Old and New: Changing Perspectives on the Informal Economy
Martha Alter Chen’s table summarizing the still prevalent yet now considered obsolete view of the informal economy, against the revised perspective currently held is worth showcasing in its own right. Further food for thought comes from this little snippet from Sparks and Barnett: Gelb et al (2009) found that the “…productivity of informal firms is […]
The business model of drinking water in urban Ghana
In Accra, Ghana, packaging potable water into single serve sachets for the mass market (the prepaid economy) is a business model that has evolved extremely rapidly in response to customer demand and purchasing power. Bottled mineral water for the elite trickled down in quantity and form until the man on the street can buy a […]
Key Insights on the Reality of Rural India: Socio-Economic & Caste Census data
Recently, India released a selection of data from the 2011 Census of India – their focus was rural India’s socio-economic reality, primarily aimed at policymakers and programme designers. This was the first time the Government of the Republic of India has collected information on caste. The last such census was back in 1931, by the […]
Lessons for Formal Finance from Informal financial services
On one of my many field explorations on rural financial services, I found out, that for one mama biashara, as soon as payment checks in, she withdraws all her funds from her local coffee SACCO account, and spreads it out via micro-deposits across her more than 5 local informal savings groups (from right to […]
Purchasing Patterns in Cash Based Markets and Informal Economy
When cash flow is irregular and not always unpredictable, both in amount and frequency, such as it is for the majority earning a living in the informal economy, buyer behavior is not quite the same as for mainstream consumers with access to credit cards and regular paychecks. I’ve quite often made reference to how operating primarily […]
The ILO’s ‘historic’ informal to formal guidelines and framework: What does it actually mean?
The big news this weekend is the International Labour Organization’s (ILO) first ever Recommendations and Guidelines on the informal economy. My first take away from all the documentation is that the informal sector is no more the enemy of good and, now, can finally be addressed with the consideration it needs and deserves. Here’s a […]
People, Pesa & Place: A Multidisciplinary lens for innovation in social & economic development
This original Venn diagram visualizing the sweet spot of innovation success is a familiar one, with as many variations as there are practitioners. One of the most common is the one below, where business, people (or, as often, design) and technology replace the human centered qualities of viable, desirable and feasible. I’ve used them both […]
Assessing the size and value of investment opportunities with an informal economy footprint
There’s an interesting snippet from the Nigerian news yesterday that led to this framing of a necessary problem statement. KPMG’s head of private equity is quoted as saying: Meeting current needs of the one billion plus population and, the future demands of the rapidly emerging middle class consumers will drive the next wave of Private […]
Urbanization fuelling the informal sector
Most of the urban centers in these fast growing meta-cities have one very visible trait in common. Each is ringed by dense, ever-expanding squatter communities where large portions of the city’s population—and economy—reside. Squatter communities and shantytowns are now home to 800 million people and are projected to grow by 16,000 people every day for […]
Role of Chamas in informal sector entrepreneurialism in Kenya
Researcher Mary Njeri Kinyanjui shares deep insights from Kenya on how social cooperation and collaboration play an important role in the informal entrepreneur’s business financing strategy. In East Africa, particularly in Kenya, the formation of chama—a Kiswahili word for social group—has helped to enhance group agency and solidarity entrepreneurialism. Individuals collectively and cooperatively form a […]
