Latest entries

MSMEs Are the Backbone of Developing Economies: New Research Shows How Digital Platforms Can Boost Their Impact



The world’s working-age population is growing – and nowhere more rapidly than in sub-Saharan Africa. To keep pace with this growing population, 600 million new jobs must be created globally over the next 15 years. That’s a tall order, but micro, small and medium-sized enterprises (MSMEs) are making this goal achievable. MSMEs are the backbone of most economies worldwide, and they play a key role in developing countries, according to the United Nations.

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How financial exclusion and lack of trust hamper e-commerce platform models



Faced with a customer base that lacks bank accounts or who do not trust online payments, many e-commerce platforms have developed tools and processes that allow customers to pay in cash for most transactions. In this note, I argue that while this strategy is fueling growth in transaction volumes and active customers, issues with fraud, failed deliveries and late/uncollected receivables stemming from the use of cash are opening platforms up to substantial losses. Additionally, e-commerce platforms have not been as proactive as they could be in launching strategies to onboard and pay financially excluded merchants and workers. This misstep is probably limiting the number of merchants that would be selling on e-commerce platforms if mobile money or easier conversions to cash were implemented.

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Three business model changes to make African platforms work better for financially excluded workers and merchants



As we explored platform business models, we found examples of practices that we hypothesize could impede the participation of the financially excluded. We discuss considerations for improving several business practices that could be problematic for financial inclusion, and we highlight three problems and offer suggestions for organizations to consider or areas for researchers to explore more deeply

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Why African platforms are adding financial services to their business models



Why would a tractor company need to be in the insurance business? Why would a ride-hailing company start offering credit? It’s actually an old story. From store credit cards in the US and carnês de loja in Brazil, to Ally Financial—the bank started by General Motors—the line between financial services and consumer goods and services has always been blurry. We’re seeing this again: in the recent wave of platformization, platforms are getting into the finance game to support their core business.

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