Mobile Phones and the Informal Economy

Western Kenya, June 2012

Over the past week or so, I’ve been scanning literature from African researchers on the broad theme of mobile phones and the informal economy. Here are some of my top findings:

  1. The Mobile Phone is a Business Tool and Income Generator – Regardless of the region (and cultural context) of study –  Cameroon or Cote D’Ivoire, Kenya or Botswana or Tanzania; and, regardless of whether the research methodology was quantitative or qualitative, respondents across the board considered their mobile phones as a critical capital expense for running their business, important for boosting efficiency, productivity, and incomes. In these studies focusing on the informal economy, respondents were micro and small enterprises, most often owned and operated by a single individual.
  2. Mobile phones and cellular services opened entirely new avenues of employment, particularly for youth – More visible in the earlier years of Africa’s mobile revolution, but still important enough today, are the new avenues that the ecosystem and infrastructure opened up for young people.  A slew of supporting services such as airtime sales, voucher sales, mobile money agencies, phone sales, download services, call booths, et al each had their day in the sun as a promising new way to tap into the double digit growth sustained by African mobile markets in the past two decades.  Most notably, mobile phone repair shops stand out as a whole new career path enabled by cutting edge technology. And, some of the best known hardware and software hackers went on to bigger things.
  3. Mobile money agents preferred to banks – Studies on this theme – if they were conducted where mobile money had reached critical mass – noted that mobile money agents were often considered as “one of us” by informal sector businesspeople as compared to forbidding requirements and investment in time required by banks. Mobile money agents were located conveniently in the same markets, often in neighbourhood shops, were open for longer and more convenient hours, and even on weekends. They were definitely more flexible and accommodating of the needs of informal sector commercial activity, and often a critical part of the business person’s network than any bank.

These three things caught my attention as showing up over and over again the literature, regardless of whether it was a PhD dissertation, an academic’s paper, or an MBA student’s thesis.

References:

The diffusion and Impact of Mobile Phones on the Informal Sector in Kenya (2010) – Wakari Gikenye and Dennis Ocholla

The role played by the informal economy in the appropriation of ICTs in urban environments in West Africa (2008) – CHENEAU-LOQUAY, Annie

The Economic and Social Effects of Mobile Phone Usage: The Case of Women Traders in Accra (2015) – Dissertation, Yvette A. A. Ussher

Mobile phones in the transformation of the informal economy: stories from market women in Kampala, Uganda (2016) – Caroline Wamala Larsson & Jakob Svensson

Cell Phone Repairers in Cameroon, 2000-2013 (2015) – Walter Gam Nkwi

This entry was posted in Africa, Airtime, Banking, Cashless transactions, Consumer Behaviour, Ecosystem, Flexibility, Income, Literature review, Mobile platform, perfect storm, Perspective, Prepaid Economy & Informal Sector, Sub Saharan Africa, Technology and tagged , , , , , , . Bookmark the permalink. Trackbacks are closed, but you can post a comment.

Post a Comment

Your email is never published nor shared. Required fields are marked *

You may use these HTML tags and attributes <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*
*