By Kwaku OFORI
As an advisor and expert in small business development, I have seen first-hand the transformative power that technology holds for entrepreneurs and small businesses. Throughout my career, I have studied various regions, including West Africa and South Asia, and one country that consistently stands out for its effective use of technology to boost small business growth is India.
My time at the National Institute of Rural Development in Hyderabad, India, where I trained in Rural Credit for Poverty Reduction, provided valuable insights into how technology has shaped the Indian small business ecosystem. It was clear to me that Africa, particularly Ghana, could benefit significantly by adopting similar strategies to develop its own small business sector.
Lessons from India: how technology powers small business growth
India has long recognized the importance of small businesses in driving economic development. Technology has been the key enabler in unlocking the potential of these enterprises by fostering financial inclusion, improving market access, and enhancing operational efficiency. While in India, I witnessed the ubiquitous role technology plays in the business ecosystem—from rural micro-enterprises to larger SMEs—and how it addresses critical challenges that small businesses often face.
One major example is India’s adoption of digital payments and mobile banking. The Unified Payments Interface (UPI), which integrates various banks and financial institutions, has revolutionized the payment system in India. It has empowered even the smallest street vendors in rural areas to accept payments via mobile phones, reducing dependency on cash transactions and expanding their customer base beyond local communities. This shift to cashless payments not only improves financial transparency but also gives small businesses access to formal credit through traceable financial histories.
Another powerful tool is the rise of e-commerce platforms like Flipkart and Amazon India, which allow small businesses to sell their products to a national—and even international—audience. Through the use of technology, artisans, agricultural producers, and small-scale manufacturers are able to tap into a global market, leveraging online platforms to promote and distribute their products.
Technology in India has also improved supply chain management, helping small businesses enhance their efficiency and competitiveness. For example, using digital inventory management tools allows small-scale retailers to better track their stock, plan for future demand, and reduce costs associated with overproduction or understocking. These systems are often cloud-based, ensuring that even small businesses with minimal IT infrastructure can utilize them effectively.
How Ghana and Africa can leverage technology for small business development
Africa is already on the cusp of a digital transformation, and Ghana is at the forefront of this wave. Ghana’s progress in digitization, particularly with mobile money interoperability, has laid a solid foundation for the country to follow India’s footsteps in fostering small business growth through technology. Mobile money services like MTN Mobile Money and AirtelTigo Money have enabled millions of Ghanaians to participate in the financial system, even in remote areas. This is a critical step toward empowering small businesses, as access to financial services is a key barrier to growth for many entrepreneurs in Africa.
Ghana has already made significant strides in digitization. The interoperability of mobile money systems allows users to transfer funds between different mobile money networks and banks, thereby enhancing the ease of doing business. Small businesses can now accept payments via mobile money, which has greatly reduced the dependency on cash and broadened their customer base.
However, there is still much to learn from India. Ghana, and other African countries, could further boost small business development by expanding digital payment systems beyond mobile money and introducing platforms like India’s UPI to integrate financial services more seamlessly. This would not only drive financial inclusion but also facilitate cross-border trade within Africa under the African Continental Free Trade Area (AfCFTA).
Serving niche markets and competing with large firms
One of the key lessons Africa can take from India is how small businesses can use technology to compete with larger, more established firms. Technology enables small businesses to focus on niche markets that are often overlooked by larger corporations. For instance, in India, I saw how micro-enterprises specializing in handicrafts or organic farming use e-commerce platforms and social media to reach customers who are specifically interested in their unique offerings.
Small businesses in Ghana and Africa can similarly leverage technology to serve niche markets and differentiate themselves from bigger competitors. By using online platforms to connect with customers who value locally produced or artisanal goods, these businesses can create a loyal customer base that values quality and uniqueness over mass-produced products.
Moreover, technology allows small businesses to offer superior customer service, which is often a significant advantage over larger firms. Through the use of customer relationship management (CRM) software, even the smallest enterprises can track customer preferences and purchase histories, enabling them to provide personalized service that keeps customers coming back. Social media platforms like Facebook, Instagram, and WhatsApp are also invaluable tools for engaging with customers directly and promoting products at minimal cost.
Technology’s role in enhancing operational efficiency
Another important takeaway from India is how small businesses use technology to improve efficiency. Cloud-based software for inventory management, accounting, and logistics has allowed Indian businesses to reduce overhead costs while streamlining their operations. Ghanaian small businesses can adopt similar technologies to reduce the inefficiencies that often plague small enterprises. With cloud accounting tools, for instance, businesses can manage their finances more effectively, reducing the likelihood of errors and ensuring they stay compliant with tax regulations.
Beyond that, digital marketing offers immense potential for small businesses to grow their brand visibility. While large firms often dominate traditional advertising channels, digital marketing offers affordable yet effective ways for smaller players to get their message out to a targeted audience.
My observations on technology use in India
During my training at the National Institute of Rural Development in Hyderabad, I was struck by how deeply technology was embedded in the daily operations of Indian small businesses. Whether it was through mobile apps that allowed farmers to track weather patterns and market prices, or microfinance institutions leveraging digital platforms to distribute loans efficiently, technology was at the core of nearly every business activity.
What stood out to me most was the way Indian small businesses harnessed technology not just for short-term gain but for long-term sustainability. They understood that technology was more than a tool; it was a strategic asset. This lesson is crucial for African small businesses as well. Technology should not be seen as a luxury or an add-on, but as a critical component of business strategy.
The future of small business development in Africa
Africa is poised for a digital revolution, and small businesses will be the biggest beneficiaries. By learning from India’s example, countries like Ghana can harness technology to foster entrepreneurship, drive innovation, and support economic growth. The key is to build infrastructure that enables technology adoption at all levels of business and to create an ecosystem where small businesses can thrive.
In my over 15 years of working with small businesses, I have seen the impact that access to finance and technology can have on a business’s success. It is imperative that policymakers in Africa prioritize the development of digital infrastructure, create enabling environments for small businesses, and provide training programs that help entrepreneurs adopt and effectively use technology.
By doing so, African small businesses can compete on a global scale, serving niche markets and leveraging technology to build resilience and scalability. I remain committed to supporting small business development in Africa, advocating for technology-driven solutions that empower entrepreneurs and promote inclusive growth across the continent.
>>>The writer is Kwaku Ofori, an expert in Small Business Management and Microcredit, a Chartered Accountant, and a STEM MBA Fellow at Babson College, Massachusetts. He can be reached via [email protected]
References
- Chandrasekhar, C. P., & Ghosh, J. (2014). ICT and the emerging digital economy in India: An overview. Review of Market Integration, 6(2), 197-214.
This reference provides an overview of India’s digital economy and highlights how ICT (Information and Communication Technology) has transformed the business landscape for small enterprises in India. - PwC Ghana. (2021). Ghana’s mobile money industry: Trends and impacts on financial inclusion.
This report covers the growth and impact of mobile money services in Ghana, with a focus on how it has supported small business development by enhancing financial inclusion.
- UNCTAD. (2022). The role of digital platforms in supporting small businesses in developing countries.
This publication discusses the role of digital platforms, including e-commerce and digital payment systems, in promoting small business development in emerging markets, with relevant insights for Africa.
- World Bank Group. (2021). Promoting small business growth through digital financial services in Africa.
A World Bank report that highlights the importance of digital financial services like mobile money for improving market access and financial inclusion for African small businesses. - OECD. (2020). Digitalization in India: A step towards inclusive development.
This paper outlines how digitalization has benefited small businesses in India, drawing lessons that are applicable to other developing economies like Ghana. - Klapper, L., & Singer, D. (2017). The opportunities and challenges of digital financial inclusion for SMEs. The World Bank Group.
This reference delves into the role of digital financial services in supporting the growth of small businesses, particularly in the context of financial inclusion and poverty reduction efforts.
