We live in an age where access to information is at its highest level. With the onslaught of digital technology, the internet has become a vital source of unlimited information. This has been hastened by the increased availability of smartphones, which have made it possible for people to get onto the internet from wherever they are through these mobile devices. This technological advancement has transformed the lives of many people by making it easier for people to access various services from the comfort of their palm.
The effects of this advancement in technology has changed the way business is conducted by the introduction of new and innovative ways of reaching out to clientele. Micro-businesses have embraced the use of mobile payment technology in their operations. They view this mode of conducting business as an easier form of cash delivery to their suppliers and business partners and accessing loans as it is a system which is relatively affordable, personal and can be used anywhere and at any time. These factors have fast tracked its growth.
A study conducted by Internet World Stats indicates that Africa accounts for 16.6% of the global population and has an internet penetration rate of 26.9%. In comparison, the penetration rate in Latin America and the Caribbean is 59.4%, 56.5% in the Middle East, 76.7% in Europe and 88.1% in North America. On the African continent, Nigeria leads with an internet penetration rate of 47.9%, which is 27.4% of the continent’s total internet usage. Kenya is ranked third with a penetration rate of 66%, contributing to 9.5% of internet usage. Population size was a major variable that was considered when conducting the study.
The penetration rate on the continent presents an opportunity that can be exploited as a means for businesses to reach a wider audience. The Kenya National Bureau of Statistics latest survey of Micro Small and Medium Enterprises indicates that 43.1% of MSMEs do not use Information and Communication Technology (ICT) because they don’t think that it is vital to their operations. 14.3% thought that it was too costly while 4.5% cited a lack of access to electricity as the reason. There is a need to educate MSMEs on the importance of ICT as a means to growing their businesses.
The survey also looked at the type of ICT equipment available in licensed businesses. 40.7% of the MSMEs had a mobile phone, 15.0% had a radio while 10.5% of the respondents reported not having any ICT gadget. Availability of the fax machine, tablet, digital / video cameras was reported by less than 5% of the respondents. This is a clear indication of the importance of mobile phones as a gateway to interacting with small businesses. A lot more can be done to facilitate business transactions in the informal economy considering that only 49.3% of the businesses surveyed use mobile money platforms. It is a platform that is yet to be fully exploited as it is often underrated as an avenue to develop business capacity.
Informal Economy Analyst