Limited access to information constrains informal enterprise growth in many developing countries. Small businesses waste much time on accessing information in small doses from multiple sources. How could information and communication technologies (ICTs) be used to assist small and medium enterprises (SMEs) to access vital business information?

A project coordinated by the Intermediate Technology Development Group (ITDG) highlights the potential of modern ICTs to improve poor people’s access to business information. Researchers in Bangladesh and Kenya designed a methodology to understand and improve the existing information systems of SMEs. Together with local participants they developed online textual and multimedia information with a wealth of practical sector-specific advice for small businesses.

The project identified two broad categories of information needed by SMEs: generic business information (for example, advice on tax and service utilities) and sector specific specialised information (for example, sewing machine suppliers for dress makers).

In Kenya the project focused on five enterprise sectors – dress makers, hairdressers, metal workers, soapstone carvers and woodworkers – in two provincial towns. Information gathered by participatory research led to a comprehensive listing of appropriate information products on a dedicated website.

Although commercial internet cafes are increasingly found in the towns and cities of Kenya the project recognised that internet access is still difficult for many micro entrepreneurs. ITDG thus encouraged ‘infomediaries’ to print off pages of interest to sell to small enterprises for a small charge. Information is not only conveyed in written English but also in Kenya’s main local language, Kiswahili. Audio files for illiterate entrepreneurs can be downloaded and copied to cassette for those unable to read.

In Bangladesh there is no such widespread coverage by private email/internet businesses. There are however a number of thriving national and local NGOs with a wide membership in rural areas. By partnering with them, ITDG set up telecentres in peri-urban areas which provide email, internet and computer centre services and assist not only enterprises but also local NGOs, rural populations and government institutions.

In both countries the research confirmed the existence of unsatisfied demand by informal enterprise operators for business information. Researchers found that:

• SMEs are acutely aware that they are being exploited by people with access to information: most complaints centre on lack of information about what the final customer pays for their product, the correct price for a material they need and how to source a necessary input.
• No individuals or companies specialised in providing information targeted to informal enterprises.
• There was no situation where informal enterprises accessed information from sources dedicated to providing information as a stand-alone product: information sources for informal enterprises currently supply some other additional service or product.
• SMEs rate community based organisations and trade associations as the worst information deliverers.
• While civil servants are an important source of information much of it is inaccurate and provided too late to be useful.

Internet, fax and telephone facilities are increasingly available in towns in developing countries. These modern forms of communication are rarely used by small enterprises as business tools, yet they have the potential to significantly improve poor people’s access to business information. There is evidence that SMEs are willing to pay significant sums for relevant information where available.

Source(s):
‘ICTs and growth of peri-urban informal sectors enterprises’ by Rob Aley, Furious Chitongo, Louis Othieno, Mary Obara, Clare O’Farrell, Hafiz Rahman, Abdur Rob and Oliver Wakelin, Intermediate Technology Consultants, Intermediate Technology Development Group, 2002 Full document.

Funded by: DFID (IUDD R7811)

id21 Research Highlight: 5 May 2004

Further Information:
Oliver Wakelin
Intermediate Technology Consultants
Intermediate Technology Development Group
The Schumacher Centre for Technology & Development
Bourton Hall
Bourton-on-Dunsmore
Rugby
CV23 9QZ
UK

Tel: 44(0)1926 634 494
Fax: 44(0)1926 634405
Contact the contributor: oliverw@itdg.org.uk

Contact the contributor: itc@itdg.org.uk

Intermediate Technology Consultants, (ITDG), UK

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