Last month, Kenya's Equity Bank and PayPal announced a partnership that will enable small business owners in Kenya to transfer funds from PayPal to their own bank accounts, giving them access to customers worldwide through a trusted, secure, and efficient payment system. The partnership marks a giant leap toward making e-commerce truly accessible to businesses, large and small, around the globe. Equity Bank customers will now have access to a global marketplace from which they and most other small businesses in developing countries have been excluded, hindering their growth in an increasingly digital world.
The high costs of starting up a business and limited access to financial services, have led many young Kenyan entrepreneurs to digital alternatives to traditional business startups. Ayshah Maende, a young woman from the coastal town of Malindi in Kenya, runs her business via social media. "Starting a business requires a lot of resources in terms of rental charges, wages and maintenance, and those resources are difficult to access," said Maende. "I weighed the option of having a bricks and mortar business and realised it was way too expensive." Instead, she opened a "social storefront" on various social media platforms.
The ingenuity of youth, combined with the pervasive global usage of social media, has created a new business venue, which offers advantages over both bricks and mortar businesses and standard websites. Social media sites offer access to a ready made global network of more than one billion Facebook users and 200 million Twitter users. By comparison, digital storefronts and websites are resource-intensive, may place geographical limits on their customer network or charge fees. Social storefronts plug directly into existing networks, giving them access to customers around the world for free.
As social media become more business-oriented, social storefronts can accommodate local payment systems. Micro-entrepreneurs such as Maende and her customers, who cannot access international payment systems or credit cards, find the ability to transfer and accept payments via Safaricom's mobile currency system, M-Pesa, critical. "M-Pesa is a quick and easy method for both my clients and me," said Maende. "Since most transactions are done online, there needs to be a safe, easily available, and secure way for transactions. M-Pesa offers that."
Not only do social storefronts provide these young Kenyan innovators access to e-commerce, but they also help them target their offerings to products and services endorsed by family and friends. Through tools such as Facebook, Instagram, Twitter, and Pinterest, personal connections become customer networks, where an individual can display a recent purchase or describe a positive (or negative) local shopping experience for their network to see. Social media encourages young entrepreneurs to give their customers real-time, highly responsive, and increasingly mobile customer service to keep negative experiences from going viral. Maende clearly understands this dynamic: "I knew once I had trust online, the business would be good to go. Thanks to the support I got from family, friends, colleagues, and customers who keep on spreading the gospel of my store, I managed to pull it off."
The social storefront can also be used to provide business development services to young Kenyan entrepreneurs. Through social media, young women and men can grow their professional networks by becoming "friends of friends of friends" or by following a role model or leader in their field of interest. These professional networks become forums for peer-to-peer learning, knowledge exchange, and problem solving as young women and men throughout Kenya connect online with each other and other young entrepreneurs beyond their borders. Highly localised and context-specific market research is facilitated through social media's open sharing of customer needs and competitors' products throughout networks, allowing entrepreneurs to monitor demands and trends by the month, week or even day.
Partnerships such as the one between Equity Bank and PayPal show that big business is taking notice of this new digital model. Mr. Efi Dahan, PayPal's Regional Director for Africa and Israel, was present at the partnership announcement. "This strategic partnership creates a major opportunity for young Kenyan entrepreneurs to build online businesses and accept payments from 137M active accounts the 193 countries around the world where PayPal is available. Making and collecting payments is often cited as one of the major hurdles to business in Africa, as the economies are still primarily cash-based, and this is also true for e-commerce where the most common payment method is "cash on delivery"". As social storefronts help young Kenyan entrepreneurs overcome barriers to international e-commerce, young people can compete in the global marketplace, becoming self-reliant, financially independent role models for their peers around the globe and invaluable customers for global corporations.
Elizabeth Holland is development and grant coordinator for Digital Opportunity Trust, Dot, a Canadian nonprofit working to transform young people into leaders of change as they facilitate technology, business, and entrepreneurial learning experiences to people in their own communities.
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