” the pharmacy’s Dr. Othieno says.
Pharmacist Dr. Bramwel Othieno checks stocks at Ryche Pharmacy in Nairobi. Zendawa’s platform helps pharmacies manage inventory and other back-office tasks. Photo by Afrikanna Production.
Meanwhile, being online through Zendawa has increased Ryche’s client base, resulting in a jump in minimum daily sales to 20,000 Kenyan shillings (about $154) from 12,000 Kenyan shillings, he says.
Zendawa’s AI tool, which incorporates Microsoft 365 Copilot throughout, not only aims to speed up this business intelligence for pharmacies, but it also helps forecast their needs, to give them a longer time frame to help them predict and prepare for customer flow. Pharmacies can monitor their different business gauges on Zendawa’s unified dashboard.
For example, if a pharmacy is out of one kind of a drug, the pharmacist might suggest another that serves the same purpose. “That is not a best practice,” Chege says. Yet “stocking five variations of the same drug from different manufacturers is very capital intensive.” Zendawa aggregates market data and uses Microsoft’s Power BI business intelligence tool with AI to detect trends in which, say, malaria drug is being prescribed more, so pharmacists order accordingly in advance.
Further leveraging Microsoft’s Power BI, Zendawa creates a credit score for the pharmacy. “It’s our own scoring system and so far, we’ve not had any mismatch,” Chege says. “Normally, if they need drugs, the payment is on delivery or if they need an inventory financing, that is now where the credit embedded financing comes in.”
The credit score created by Zendawa, based on cash flow and several other factors, allows pharmacies to apply for financing from some licensed credit providers that focus on small and medium-sized businesses.
From pen and paper to AI
In adopting Zendawa, some pharmacies make a huge leap, going from pen and paper to AI. Zendawa’s team starts by digitizing the point of sale, which leads to streamlining operations, revealing inefficiencies and waste and giving the pharmacies insight into their cash flow. This leads to the possibility of offering online sales, as well as the accumulation of data that can go into a credit score so they can apply for financing.
“Credit scoring is something that is very new because we are championing for a new way of accessing, capital, which is a data-to-credit model,” Chege says. “This is very different from the traditional, collateral model that is used by banks and other major financers.”
One reason is that data tracked on paper was inaccessible – if it was tracked at all. And in the absence of data, financial institutions had to come up with another way to account for lending risk, namely by requiring collateral, which resulted in many small businesses being excluded from credit.
“Zendawa is really championing for easing inefficiencies as well as administrative burdens within the pharmacy ecosystem,” Chege says. “There is huge potential for every pharmacist to be a business owner, because we will give them the tools to be able to serve a very wide market without breaking the bank.”
Wilfred Chege is the CEO and co-founder of Zendawa, based in Nakuru. Photo by Afrikanna Production.
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Catherine Bolgar writes about AI and innovation at Microsoft, from advances in quantum computing to how AI is helping ordinary people. Previously, Catherine wrote about technology and business for a number of publications, and she was an editor at the Wall Street Journal in New York and Brussels. She taught high school math in Kenya, where she learned Swahili. She currently lives in France. You can contact Catherine on LinkedIn.
