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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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