a day in the life of a microentrepreneur

Nokia Research Africa

Nokia Research Africa (NoRA) focuses on understanding the needs of the African mobile phone user and creates concepts and visions to fulfi ll these needs. NoRA studies consumer behaviour in low income communities with the aim of understanding the needs of mobile users in Africa in order to create concepts that address the needs of consumers through design of products relevant and add value to the lives of these users.

Findings from the studies are used to inform long-term Nokia R&D research and in development of products and services in a 5-10 year future period.Through these outputs, NoRA contributes towards social and economic development in Africa.

Nokia Research Centre – AfricaTel: +254 (20) 386 2243/4/5/7Fax: +254 (20) 3862248Ngong Road, Nairobi Business Park, Block CP.O. Box 29-00502 Karen, Nairobihttp://research.nokia.com/research/labs/teams/nokia_research_africawww.nokia.com

Nokia ResearchAfrica

A Day in the Life of a MicroentrepreneurImmersion Study

Cameroon | Ghana | Kenya

November 2008

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Executive SummaryNokia Research Center

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A Day in the Life of a Microentrepreneur

This microentrepreneur study was designed as a probe – a short, quick, intensive and exploratory research activity. This research design is aimed at obtaining rich and thorough information which yields cues for future research areas that may be pursued and examined in depth.

The focus of this probe is the informal microenterprise sector, specifi cally in Africa. It recognizes the important role that mobile phones have played in spurring economic and social development activities in Africa and scrutinizes the role and use of mobile phones in African microenterprises (businesses with up to 5 employees). The informal sector provides employment for a vast majority of people (40-60%) and especially provides an income stream for the working poor in urban and rural areas in the developing world. The private sector is today acknowledged as the primary engine of economic growth and the development of enterprises in this sector helps to spur local economies leading to positive economic and social transformation.

This probe seeks to gain a better understanding of the communication and mobile service needs of microentrepreneurs which, if addressed, would support and promote their microenterprises. This is an objective which falls within NoRA’s mission of catering to low income communities and users in Africa. The project is also tied to Nokia’s success in Africa: by promoting grassroots economies, Nokia supports the creation of an economically sustainable class of potential custom-ers for services and devices among the low income users.

5 locations were selected for this probe within 3 African countries, Cameroon, Ghana and Kenya and the activities of 5 microentrepreneurs were studied through a whole-day immersion into their business lives. While the number of microentrepreneurs studied was small, our fi ndings already reveal that microenterprises are very heterogenous in Africa covering a very broad range of activities. This probe offers a valuable glimpse into the business practices and patterns of this key economic sector. The main observations included:

• Business practices: the microentrepreneurs work very hard and long hours to generate a small amount of money whose fl ow is recorded and tracked at a basic level but with discipline; trust is a key asset supporting the value chain of goods/services and brand loyalty was observed to be high (to suppliers, partners); there is close family support for the microentrepreneurs’ businesses; word of mouth and social interaction are key avenues for business promotion; business associations were found to be desirable but hard to sustain (competition, mobility, large group dynamics); sustaining the business was perceived to be a higher priority than growth/expansion.

• Communication patterns: the microentrepreneurs select mobile service providers based on the popularity (it is cheaper to call people on the same network); it was found that among the microentrepreneurs voice usage was more popular than SMS (speed, preference for conversation); there is high sensitivity to MPS prices and tariffs.

Executive Summary

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Executive SummaryNokia Research Center

• Role of the mobile phone in the business: mobile phones are used heavily for business purposes (arranging meetings, scheduling and to-do lists, entertainment, time management, etc); mobile phones also play a key role in securing business dealings by making the micrioentrepreneur highly accessible and this has transformed the way business in done in many sub-sectors.

Overall, we observe that several predispositions and tendencies in the business and communication patterns of microentrepreneurs yield favourably to mobile phone use. This reveals an opportunity to explore further development of basic (non-fancy) applications to address generic but business specifi c management needs. Some intial potential areas are:

1) Banking and/or book-keeping which are key services used by the microentrepreneurs and have a signifi cant bearing on their businesses. While subsistence-based microenterprises may not benefi t from facilitation/integration of these services into the daily running of the business, growth-oriented microenterprises stand to gain from developments in this direction.

2) Social networking - which characterizes the lives of the microentrepreneurs. The microentrepreneurs tend to agglomerate and leverage these networks for business dealings. Combined with the heavy use of mobile phones for business, the integration of simple social media services for business promotion is another potential area of exploration.

3) Business management. While the microentrepreneurs mainly use their mobile phones for voice communication, the devices are also somewhat used for business and time management at a basic level. The potential of entry level mobile phones to be used as tools for organization and scheduling for business purposes emerged.

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Contents

Introduction .........................................................................................................................................................................................8

Background ..........................................................................................................................................................................................9

The Project ............................................................................................................................................................................................12

A Day in the Life of a Microentrepreneur: Microentrepreneur Profi lesAccra ............................................................................................................................................................................................................. 14Douala .......................................................................................................................................................................................................... 24Kisumu ......................................................................................................................................................................................................... 34Mombasa ..................................................................................................................................................................................................... 44

Nakuru ......................................................................................................................................................................................................... 54

Overall Observations and Conclusion ...........................................................................................................................................65

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Introduction

The signifi cance of Micro, Small and Medium Enterprises (MSMEs) in generating employment, stimulating economic growth and alleviating poverty is acknowledged around the world today. This is owing to their great numbers and the vast geographical areas and many sectors in which they are found, making MSMEs the backbone of the private sector of many local economies1.

The defi nition of an MSME globally varies according to various parameters: labour, capital, loan size, fi xed asset and annual sales turnover. The size limit is among the most common defi nitions used in developing countries2. In the African context, enterprises may be generalised in size as – micro: less than 5 workers; small: between 5-19 workers; medium: 20-99 workers; large: over 100 workers3 (however in Northern economies for example, all businesses having between 1-500 employees are considered SMEs1).

Majority of MSMEs in Africa fall within the informal sector – generally understood as the sector with unregistered economic activities and most (over 60%) of them are micro-enterprises owned by one person, operated in rural areas, and run by women1.

Small businesses are perceived as instruments of social and economic transformation because1:

SMEs (*including microenterprises) make up 90 percent of business units in the world, accounting for 50-60 percent of total employment. • If the informal sector is taken into account, it is believed that SMEs in Africa would account for about 99 percent of all business units with a high • proportion of these businesses being run within the householdSMEs are the main contributors of employment opportunities for the poor• SMEs help to redistribute income to the economically vulnerable people and places - poor uneducated workers and women with few alternative • sources of income and remote and marginalized rural settingsSMEs stimulate local economies as they tend to agglomerate to reap economies of scale and to co-operate• SMEs promote a culture of entrepreneurship and self reliance due to their low barriers of entry (e.g. education/skills, business assets, and required • fi nances) especially at the micro level

1 Albaladejo, Manuel. (2002). Promoting SMEs in Africa: Key Areas for Policy Intervention. Report prepared for the African Development Bank & United Nations Industrial Development Organisation (UNIDO)2 Srivastava, Ritu. (2008). Status of MSMEs in Africa. ICTs and MSMEs: A look at Africa. Center for Science, Development and Media Studies (CSDMS)3 Elaian. (1996) As cited by Albaladejo, 2002

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Introduction and BackgroundNokia Research Center

Background

Over 90% of all new jobs in Africa are created through new small businesses in the informal sector

Support for small businesses contributes towards the growth and development of local and grassroot economies.

Mobile technologies have catalysed the growth of the informal sector in Africa - empowering local entrepreneurs and businesspeople.

It is estimated that the informal sector in Africa accounts for about 80% of non-agricultural employment and 60% of urban employment. Over 90% of all new jobs in Africa are created through new small businesses in the informal sector 1.

Statistics on successful economies in Africa have shown a positive relationship between the development of entrepreneurship and economic growth and development. The role of the private sector as the engine of growth and the signifi cance of MSMEs in the development process has gained importance in the last decade leading to the understanding that “Africa’s ability to [improve its economic performance] depends on its ability to harness the entrepreneurial potential visible in its streets, marketplaces and SMEs”2.

Given the foregoing, it is envisaged that support for MSMEs would contribute towards their growth and development and consequently to the stimulation of local and grassroot economies. The majority of microenterprises are operated by only 1 person and are dominant in rural areas. The smallest microenterprises are businesses existing mainly to fulfi ll subsistence needs of which very few graduate into larger fi rms. These microenterprises are usually operated from the street or household and do not have a proper business site. Microenterprises tend to serve localised markets and to cluster together. However these are usually informal market agglomerations where business arrangements take place but does not usually lead to learning and upgrading1. Low entry barriers make these informal activities highly accessible therefore competition is usually high and margins are small.

Mobile phones have gained special signifi cance for entrepreneurs in Africa: from enabling farmers to access market information through their phones, helping to increase their incomes through better prices; to enabling casual labourers to advertise their services and to avoid time wasted waiting on street corners; to helping the unbanked populations transfer money to relatives or to pay for goods and services through mobile banking - mobile technology has catalysed the growth of the informal sector across the continent empowering local entrepreneurs and businesspeople3. 1 (Chen, 2001 as cited by Alabaladejo, 2002)2 Beyene, Asmelash. (2002). Enhancing the Competitiveness and Productivity of SMEs in Africa. Africa Development, Vol. XXVII, No. 3, 2002. pp. 130-156. Council for

the Development of Social Science Research in Africa.3 Banks, Ken. (2008). Mobile Telephony and the Entrepreneur: An African Perspective. Microfi nance Insights. https://www.microfi nanceinsights.com/articles_new.

asp?member=nonmembers&id=146

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This study explores the role and use of mobile phones and services in the microenterprises of 5 entrepreneurs with a view to better understanding the communication and mobile service needs of MSMEs in general which, if addressed, would support and promote their further growth. Among the outputs expected from this probe are new design and service concepts for mobile devices which would support micro and small businesses in the African market, ideas which have originated from the microbusiness owners themselves.

The study recognizes that while the informal sector provides employment and income for a vast majority of poor people, informality does not provide a solution for poverty alleviation in the long run. Rather, a conscious development of informal sector enterprises can help to increase their incomes and size leading to their greater formalisation and integration into their national economies. Studies have shown that countries with the highest per capita income have smaller informal sectors while poorer countries have higher proportions of informal activities4. The benefi ts associated with increased fomalisation include: higher quality, better paid and more sustainable jobs; a broadened tax base; increased investor confi dence in local economies, improved access to business services, formal markets, and productive resources; increased information on local enterprises which facilitates deal-making, etc.

Nokia’s success in Africa is also tied to the small scale entrepreneurs: by promoting grassroots economies, Nokia supports the creation of an economically sustainable class of potential customers for services and devices among the low income users.

4 OECD. (2006). Promoting Pro-Poor Growth: Removing Barriers to Formalisation

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Overall ObservationsNokia Research Center

Did you know?

The International Labour Organisation coined the term “informal sector” over thirty years ago, during an • employment mission in Kenya, as a way of referring to the unregistered, unrecorded economic activities it found there1

In developing regions, informal microenterprises constitute • 40-60% of total urban employment

In Africa, informal microenterprises contribute 78% to total non-agricultural employment and • 93% of all new jobs

In urban areas in Africa, informal microenterprises provide up to • 70-80% of all existing jobs

Over 50%• of MSMEs in Africa (both rural and urban) are run by women

However, women owned microenterprises tend to be smaller, weaker and less profi table o (women aim at income security and diversifi cation while men generally aim at expansion and profi tability)

Informal microenterprises contribute more than • 25% of GDP on average across Africa

Over 50%• of informal microenterprises are rural based (even disregarding agricultural activities)

Trading activities• (including street vending and ambulant trading) constitute more than half and up to 75% of informal microenterprises

Around • two-thirds of informal microenterprises are run by working proprietors (one-person businesses)

Source: Haan, Hans Christiaan: Training for Work in the Informal Micro-Enterprise Sector: Fresh Evidence from Sub-Sahara Africa. Springer. 2006.

1 ILO. (2008). Informal Economy http://www.ilo.org/dyn/empent/empent.Portal?p_prog=S&p_subprog=IS

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The Project

The microentrepreneur project is a fi eld study covering several microentrepreneurs from different locations in Africa looking at the value chain of goods and services from the point of origin to the customer. The project aims at broadly understanding the needs among entrepreneurs in the informal sector in Africa who are self-employed at the bottom of the economic pyramid.

Project Objectives

This study aims to increase understanding on the needs, wants, motivations and the daily practices of a small-scale entrepreneur•

The study also seeks to highlight which characteristics are common to micro-entrepreneurs around the world•

The probe ultimately aims at drawing insights and signals from users to aid the design of a new device and service concept for microentrepreneurs in •

low income communities to enable them increase their income Methodology

The study took the form of an intensive 1 week ‘probe’ comprising fi eld visits and general discussions with microentrepreneurs in the fi eld followed by a full day immersion into the business-lives of 5 microentrepreneurs located in Cameroon, Ghana and Kenya from the start to close of their businesses. Within the same 24h period, NoRA researchers accompanied the 5 microentrepreneurs to their various places of work and recorded the sum of their business interactions, practices, management and needs while examining the role and use of the mobile phone in the process. Some interviews were also held with different actors in the value chain of the MSME’s product or service (e.g. suppliers, customers) to better understand the workings of the business. Lastly, supporting desk research on microentrepreneurs’ status and activities in Africa was carried out to support the project.

These activities were recorded, documented and analysed, the fi ndings of which form the core part of this report.

The Microentrepreneurs and their Locations

• Accra, Ghana - West Africa: Sea fairing fi sherman• Douala, Cameroon - Central Africa: Craftswoman• Kisumu, Kenya - East Africa: Motorcycle taxi operator

• Mombasa, Kenya - East Africa: Hairdresser and beautician• Nakuru, Kenya - East Africa: Fruits and Vegetable Vendor

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A Day in Accra Name: Nii Aryee Age: 45Marital Status: Married with two children.

His wife stays home to look after the young children

Skills/training: Fisherman trained by his father

Trade: Fisherman, boat ownerOther: Respected and trusted

central fi gure of the fi shing community

Nii Aryee (alias One Man) is a fi sherman who lives in Gbese with some of his family members. He was born in Jamestown from the clan of Gbese. He is from a royal household and due to his work lives in the family house and on weekends goes to his own house in Agaga. He lives with three of his children in Gbese but the other two stays in his house at Agaga.

Aryee is 45 years old and married with fi ve children. Aryee has a Middle School certifi cate to his credit. His wife is a fi sh seller and the single most important business partner for Aryee. His fi rst son, who is 32 years, is a fi sherman and is in charge of the family business when the father is not around. The second son is 28 years is an IT support person. The third born daughter is 26 and the fourth is also a daughter who is 24 years. The daughters are both hairdressers and the fi fth is just a baby girl of six months. His fi rst son is part of his crew and he is the one in charge when Nii Aryee is am not around or needs to rest.

When Aryee has a little time off from fi shing, he uses his spare time to attend to other affairs like solving family and community issues.

ACCRA is the capital city of Ghana. The name is derived from the Fanti word ‘Nkran’ (an ant) by which designation the tribe inhabiting the surrounding district was formerly known. Among the attractions of Accra is the fi shing port at Jamestown.

Jamestown is a district in the city of Accra, Ghana. It originated as a community that emerged around the British built James Fort on the Gulf of Guinea coast, and became a part of Accra as the city grew. A lighthouse, the James Fort Lighthouse, was built by the British at James Fort in 1871. Jamestown is now a fi shing port populated primarily by the Ga, an indigenous people of coastal Ghana. It is also a tourist destination for those wishing to see the remnants of Accra’s colonial past.

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AccraNokia Research Center

Ghana

Population: 23 million

Ghana was the fi rst colonialized African country to gain independence in 1957. Well endowed with natural resources, Ghana has roughly twice the per capita output of the poorest countries in West Africa. Even so, Ghana remains heavily dependent on international fi nancial and technical assistance.

Gold and cocoa production, and individual remittances, are major sources of foreign exchange. The domestic economy continues to revolve around agriculture, which accounts for about 35% of GDP and employs about 55% of the work force, mainly small landholders.

Ghana opted for debt relief under the Heavily Indebted Poor Country (HIPC) program in 2002, and is also benefi ting from the Multilateral Debt Relief Initiative that took effect in 2006. Thematic priorities under its current Growth and Poverty Reduction Strategy, which also provides the framework for development partner assistance, are:

• Macroeconomic stability • Private sector competitiveness • Human resource development • Good governance and civic responsibility

Sound macro-economic management along with high prices for gold and cocoa helped sustain GDP growth in 2007. In 2008 promising oil sources were found off the coast of Ghana.

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0300 The boat arrives at the fi shing location. Battery powered lights are switched on to aid in the process of laying the nets into the ocean. Measuring 300-500 meters long and 10-30 meters deep, the seine net is placed into the ocean as a loop. The Fishermen detect shoals of fi sh by smell, presence of fi shing birds and by refl ections in the water. First phone calls are made to the other boats to locate the shoals of fi sh.

0500 - 0600 The boat starts to head to shore.

O130 The fi sherman’s day starts very early. Most of the fi shermen sleep by the boats and wake up at 0130 and hit the sea at 0200.Boats use 40 HP outboard motors to drive to sea to the best fi shing locations which might be 20 km from the shore.

0400 The net is being dragged into the boat with the fi sh inside. If the net is empty this takes 30 minutes, if there is plenty of fi sh it takes 1-2 hours. At this point the fi rst communication with the main buyer, the boat owner’s wife, are made.

0700 The sale of fi sh starts immediately when the boat arrives on shore. The boat owner’s wife buys the fi sh and a carrier takes the fi sh to her house.

Delivery of the product/ services to the clients

From Wednesday to Sunday Aryee normally goes to sea with his crew of twelve men. On Tuesdays he stays on shore to mend his nets and do maintenance on his boat. Based on old traditions, it is taboo to go fi shing on Tuesdays in Ghana.

Aryee wakes up at 1:00 am to get to sea. He goes to sea only when he has few workers for the trip. When there are a larger number of workers he allows his son to be in charge. There are two sessions a day for fi shing - the dawn session, from 2:00am to midmorning, and the evening session from 4:00pm to 9:00pm. Once or twice a week the boats spend 24 hours at sea, from 7:00am to 7:00am. On these days they can travel about 200km offshore. They make a long loop with the fi shing net in the ocean around a shoal of fi sh. The net is then pulled to the boat from both ends.

It is not always that they are able to catch fi sh, when the weather is favourable they could catch about 100 cartons a day but if things do not go well they could get only 10 cartons. A

The Working Day

carton of fi sh could cost 6-12 Euro, depending on the season. The main fi sh caught are herring, red fi sh and cassava fi sh. They sometimes catch young and small herring which if not bought are dumped back into the sea.

When Aryee and his crew come back from sea, he sells all the fi sh to his wife who then sells it to their customers at the seashore. The customers either smoke and sell the fi sh or sell it fresh to consumers; mostly ordinary homes. The fi shmongers hire some of the boys around to carry the fi sh for them from the shore. The boys are paid with some smaller fi sh out of every carton of fi sh they carry.

Most fi shermen don’t have the privilege of owning a boat like Nii Ayree, so they hire a boat or join a group of other fi shermen to go to sea. Those who hire the boat deduct their petrol expenditure from the money they make. They then divide the fi sh into 3 parts and one-third is given to the owner while they keep two-thirds.

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0800 - 1500 Meanwhile, the fi shermen share the money, clean the nets and boat, eat and rest. They fi ll the outboard motors’ tanks and prepare the boat for afternoon fi shing.

1500 - 2000 The boats head for the ocean for another day-fi shing trip. Afterwards, preparing the boats and nets for the next morning’s fi shing takes till 2200. This leaves two and half hours for sleeping before the day starts all over again.

0730 The fi rst customers arrive to buy the fi sh from the fi sherman’s wife.

The Value Chain

The fi sh delivery chain is characterized by speed. The faster the chain is, the more profi t the whole chain makes. The fi rst boat to hit the shore gets the best price for the fi sh. The price and catch information is constantly exchanged between the fi shing boat and the fi sherman’s wife, who is usually the main buyer and retailer.

The fi sherman’s wife starts to call the boat 2-3 hours before the boat arrives on shore. The wife is also in contact with the customers, who ask about the day’s price which changes according to the information on the size of the catch and arrival time. The fi sherman’s wife also calls other retailers to check their price levels. The wife makes presales on agreed upon prices one hour before the boat arrives. The median price for the fi sh carton (approx 10 kilos) would be 8 Euros when sold from the boat to the fi shermans wife. The fi sh carriers are paid with small fi sh, which they can sell forward or keep. The wife then sells the fi sh to smaller retailers for 10-12 Euros per carton. Each smaller retailer then pays somebody for cleaning of the fi sh and chopping fi re wood, this costs 2 Euros. She herself salts the fi sh, prepares the smoking oven and smokes the fi sh for 11 hours. Fish must be placed in the oven very fresh, otherwise the sale price goes low. When the fi nal product salted and the smoked fi sh is being sold at the market the price for the original carton gets to 16 Euros.

The value chain and earnings: 1. Fisherman: 8 Euros per box: One-third goes to the boat owner, two-thirds are shared

between the 6 fi shermen based on their age (older and experienced are paid more).

Daily earnings vary from 10-20 boxes, daily earnings after the petrol costs is (10-30 Euros for petrol, 100-200 Euros from the fi sh)

200 is divided in thirds: 66 Euros for the boat owner – 30 Euros for the petrol and 33 for earnings. Other maintainance costs approximately 0 to 50 Euros per day. The fi sherman will get 5 to 10 Euros per day. The boatowner carries the risk of not getting anything for days, but on a good day he can make relatively good profi ts.

2. The fi sherman’s wife usually buys the entire fi sh load for the current market price. The wife then sells the fi sh forward to 50 vendors and private customers with the price of 12 Euros per carton (average daily earning 20-40 Euros)

3. A vendor who buys the fi sh smokes them and sells the smoked fi sh to customers for 16 Euros per carton. She pays 1 Euro to the wood chopper and 1 Euro to lady fi sh cleaner.

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The Mobile Phone in Business

Nii Aryee currently owns his third mobile phone having given his past phones to his wife and child. His phone is well maintained and has never been stolen. He also said it has never gone for repairs. He is subscribed to local provider Tigo because it is very clear on the sea. He said he could buy about GH¢20 (18 Euros) of talk time every week.

Nii Aryee used a Nokia 1100 and said it was a very strong phone (actually this is the most popular phone among the fi shermen). The reason for 1100’s popularity is it’s remarkable capability to survive being dropped in water. “You just disassemble the phone and let it dry in the sun for half and hour and put it back together and it works…and it is the only phone which does this. Other phones are gone”.

Still, Aryee also owns a non-branded Chinese multimedia phone and he says that he has been satisfi ed with it, because he hasn’t ever dropped his phone. He wanted a phone with some style.

Aryee uses the phone a lot over a day. He calls his wife once when he is at sea and then he receives a lot of other calls from her. The wife is the communication linke between customers and him (she can call up to 10 times) He also calls other fi shermen at sea to ask about their condition there (about 5-6 times) and vice versa. He also uses the phone to resolve problems for his business. He is a leader of a fi shermen’s group so they call often to report cases.

Aryee uses his mobile phone very actively during the day. He explains that over the past 2-3 years the whole business has changed because of mobile phones. Fishermen are continuously exchanging information on the location of fi sh shoals and with the sales contact (usually the fi sherman’s wife) numerous calls are made to check on the daily trends of fi sh prices and the beaches with the best price (beaches to land on). Besides communicating with the sales-end and other fi shermen, Aryee actively uses the calculator on the phone to calculate the value of the catch share for each fi sher. A particular use for the camera has been developed in explaining the location of underwater rocks which can tear the nets. When such rocks are located, the fi shermen take pictures at that location facing a direction where land may be seen to later explain the location to other fi shermen. The video camera is also used to record common quarrels between the fi shermen and they can later be sorted out within the community with the video as a proof.

The desired features for a phone would be entertainment such as radio and television. Entertainment is important, because the fi shermen spend so much time on the boat, going to the sea and coming back. The other desired features are to do with navigating and locating the fi sh. GPS was very much admired feature.

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Networks

The fi shing community is a tight community and like many tight communities the social hierarchy is very tight. These hierarchies seem to be:

1) The family. The role of the family in that community; how many generations family has been fi shing on these shores? Does the family have a role in local decision making?

2) Size of the fi shing boat. There are 3 different categories of boats among the canoe fi shermen:

1. Small canoes without motor for 3-4 persons. These fi sherman fi sh near the shoreline with throwing nets, hooks and small nets. They mainly catch fi sh for their families, but also for sale whenever the catch is good.

2. Middle sized canoes with outboard motors. These boats carry six fi shermen and sell most of the catch. Because of the size of the boat and number of fi shermen they neither can use the big nets nor go far away from the shore to the sea.

3. The big canoes which are operated by 12 men which operate with big nets even 200 km from the home shore. The boat owner has a high social and economic status, although he is also vulnerable to economic risk during bad times. The Boat owner gets 1/3 of the catch, but all the costs of the boat, motor, petrol and nets are also his. When the catch is low, the boat owner may be making losses while other fi shermen on the boat just need to do with slightly smaller income.

3) Education is also a factor which can raise the status of a fi sherman in the community. Primary education, with reading and writing skills and proper understanding of the societal processes and economy creates a competitive edge also in the fi shing communities. This is widely acknowledged and the fi sherman aim to educate their children as well as possible.

Key:• Arrow shows direction of communication

• Thickness of line indicates frequency of communication

Email

Phonecall

SMS

Face to Face

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The Local Economy

Fishing as a profession in Ghana:

The number of fi shermen at the seaside in Ghana is 163,000 with 12,000 boats. This is about 13 fi shermen per boat. Because only the biggest canoes can carry a crew of 12 men, the fi gure indicates that some boats must have 2 crews fi shing in turns. The actual size of the economy of the fi shing industry is diffi cult estimate, because the fi shermen are small earners and they don’t pay taxes or report their catch, even though most of them keep books on the earnings and the size of the catch. The other fi shing related activities in Ghana include 224,000 fi shing and fi sh-farming related services and in Accra alone 43,800 services. It can be carefully estimated that around 1 million Ghanaians get earnings from some part of the fi shing industry.

Over the past 10 years, the size and number of the international fi shing boats has grown as the fi shing off the coast of West Africa is very loosely regulated. Multinational fi shing fl eets catch huge amounts of fi sh off the cost leaving very small numbers of fi sh when they are done. This fi sh is further produced and sold in the industrial world.

The population of the most important commercial fi sh e.g. Atlantic Herring are dropping due to this overfi shing. The small scale fi shermen, who fi sh for the local Ghanaian markets and not for the international markets are losing their catch gradually. The shoals of fi sh are less and are located deeper and further away from the coast. Fish has traditionally been the most important source of protein for low income communities in Ghana. As a esult of overfi shing and scarcity of fi sh, fi sh prices are increasing and many of the poorest people can’t affort fi sh anymore. Almost 10% of the fi sh sold in Ghana needs to be imported, because of the increasing demand and diffi culties that small scale fi shermen face.

Meanwhile in Ghana the population growth and urbanization is increasing demand for fi sh while the number of small-scale fi shermen is growing. This creates tighter competition between the fi shermen but also raises fi sh prices causing the poorest people to be unable to afford the most important and available source of protein and oil. The situation is complex, the demand for fi sh is high and the size of the catch is simultaneously getting smaller. How can the fi shing industry in Ghana be more profi table for the small scale fi sherman?

The single most important thing would be tighter regulation and supervision of the international fi shing fl eets operating off the coast of West Africa. More organized fi sh farming could also be introduced at the seaside. Sometimes when the catch is good some of the larger sized fi sh are left unsold (because the markets are local and during a good catch prices are low and local markets get saturated easily). Due to the lack of cold chain services and/or low development of the fi sh food products industry the fi sh that doesn´t get sold is usually dumped back to the sea. This situation would be helped by a carefully developed fi sh food industry and communally owned cold chains. Additionally, it would require re-training of people in the fi shing value chain for the new jobs around the manufacturing, storing and selling of fi sh products. This is not only a structural and economical challenge but a great social challenge - currently the fi shermen are competitors and the competition is on the catch and the sales leading to challenges in co-operating between each other.

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When traveling long distances they use about 60 liters of petrol but otherwise if close, they could use about 20 liters. The petrol cost is the highest daily cost as the petrol costs 50 Euro cents per liter. The petrol costs vary from 10 -30 Euros per day. The bigger fi shing canoes use 40 horsepower outboard motors. The motor is single most expensive investment for the fi sherman. The Ghanan National Canoe Fishermen Council provides the fi shermen and boatowners with loans for buying nets, boats and outboard motors. The fi shermen pay small weekly fees to the Council which ensures that the loans available for the fi shers. They contribute GH¢200 (150 Euros) each for a week to pay back an outboard motor and GH¢50 (40 Euros) for a fi shing net.

Nii Aryee’s boat takes 12 people on board. Some are his family members while others are friends working daily as his colleaques.

The boat they use could cost about GH¢12,000 (10,000 Euros) currently. The wood use for the boat is known as Wawa for which the carvers pay royalties to government to harvest. They then carve into boats it before it dries.

The fi shermen do not pay taxes and they do not have licenses. Nii Aryee stopped saving in the bank because they failed to fulfi l a promise to him for a loan. Aryee also stated that there was mobile banking but due to the bank not helping with the loan he decided not to save. He reported that has his own way of keeping his money and he also keeps records on how he spends his money on the business.

Aryee is a fi shing group leader and some other fi shermen come to him for advice and help. When the fi shermen report their problems to him, he also takes it up with the relevant authorities.

Petrol 60 – 180 Euros

Loans (if there are any):

-Fishing net 40 Euros

-Outboard motor 150 Euros

Fishing Council membership 4 Euros

Phone bills 20 Euros

Total 64 – 374 Euros

Weekly costs per boat for the boat owner:

Bad Week Good Week

Earnings 480/3 = 160 Euros 3200/3 = 1,066 Euros

Costs 374 Euros 64 Euros

Total 214 Euros 1,002 Euros

What a crew 26 Euros 177 Euros member earns per week

Weekly Earnings per Boat:

60 - 400 boxes per week at 8 Euros each or 480 – 3200 Euros per week

Theorethical earnings in a week for Aryee vary from – (negative) 214 to 1,002 Euros. Average earnings being around 200 €/ week:

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Observations and Conclusions

Business practices:

Book keeping seems to be quite a usual practice among the boat owning fi shermen. This is done at home simply by counting daily costs and sales and savings. From this information the fi sherman mostly observes the development of the business, and creates personal “business forecasts”. If the profi ts are going down the fi sherman needs to react as early as possible to minimize the loss. The means for improving the business are mostly social - motivating the fi shing crew by motivational and inspirational speeches and some extra earnings. Cutting of costs is also possible, but very diffi cult as the costs are directly related to the fi shing activity.

Nii has a special relationship toward banks: he keeps his savings at home and in the bank, but after he was refused a loan from the bank, which in his own words was already promised to him (which is why he selected the bank in the fi rst place) he developed a mistrust towards banks. He feels cheated by the banking system.

He has heard about the mobile banking, but doesn’t know if works in Ghana.

Microloans are available from the Fishing Union, but the fi shermen with small boats don’t usually belong to the Union because they can’t afford the weekly fees regularly and are also excluded from receiving the loans. When two fi sherman interviewed asked were asked about the investments they would make if they had possibility, they didn´t have any ideas or dreams about increasing the mumber of boats or nets or some other way expanding the business. They would invest in petrol, boat repairs and the nets. We are not sure if this is lack of vision or the concept of fi sherman is so strong that there is no need or want to change it or is because the question was about a loan, which is de facto something that needs to paid back. This has sometimes proved to be challenging and has also kept the loans sums small and interest rates high.

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At a glanceThe Economic Value Chain in the Fish Micro-Industry

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A Day in Douala Name: Madame Ouethy RosieAge: 47Marital Status: Married with 4 children aged 12

to 21Skills/training: High school. Trained 1year with

professional painter and teacher and 3 months with drawer. Drawing since little girl. On the job learningDrawing, Painting, Batik

Trade: Handicrafts (creates, transforms and resells)

Other: Christian. Religious. French speaking (not bilingual).From a well off family. Travels. Has a vehicle with driver

Madame Rosie owns and runs an art handicrafts shop. The shop is well established and has been operating for the past 11 years. She employs an assistant at the shop who has been with her for the past 5 years. The peak periods for business are usually the months of August, December and January and her main clients are tourists who are walk-in customers (95%).

Madame Rosie is an artist with skills in painting, drawing and batik creation. She works from her shop and from a make-shift studio at home (created in a small space under a straircase). She is a member of various groups including the Association of Artists in Douala, a self-help-group (merry-go-round), and a microfi nance group for her shop.

She also helps to manage and look after the family farm where she supervises some farm hands.

Douala, the commercial capital, is the capital of Littoral Province and is situated along the Coastline. It is the largest City in Cameroon with a population of over 2 Million (2005 est).

The city enjoys a tropical climate.Douala handles the country’s major exports and trade with Chad. A notable feature is the Port of Douala which is the country’s largest port. The International Airport of Douala (DLA) is also the major international airport in the country.

Most buildings in the city are old are colonial structures and the dominant means of transport is old salon cars and motorbikes.

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DoualaNokia Research Center

Douala

Cameroon is a country with a population of 18.4 Million (July 2008 est) in an area of 475.442 Km2 of which 1.3% is water. The country has 402 Km of coastline. The administrative capital is Yaounde while the commercial capital is Douala. The main languages spoken are French and English while the main religions are Christianity, Islam and traditional beliefs.

What the people say: The town’s cash liquidity is considered high (a money town) and it is a very busy. About 70% of employment is in the informal sector where the main trades are taxi running, carpentry, mechanics, retail shops, secondhand wares, tailoring, food hawking and salons.

In terms of the cost of living fi gures, transport ranges from Euro 0.31 to 0.62 by taxi and Euro 0.15 to 0.23 by bus. Food averages a minimum of Euro 1.54 at a restaurant and Euro 2.31 can provide two home meals.In telecommunoications, there are 3 mobile phone operators (one is state owned). It is more expensive to call across networks. Standard SMS costs are Euro 0.08 within country and Euro 0.38 international. Call costs range from Euro 0.15 - 0.23 per minute within the network and Euro 0.23 across networks. There are multiple tariffs with different rates.

The market: The main market in the city is located in Akwa and is the commercial centre of Douala. It is a legal market with stone & wood structures. The main traders are fl orists, handicrafts artisans, food canteens and hawkers (secondhand items, cosmetics, raw materials).

The infrastructure services available at the market include electricity, water, sewerage, tarmac roads & highway, parking, fi xed telephone lines and cellular coverage.

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0730 - 0800: M a d a m e Rosie’s assistant opens the shop around 0730.

She cleans and displays art and crafts (inside and outside the shop). The assistant usually takes her breakfast at the shop

1000: Madame calls for and sends her assistant on various errands within the market

1200: Madame leaves with carpenter to get supplies for the job within the market. The shop assistant is left in charge and stays close by the shop.

Madame returns after a while with carpenter to fi nalise on materials, sizes, costs and fi nishing. The fi rst customer, a walk-in customer drops by.

0900: Madame Rosie arrives at work. She fi rst visits a supplier’s shop at the market. She looks at her calendar on the phone and notes and buys a few items from a hawker.

The shop assistant fi nishes up the fi nal cleaning chores.

A friend makes a social call on Madame to collect a book and she also handles 3 personal calls during this time.

1100: She sends her driver on various delivery errands. During this time a friend seeking business advice but Madame is confl icted since her friend is a competitor. She spends the morning buying various supplies and planning for her business. A carpenter visits to discuss fi nishing for the shop.

The Working Day

Illustration of the movement of goods to market

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1400: It is turning out to be a slow day with little activity. Such time may be spent sewing and modifying items or sketching, or reading. She may also leave for the farm or go to the house to paint and do batik printing on fabric. She takes the chance to visit her husband who is working from home.

1300: A fellow shop-owner and passes by for a lunch time chit chat.

Madame Rosies goes for lunch at a local food store (although she often goes home). Over lunch she has a chance to talk with other local business owners.

Several hawkers sell their wares at the food store.

1500: Madame is back at the shop. She sends her assistant out to make some payments. Usually, she may use this time with assistant to look at the shop’s record books and consolidate weekly records

1700 - 1830: A customer walks in and asks for asks for the assistant, whom she is familiar with. The customer in interested in purchasing an item and the assistant comes out to consult with Madame over bargained price. They fi nally reach an agreement.

A male peer visits on a social call. Madame shows him some paintings she would like him to frame as he is also an artist. Madame instructs her assistant to close shop at 1830 and proceeds home making a few social calls in market.

1600: The local microfi nance deposits and payments collector calls in at the shop. Madame instructs her assistant to handle the day’s deposit which she does and records.

Madame’s phone alarm goes off – a reminder to pray. She usually prays from anywhere; the shop, church, or home.

Another customer walks and looks at front display. A group of tourists walks past her display to a neighbouring shop led there by a local.

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The most used features that Madame Rosie uses on her mobile phone are: voice, sms, organizer, multiple alarms, calculator and the camera. She would wish to have additional features on her phone such as a radio (her previous phone had one), browsing capability (although operator costs are high), organizer & alarms, and record keeping.

Her expenditure averages Euro 46.15 on air time per month. The operator she uses is the fi rst operator she signed up with over ten years ago. She likes that she can reload airtime reload anywhere in country, she has access to a roaming service.

She calls to organize meetings, confi rm details or arrangements with business partners, inform customers on the availability of interesting goods, notify clients on completion of a task, to inform suppliers on her intent to visit a site. She also

The main business related use of her phone is time management & planning. She does not order or close deals over the phone.

She owns a Samsung D840 which cost about Euro 192.31.

Phone Calls80% Personal and 20% Business.

AssistantPhone with her always

OrganizerCalendar, notes, meetings

AlarmMultiple reminders. Prayer time

Text

CalculatorCalculations and Conversions

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Networks



Email

Phonecall

SMS

Face to Face

- Money contribution- Social support- sms, email, face2face- poor collaboration

- 95% walk-in, few loyal- Mainly tourists, few

locals- referrals, grapevine- cash, point of sale, no

delivery services - face2face, calls,

business cards

- Regulate for fair playing grounds

- Maintain facilities- Promote tourism - They are failing to

do so well enough to promote art/tourism & facilitate fair competition

- Trust problems- Cash & face2face

transactions - Take clients to Peer

friends- Make & meet new

contacts on travel- face2face, calls

- Husband support, especially with family fi nancial obligations

- Buy (foreign) artifacts for her

- Shop assistant- Travel arrangements- Calls, sms, email,

face2face

- Promoting saving- Providing affordable

fi nancing options- Creating a trust

environment

Associations/Groups

Clients

Authorities

Suppliers & Artists

Family & Friends

Financing Institutions

The business actors, their roles and mode of interaction

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The Local Economy

Sales and earnings:

Madame Rosie’s average weekly sales range from Euro 155.38 to Euro 184.62. Similar businesses in the market that are doing badly may make as low as Euro 76.92 monthly. Average sales in the market range from a single sale a day to single sale a week or a fortnight. The peak periods are during tourist visits in August, December and January.

The shop’s performance is currently 60% below its profi tability 10 years ago. Her average expenditure today will often exceed revenue. The shop’s main expenditures are on rent, electricity, salaries (self, assistant), customs, and local taxes. She pays for electricity, customs & taxes, supplies and the telephone bill. She keeps a ledger book with a list of sales at sale value and a list of inventory quantities. An entry made after every transaction and there are weekly reconciliations. The shop’s ledger book Attended to by both her and her assistant

Madame Rosie has taken the following measures to gain a competitive edge and to protect her work:

Quality:• She has stopped preordering and purchasing in absentia; she buys

what she has seen and examined• She only buying the best quality raw materials• She is creating her own products and thus reducing the

involvement of suppliers and resellers• She holds and reworks good artwork bought from other artists

Clients:• She used to hold an image portfolio but has found it misleading to

clients with time. She now presents whatever works she has and recommends her peers when she does not immediately have what

a client wants• She does not offer any credit facilities as most credit is

normally done orally and can result in unpleasant client relations.

• She has opted to present unique and diverse items

Suppliers:• No credit transactions• She deals with suppliers in person to ensure she gets what she

wants both on quality and quantity• She is seeking to be independent of suppliers and to buy

needed items whenever she travels and producing her own

Peers • She has taken up the practice of buying out a supplier’s entire

stock of materials she likes if she deems it necessary to avoid imitation

• She has withdrawn some of her works from the shop. This is mainly to amass a collection and protect the identity of her work in readiness for her exhibition.

Competition:

Within the local market competition for Madame Rosie’s shop is from local artists who works are based on imitation rather than creativity. The competitors also engage in habits like crowding and physically trying to pull away a client from another’s shop. There is a lack of professionalism and plenty of cheap imitations.

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In the illegal open-air Market, which is located at a high human traffi c area, there are no customs or local taxes paid and no rent. There is a fl ooding of cheap imitations.

Madame Rosie alse revealed that women entrepreneurs from Europe also come to Douala to learn about the crafts produced and then reproduce and/or create their own artwork based on what they have observed locally. They then export these back home or sell them to local European communities. They usually enjoy diplomatic relations and so they pay no customs or local taxes, even on imports. They usually import materials and superior tools and have recently opened shop near market for their products.

In addition, there are cheap wares reproduced and made in Asia which imitate local motifs and works. They use cheap materials and do mass production fl ooding the local market with these goods.

There are also online resellers who scout local markets and take images and videos and then put them online purporting to them to be their own work. They reeceive online orders, buy from the local market and resell the artifacts at a high price.

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Business practices:

The shop has been in operation for the last 11 years. Drive is mainly passion

• Needs are less fi nancial and more operational effi ciency and productivity

• Certain business processes have evolved/changed with experience.

• Initially used to preorder and close purchase deals with suppliers over the phone. There is a problem of trust and professionalism, both in manner and in knowledge, on the part of the supplier.

• Used Photo Shop at some point to create an image portfolio. Skills and/or learning curve in using the tool issues.

• Credit facilities mainy oral often resulting in misunderstandings, network loss and revenue loss.

• Trust issues affect business performance

• Financing does not necessarily mean loans and direct cash, social relationships can also create or mean funds.

• The microfi nance is creating trust circles and less formal relationships that can present a new angle to social networking.

• Art goes with identity. Providing and preserving creativity, uniqueness, expression and feel provides a competitive edge.

• It is not all work and no play, entertainment at work is welcomed. E.g. radio

• Micro-entrepreneurs, starting, growing or better established, differ in intensity, contact points and freedom of choice (presence & form of alternatives).

• Basic record keeping on physical ledger books, and interest in computerizing the process.

• Internet use by subject for information and willingness to trade

• Activites involve multitasking, mobility, transacting outside premises and work hours. Also time management and personal organizational challenges.

• No real separation of business use and personal use of available resources.

• Little specifi c long term planning. Periods may be as short as a day or week.

• Similarity of goods. Need to build and maintain necessary social networks.

• Travel=strength. Travel virtualization or sense rich interactive internet services?

• Global threats from incomers and measures are dependent on the government

• Trading in artifacts as a tourist economy. Foreign currency issues, language & culture

Communication Practices

• Voice usage is higher than SMS. They want information now and immediate feedback.

• The grapevine or word of mouth and referrals/testimonies sell (or break) the business and its commodities. Main form of promotion.

Mobile Phone Use

• Mobile use mainly to organize and schedule activities, alarms, calculations. Calls mainly to arrange or confi rm details and/or events

• Interesting uses of camera both positive (e.g. recording inspiring observations, portfolios) and negative (e.g. online resellers & replication of ideas).

• DRM issues as to default, mandatory or optional, in camera applications at point of capture and/or distribution?.

• Basic image processing functionalities • Network Operators as barriers in the use of mobile due to pricing.

Competitive pricing only signifi cant in Voice and SMS. Internet based services may suffer.

• Simplicity in use of technology.

• Greater sensitivity to pricing than to technology

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[1] Facts About Cameroon http://en.wikipedia.org/wiki/Cameroonhttp://en.wikipedia.org/wiki/Douala

References and Appendix

https://www.cia.gov/library/publications/the-world-factbook/geos/cm.html (last update 6th November 2008) http://news.bbc.co.uk/1/hi/world/africa/country_profi les/1042937.stmhttp://encarta.msn.com/fact_631504737/cameroon_facts_and_fi gures.html

At a glance:

- Social Support

- Payment- Social Support

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A Day in Kisumu Name: Gabriel Owino Age: 28Marital Status: Married with two children.

His wife stays home to look after the young children

Skills/training: High school Trade: ‘Boda boda’ operatorOther: Lives in Nyalenda area of

Kisumu – a low income informal settlement

Gabriel operates a motorcycle taxi commonly known as a ‘boda boda’ in the Western Kenya-Eastern Uganda region (the term boda-boda originated from the “border-border” – cross border bicycle taxis which used to ferry people and goods on the black market between the Kenyan and Ugandan borders). Gabriel’s taxi service operates within Kisumu City and its environs moving people and goods within the area. On average he covers 200-250 kilometres per week.

The motorcycle is Gabriel’s main business asset. He purchased the motorcycle on loan from a small bank and with his daily earnings slowly repays the loan taken for his motorcycle. The boda-boda’s were originally bicycles but are increasingly also motorcycles which are now widely available for purchase in the region.

Gabriel fi rst started work as a taxi cab driver, after which he took additional classes and earned a motorcycle driver’s licence. In the boda-boda business he started off as a squad (day hired) driver for 9 months before taking the loan to purchase his motorcycle which he has been repaying for about 2 months.

Location: On the eastern shore of Lake Victoria, Nyanza Province, Western Kenya

Climate: Moderate tropical, 17° to 29° Celsius round the year

Population: Kisumu district 565,000 and Kisumu city 375,000 (estimates)

Religion: Mainly Christian, with a signifi cant Muslim minority

Languages: English, Kiswahili and Dholuo, one of the languages in the Luo family. The main ethnic group in the area is Luo

Economic activity: Sugar, fi shery, agriculture, some tourism, large informal economy

Source: Kisumu Investment Guide 2007

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KisumuNokia Research Center

Kisumu

Kisumu, on the eastern shore of Lake Victoria, is Kenya’s third largest city, after Nairobi and Mombasa. It is the capital of Nyanza province and the administrative centre of Kisumu district. The population of Kisumu district was projected to be around 565,000 in 2007, with perhaps two-thirds of that (375,000) being the city population. The climate is warm and humid, moderated somewhat by the elevation of over 1,100 metres. The annual rainfall, during the long and short rains in March-June and October-December respectively, is 1,245 mm.

The modern city of Kisumu began life as Port Florence, the lakeside terminus of the Uganda Railway, which reached Kisumu (from Mombasa) in 1901. Further transport to Uganda was provided by ferry. The rail link with Mombasa on the Kenyan coast and the water transport links with Port Bell, Entebbe and Jinja in Uganda and with Bukoba and Mwanza in Tanzania were the foundation of Kisumu’s rise to prominence as an East African trading hub.

Economically, the good years in Kisumu were the same as in Kenya generally, the 60s and the 70s. Since then, the economy of the city has tended to stagnate. One explanation sometimes offered is trade liberalization, which is said to have damaged the traditional industries of cotton and sugar. Another is that the sugar industry in particular has been dominated by parastatals and has suffered from the usual problems of underinvestment and poor management that characterize the stateowned sector. This has been compounded by the neglect of infrastructure, both within the city and in its external links, thus raising production costs and reducing market access. A further diffi culty has been damage to the enormous natural resources epresented by Lake Victoria, through pollution, overfi shing and the growth of water hyacinth. Nonetheless, Kisumu is a vital city. The Municipal Council of Kisumu has recently outlined a development strategy that places investment and public-private partnership at its very centre. Kisumu is the headquarters of both the Lake Basin Development Authority (LBDA) of Kenya and the Lake Victoria Basin Commission (LVBC) of the East African Community.

A number of educational institutions are based in or near Kisumu. These include Maseno University, Kisumu Polytechnic, Tom Mboya Labour College and the Great Lakes University of Kisumu (formerly the Tropical Institute of Community Health and Development). Other related institutions are the Centre for Disease Control and the Kenya Medical Research Institute. The city also offers a well-regarded workforce, both skilled and unskilled.

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1000-1100 Between picking and dropping a few mid-morning customers, Gabriel will have his breakfast during the quiet mid morning period. This consists of tea and chapati sold by a regular vendor near the motorbike terminus.

1100-1400 Gabriel will try his luck to get fares within the town. He parks his motorbike at a communal (with the other boda boda operators) taxi stop and customers usually walk to pick the taxi services from there. He often engages in personal conversation with potential customers to convince them to use his motorcycle rather than the competitors’ or other means of transport.

1445 The motorcycle is Gabriel’s main business asset. He purchased the motorcycle on loan from a small bank and with his daily earnings slowly repays the loan taken for his motorcycle. He repays some money every day part of which goes towards repaying his loan while part goes towards saving for a bigger, more durable motorcycle.

1400 During the rainy season, it is common for frequent showers during the day. During these periods, the motorcycle and bicycle taxis lose customers to the minibuses and tuk-tuks since they are covered and offer protection from the rain. Gabriel usually takes shelter until the rain passes although he carries a raincoat for such occasions. Loyal customers still make calls to him even when it rains.

O600-0900: He leaves Nyalenda at 6:30AM ferrying a neighbour to work in town, after that he has a busy morning transporting residents to their various workplaces in the morning rush which lasts up to 9AM. His clients at this time are typically offi ce workers and business people from Nyalenda who know him and have become his clients on a regular basis - they usually fi nd him at his usual corner or give him a pick-up call.

Delivery of the product/ services to the clients

Gabriel’s main business is a motorcycle taxi service. He own his motorcycle and usually takes it it home with him at the end of the day. Beause his is a people transport service, his clients are found

wherever people may be found. When he wakes up in the morning, he begins by picking a close neighbour and dropping him at his place of work in town. From then on, he often gets customers from the various locations that he is in. When there are none, he returns to the customary taxi-stop in the town center and waits for customers from that location. Customers have become familiar with this stop and usually pick their taxis from there. There are about 100 - 120 motorcycles which are using this taxi stop although they have not applied for a

municipal licence and it is not recognized by the municipal authorities. In addition, his mobile phone makes him a sort of ‘taxi-on-demand’ service so that he is available at any time to whoever may reach him by phone.

He typically drives his motorcycle with his customers riding as passengers although in a peculiar business relationship, he allows selected (familiar to him) customers to drive his motorcycle to their destinations with him as a passenger. This enables the customers to enjoy using his service or for him to train young men who would like to operate motorcycle taxis in future. He however charges these passengers higher than average.

On occasion he will also use ‘squad drivers’ – friends known to him who will operate the taxi in cases where Gabriel is unwell, tired or busy with personal errands.

The Working Day

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1600 – 1800 As the rush hour begins, his regular customers will begin to call him again to arrange pick up locations for the journey home.

Trust is extremely critical in his business and he forms social relationships with each business client. He often knows where they live and drops them right at their doorstep.

1900 Gabriel returns to the taxi stop in town and transports regular and new clients until late. He avoids unfamiliar routes at late hours and rough and unkempt customers who in his experience have turned out to be either unwilling to pay the fare or have been thugs after his money, mobile phone or motorcycle.

1500: The cleanliness of the driver and motorbike are critical to attract customers (especially ladies who are the majority of his customers). So he takes time to clean and wash his motorbike especially after it has rained and before the evening rush. He washes his motorcycle at the lake or wherever he can get some water and a basin.

1830: Before proceeding with the evening/night shift, Gabriel stops by home to drop some of the day’s earnings to his wife for the evening meal. Because he has such a young family, it is important that there is some food and milk for the children.

2000-2100 : Gabriel winds down his day taking the few remaining customers to their various destinations.

He will fuel his motorbike with part of the day’s earnings. His fi rst client of the day is usually his last client, his neighbour who is a close friend.

The Social Value Chain

Trust is a critical asset in Gabriel’s business. When dealing with customers, it is of utmost importance to him to handle customers in a open and honest manner. This kind of treatment helps to ensure that he wins their favour and approval. Once this relationship is established, Gabriel works hard to maintain it. When using his mobile phone, he avoids exaggerating or lying to customers about his distance from a particular location, or the estimated time for him to arrive at the meeting point.

Loyalty is an important part of the taxi service operation - not only on the part of the taxi operator but also on the part of customers. It is expected that when Gabriel’s friends or relatives need to use a motorcycle taxi service, they will fi rst contact him before searching anywhere else or refer any potential customers to him.

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Gabriel states that his mobile phone is critically central to the daily success of his business. A day without his mobile phone is equal to a day without business and he compares it to a day ‘off’ from work. On such days Gabriel would rather give out his bike to a ’squad’ driver (loan for the day) who will return a certain cash target to him at the end of the day and keep the difference.

In business he mainly uses his mobile phone to receive and make calls to customers to arrange pick-up locations. If driven well customers usually request his telephone number and confi rm it so that s/he can call him again to become repeat clients in future. He uses Kshs 50/= (0.5 Euro) talk time on his mobile phone every 2-3 days. Gabriel usually saves customer names according to their physical or social peculiarities (e.g. weight, height, complexion, workplace, dress style – e.g. bling bling, face, etc).

Gabriel’s main use of the mobile phone is during the rush hours in the morning and in the evening. He has formed social relationships with most of his business clients who call him at any time to make appointments for his service. When he is ferrying new customers, he does in the best way he can so that the customers may request his contact. He has a growing database of customers in his mobile phone whom he saves with the suffi x -cus (meaning customer) and usually identies them by a physical feature or other peculiarity (e.g. dressing, workplace, home area, etc).

Based on the trust that he is able to build in his relationships, Gabriel also receives errands and chores to carry out during the day from regular customers. This includes: dropping children at home from school, delivering shopping or picking up visitors.

Gabriel’s current phone was a gift from a friend in London. His next phone would preferably be a dual sim phone from a reputable shop with a reliable warranty. One such phone that he has seen costs Kshs 7,500/= (75 Euros) but this fi gure is too costly for him. He states that he would be willing to pay Kshs 4,500/= (45 Euros) for such a phone.

He has a mobile line on the Safaricom MSP as more customers are on this network although he keeps a Zain MSP line as well. He keeps both sim cards nearby for easy switching of lines. He buys airtime from nearby vendors commonly in denominations of Kshs 20-50/= (0.2 – 0.5 Euros) according to his fi nancial ability which lasts 2-3 days.

He owns a Samsung E900.

The features he mostly uses on his mobile phone are:

• Making and receiving calls - frequent

• Mobile money transfer to and from family members on occasion

• He would like a mobile phone with internet browsing capability

• Radio

• Games, at slow times while he is waiting for customers

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Networks

Business Networks:

Gabriel’s typical business networks are the regular clients who contact him by phone and the customers that he meets on the street.

Squad drivers: A unique type of business relationship is one where he has friends that he may lend out his motorcycle to operate. These friends are known as ‘squad drivers’ and will operate the taxi in cases where Gabriel is unwell, tired or busy with personal errands. To these drivers he usually gives a daily cash target that they should remit to him for operating his motorcycle while he keeps the difference. Gabriel himself started out as a squad driver on behalf of someone else before buying his current motorcycle.

Bank: Gabriel bought his motorcycle on loan at Kshs 65,000/= (650 Euros) although he would like to buy a bigger, more durable motorbike costing Kshs 88,000/= (880 Euros). He has set himself a daily target of Kshs 700/= (7 Euros) out of which he daily allocates Kshs 300/= (3 Euros) to the bank.

Business partner: To obtain the loan for the motorcycle, he received a cash deposit from a local bishop to whom he has to pay back in instalments every week in repayments.

Mechanic: Other business contacts are the motorcycle mechanic whom he visits every week for an oil change (every 200-250 Kms).

Social Networks:

Regular customers: Because the motorcycle taxi is a face-to-face business, the majority of his customers (all the regular customers) are within his social network.

He therefore maintains a fairly close interaction with them.

Family: In running his business, Gabriel receives help from his family and friends. His family helps him in cleaning and washing of the bicycle especially when it rains. They also support him with money for repairs for the motorbike when he is low on cash. His friends and family most frequently support him by referring customers to him through his mobile phone.

Gabriel’s business is highly interwoven into a social network – primarily social relationships are the foundation of his main business network. These social relationships with customers enables him gain trust which is the key asset of his business.

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The Local Economy

Other businesses:

Boda-bodas are one amongst several means of public transport in Kisumu – there are bicycle boda-bodas, motorcycle boda-bodas (piki-pikis), three wheeled motocycle taxis (tuk-tuks), car taxis, and shared minibus taxis (matatus). At his taxi stop alone, Gabriel states that there are around 100 - 120 other motorcycle taxi operators who use the taxi stop as a base. He estimates that there are about 20 other such ‘bases’ for motorcycles in the town. All the other groups of transport also have similar bases around the town which are know by customers who pick and choose according to their particular needs, destination, weather or fi nancial ability. In total the overall number of public transport taxis is several thousand, the Kisumu boda boda association re ports over 20,000 boda bodas operating in Kisumu.

There are several markets and market areas in Kisumu which provide an opportunity for thousands of informal entrepreneurs to operate in Kisumu in artisanry and crafts, food prereparation and selling, carpentry, fruit and vegetable vending, hawking of shoes and clothing items, etc. Less than 30% of the employed are in the formal sector and the average incomes for those in the informal sector range between Kshs 3,000 and 4,000 per month (30 – 40 Euros)*.

Sales and earnings:

Gabriel sets himself a minimum of Kshs 700/= (7 Euros) for every working day which is what he requires to meet his daily requirements. From this he allocates: Food – Kshs 100/= (1 Euro) Motorcycle maintenance (fuel) – Kshs 150-300/= (1.5 – 3 Euros) Loan repayment – Kshs 300/= (3 Euros) In addition he repays an amount of Kshs 2,100/= every week to an angel investor – a local bishop who fi nanced the deposit for his motorcycle.

The busiest days of the week are Thursday to Sunday. Monday to Wednesday are fairly busy days while public holidays are the worst days for business. The fi rst weekend of every month is booming for business.For bicycle operators the average daily earnings are Kshs 400/= (4 Euros) while for a tuk tuk the average earnings per day are 2,000/= (20 Euros). The tuk tuks (and most motorcycles) are commonly owned by wealthier entrepreneurs who buy the taxis and hire drivers to operate them to meet set daily cash targets and to keep the difference.

Infrastructure and services:

Most of Nyalenda, where Gabriel lives, is characterised by a relatively lower density of housing development. Typical housing is of the rooming type, including a courtyard with shared facilities. The area can be characterised as a rural settlement caught up in urban expansion. Domestic water is available through piped water and wells and is commonly bought at Kshs 20/= (0.2 Euros) per 20 litre container. Electricity that is illegally pulled from nearby lines is available to the

* UN Habitat. (2005). Situation Analysis of Informal Settlements in Kisumu

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houses at Kshs 500/= (5 Euros) per month for a single bulb. Gabriel uses an electricity connection from his neighnour’s house to charge his phone. There are no government health services in Nyalenda and HIV/AIDS is rampant. Solid waste disposal is also a major problem as the Municipal services do not cover the area and social facilities like schools, social halls and markets are inadequate (UN Habitat, 2005).

The nearby town and markets offer relatively easy access to supporting services e.g. banking, health and markets/shopping.

Crime is a problem that most boda boda operators have to contend with as they become easy targets for thugs in deserted locations. In instances of robbery, they usually lose any money that they have and their mobile phones. Incidents of motorcycle jacking have been curbed by random checks from the police.

Police harassment is however one area of business losses where the public transport operators have to pay bribes not having licence plates, insurance or helmets. Even in cases where they have fulfi lled all legal requirements they often have to pay a small sum of Kshs 50/= (0.5 Euros) per day to avoid being continually harassed or detained by the police.

The cost of fuel is a key factor that affects their business as customers are highly sensitive to fares hikes. Competition:

Competition amongst the boda boda operators is high. Other operators typically try to dissuade customers from riding with others by casting false allegations on them (e.g. about how they dropped a past customer or on the poor condition of their motocycle).

• Bicycles – these are cheaper and are popular towards the end of the month when money is tight• Tuk-tuks – These have an advantage when it rains because they are covered and can carry more people at

a time so they are better for groups

Competition is fi erce and every man fends for himself to attract and get customers. Groups of the taxi operators sometimes physically clash with each other e.g. tuk tuk drivers against motocycle drivers or motorcycle drivers against bicycle riders.

Because of the high mobility within the taxi industry and the strain on relationships due to competition, it has not been easy for business associations to survive. Most taxi operators are not willing to trust eash other to maintain the ties to such associations.

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Business practices:

Majority of the small taxi operators do not keep business records as they fi nd sums they deal with at the end of the day are small and simple enough to calculate on paper. The profi t generated is almost all spent on immediate susbsistence needs because of the high cost of basic goods.

Security is a major concern especially at late hours from thugs and pickpockets. This causes most boda boda operators to prefer lower cost phones to minimize losses in case of theft. One one of the boda boda operators interviewed had owned 14 phones in the last 12 months because of theft and loss. In case of phone theft or loss, the most important concern to them is their accessibility to customers. Additionally, if much money is collected during the day it is usually dropped off at a safe location befoe continuing with business.

Communication patterns: Because he deals directly with people, he relies on establishing open and honest communication to win the trust of customers so that they may become repeat customers reaching him mainy through his mobile phone. Most boda boda operators in Kisumu reported loyalty from customers even when cheaper and more immediate taxis were available.Comm

At late hours most of the operators prefer silent or discreet profi les on their mobile phones to avoid causing too much attention to themselves in case of a phonecall.

His mobile phone enables him to be more than a taxi to customers – after winning their trust he runs personal and domestic errands on behalf of most of his clients as an extra service. This is usually in the off-peak hours between 9AM and 4PM. His peak hours are 6AM – 9AM and 4PM – 9PM.

Uses of the Mobile Phone in Business:

Gabriel’s mobile phone is a major asset for his business. Majority of his customers use this as the primary means to contact him to arrange meetings and pick-up locations. His primary use of the mobile phone is for making and receiving calls for business

Because of the high use and importance of mobile phones in the business, most operators take care to conserve battery life by minimizing use of ‘unecessary’ features.

Conclusions:

Gabriel is a new but well settled entrepreneur in his fi eld of work.

His major need from a mobile phone is clear and reliable communication at affordable cost. This is usually affected by the different tariffs on two main MSPs thus creating the need for a dual sim device.

In addition to the above, cost, reliability and battery life are key determining factors in the selection of a phone.

The calculator function is not frequently used because of the small sums that are dealt with in the business but a helpful feature is the calendar (scheduling, clock/time, alarm and reminder). Mobile money transfers are also used but only on occasion. A service including time planning and management would be relevant and useful.

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At a glance:

Illustration of Delivery of service to clients

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A Day in Mombasa Name: Grace Achieng Njoroge Age: 31Marital Status: Married with 2 children – a

girl aged 11 yrs and a little boy aged 2.5 yrs

Skills/training: Beauty Training course, Hairdressing course – has been working as hairdresser for 8yrs.

Trade: HairdresserOther: Her husband works as a clerk

at the municipal council offi ces in Mombasa

Grace is an owner of a small salon – Neema Salon located in the Buxton estate of Tononoka township of Mombasa town. She lives about 2 kms from her salon and she normally walks to work. Her 2 assistants however take matatus to work since they live further off.

In addition to hairdressing, Grace also sells handbags, sandals and clothes to her salon clientelle, in order to supplement the income of her business. She has been a business owner for 2 years now.

Prior to starting her business she was employed as a hair dresser in different establishments both in Mombasa and in Nairobi for six years. Her husband loaned her the start up capital of Kshs. 24,000 (240 Euros) which she used to rent the place, set it up and buy the intial hair dressing equipment.

Mombasa is the second largest city in Kenya, lying on the Indian Ocean.

Mombasa has a warm, tropical climateThe city is the centre of the coastal tourism industry.

It is a major trade centre and home to Kenya’s only large seaport, the Kilindini harbour

Has a major international airport.

The city has a population of 707,400

The main town is largely occupied by the Muslim Mijikenda/Swahili

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MombasaNokia Research Center

Mombasa

Mombasa city is a coastal island with some of the best beaches in the world. Located on Kenya’s Eastern coastline bordering the Indian Ocean, Mombasa has become popular for its exotic beaches, diverse marine life, world-class hotels and friendly people [1,2]. In addition to its beautiful beaches, Mombasa offers a diverse cultural history. The City traces many of its cultural traditions to former Portuguese, Arab and British settlers – all of which have left a lasting infl uence on the City’s food, architecture, and people [2].

Geography and Demographics: The town of Mombasa is centered on Mombasa Island, but extends to the mainland. The island is separated from the mainland by two creeks, Port Reitz in south and Tudor Creek in north. The city has a population of 707,400 and the main town is largely occupied by the Muslim Mijikenda/Swahili people. The Mombasa Island has 5 major town areas and extends to seven other townships inland. Townships are classifi ed as high income, middle income and low income townships. Buxton in Tononoka area can be classifi ed as a lower middle income area and this is where Neema Salon is located [1].

Culture: Mombasa today is a hotpot of cultures with people from all over the world calling Mombasa home. Being one of the main gateways of the East Coast of Africa, it has had poeple coming through it from all wakes of life, each leaving some part of their heritage and culture behind. The arab/muslim infl uence is prevalent in the architecure, narrow streets, markets etc while the Indian culture is also very obvious with mosques and temples all over the island some dating back 200 years when the fi rst of the Indian communities migrated into east coast of Africa [3].

Weather: Mombasa is located in a tropical zone close to the equator, causing its weather to vary very little over the course of the year. The average temperature in Mombasa all year long is around 27 degrees C, with the average number of daylight hours also staying the same at around 8 hours per day. Mombasa’s average amount of precipitation does vary throughout the year however, with April and May topping out as the city’s rainiest months [4].

Economic activites: Mombasa is a place steeped in history, yet at the same time fascinating commercial and cosmopolitan port town. Mombasa is an island connected to the mainland by bridges and ferries. The town over looks a wide harbor, where commercial shipping mingles with traditional sailing dhows.

The true heart of Mombasa is found in the exotic old town, among the narrow winding streets and Arab architecture. The air here is always heavy with the scent of spices. Women wearing the traditional bui bui fi ll the narrow streets and busy markets. At the dhow docks fresh fi sh and goods from all along the coast arrive daily [5].

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1200: This client had her hair done by Grace the previous day and is back to look at some of the items of clothing on sale at Neema salon.

0800: A typical day starts at 5:30am. She fi rst tends to her family and usually arrives at the salon by 8:00 am. She supervises her assistants as they clean up the salon. Absolutely no day is similar to another. The dynamic movement of clients determines how each day may run. Grace does not rely much on walk-ins.

1000: Grace’s client is out of the drier and Grace now styles her hair as the last step before the customer leaves. Observe the process as the client looks at the ongoing activity on the mirror.

0900: Grace is now fi xing rollers on her client’s hair as she gets her ready for the drier. Akinyi is still braiding her client’s hair. The second assistant is not in as she is taking her day off on this particular day.

1100: Grace and Akinyi take a breather in between customers.

Economic Value chain

• On Mondays, Grace goes to town to purchase stock for Neema salon. She has already established a relationship with some Arab distributors in downtown Mombasa town. She is able to get most of her stock at these distributors at discounted prices. This includes hair oils, relaxers, conditioners e.t.c.

• She however buys part of her stock from A-ONE supermarket which is reasonably priced and is cheaper than the distributors on some items like shampoos. Often too, she buys products from itinerant hawkers if they have quality products e.g. hair braids and weaves.

• With airtime, there is a young trader who comes selling card at wholesale prices. She normally purchases some depending on the demand.

• For the bags, sandals and clothes Grace buys them from another distributor, and she only restocks on demand or when there is an order. Grace hopes to grow her business suffi ciently and make it so profi table so as to be able to buy directly from manufacturers.

• Grace is trained both in beauty and hairdressing and has 8 yrs working experience. As such, she is able to offer the wide range of services to her customers. She would like to do more but her space is too small and restricts just how much she can offer. Not all her customers come with their own relaxers, treatments or braids, so she stocks these products of which she sells to them.

• In addition to hair and beauty treatments, Grace also sells handbags, sandals, fabric, clothes and nail polish to supplement her income and enable her to pay her rent. She observed that women like to shop and having those items at the very same place they did their hair is a value added service

The Working Day

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1400: Having concluded the KWFT business, the group is now collecting the ‘merry-go-round’ amount, as they prepare for the next meeting. Shortly after the meeting concludes and we leave back for the salon.

1600: An intenerant trader hawking weaves and hair braids stops at Neema salon to sell some of his wares. Grace and Akinyi look over the products as they select the best ones for their customers

1300: Grace is a member of a women’s group that has come together (18 of them) to get micro-entreprenuer loans from KWFT (Kenya Women’s Finance Trust). KWFT does not give loans to individuals who are not part of a group. The group works as the guarantor for the loans given in case a member defaults on a loan repayment. The group meets twice a month

1500: We arrive back and fi nd Akinyi has cleaned up the salon and washed up the towels. They are out in the sun drying. Grace takes time to get a short brief from Akinyi about the business and the happenings that occurred during her absence.

1300: Akinyi works on a client’s hair as the day draws to a close. Grace and Akinyi will continue working till 6.00 pm, and then close. They however do not turn away clients if they come late. They will still take them up though it means closing up later than normal.

Social Value chain

• Grace keeps a diary (notebook) where she notes clients’ appointments. Most of her business is conducted on phone and according to her, her business would collapse without it. A while back, her phone got stolen and she lost several clients on account of it. She hardly relies on walk-ins or people who are strolling looking for a hair salon.

• According to her, any salon business relying on this method of getting customers is bound to fail. Hairdressing is about forging relationships. If your service is good, you have clean premises and are friendly; clients will form a bond of loyalty and will hardly go anywhere else. These happy clients will also refer your salon to their friends and as a result, few people ‘risk’ having their hair done by ‘just anyone’. Her friends from church, the neighbourhood

and her women’s group often work as her referral points and have been a source of many of her new customers

• Because of this kind of movement, her customers always call to check her availability before coming over. New customers get her number from those referring them and this chain continues growing. With new customers, she is easily able to direct them to her salon on phone.

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Grace owns an entry level Nokia phone which she has had for two years and according to her, it is the life-line of her business. She had a similar phone 2 years ago but it was stolen.

She bought the same type of phone because it is durable, does not get damaged when it falls down and has served her needs and purposes suffi ciently since she started using mobile phones.

Grace is subscribed to the Safaricom MSP. She prefers it because she thinks it is more popular with subscribers. Additionally, she believes she would be inaccessible to her customers if she subscribed to another MSP due to the high cost of calling other networks from a safacom line – which would mean loss of business for her.

Grace uses Euro 2 worth of airtime in around 3 days. She attributes her low expenditure to the fact that it is mostly her clients who call her, and not often the other way round.

The phone cost her Euro 25 and she uses to make calls, calculate income and expenditure using the calculator feature, text and remind herself of important appointments using the alarm feature.

Grace uses her phone to manage her business when she travels by keeping tabs with her assistants.

The most important use of her phone is that it is the channel through which her clients use to make hairdressing appointments. Without a phone, it would be nearly impossible for her to get and or manage client fl ow.

Additionally, Grace uses her phone to make orders for stocks for the salone - they include bags, shoes and clothes among others

She is happy with her phone right now and can hardly think of what more she could do to better it, except perhaps to enable her manage her customers better.

She intends to buy a phone in the future to replace the one she has now which she considers old. She hopes to leave this old phone at home so as to be able to keep in touch with those at home

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Networks

Grace purchases most of her hair and beauty from Arab distributors because she has formed strong business relationships and she is able to get discounts from them

She however purchases some products from hawkers if they have quality products and because they often extend credit facility to her

Every once a year, Grace has to make payments to the local municipal council in order to renew her business license.

Some products are however cheaper when purchased from the supermarket, so even with the discount facility, Grace will also often buy some products from the supermarket.

Grace also sells airtime which she purchases from an itinerant trader

Currently, Grace is creating relationships with some distributors, where she is buying bags, shoes and clothes as she tries to enhance her sources of income

Her husband provided the startup capital and continues to fi nancially support her until she breaks even. He assists her also in maintaining her council licences up to date.

Her sister sometimes steps into oversee her business if she travels for a period of time that is rather long. Otherwise, her two salon assistants oversee the business as well as take care of all the the clients.

She belongs to a women’s group that has come together to be able to micro-fi nancing from Kenya Women’s Finance Trust (KWFT). They also run a separate merry-go-round where they contribute money bi-monthly and divide it between two members on a rotational basis.

Most of her clients do business with her on mobile phone and use it to book appointments with her. Her friends, including those from the ‘chama’ also act as references to new and potencial clients. They often give her number to potential clients to book appointments with her



Email

Phonecall

SMS

Face to Face

Grace operates her salon in a manageable social and business network.

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The Local Economy

Other businesses:

There are fi ve salons in the same neighbourhood where Grace has set up Neema Salon. Besides her business, there are a string of other small business owners including M-Pesa traders, boutiques, tea rooms, tailors, hawkers, among others.

There are four other salons in her neighbourhood who are her main competitors

Grace has the largest fl ow of clients on any day and she attributes this to her good services, clean premises and the fact that she is very friendly. Surprisingly, her products and services are charged a little higher that the rest of the salons, yet she still manages to get the most clients.

A while back, Grace used to run an Adtel simu-ya-jamii service (community pay phone) but the proceeds from it have gone down, so she hardly offers it as a service, though she still has the pay-phone installed at the salon. Occasionally however, she gets a customer or sells airtime to them. She attributes the slow-down of this business to the fact that airtime is easier to get in smaller amounts and handsets have also become cheap.

While she keeps good records on her average sales per week, since some of her purchases are random book-keeping on expenses is more random

Sales and Earnings

Expenses

• On a weekly basis, Grace spends Euros 30 on purchase of hair products and on purchase of water to use at the hair salon

• Additional monthly expenses include rent of Euro 80s, salaries for her two assistants at Euros 50 a month each, totaling to Euros 100

and Euros 20 for electricity• Grace also has an annual cost of municipal council business fee

of Euros 80

Products and services prices

Her price range for some of the services she offers are as follows• TCB own product – Euros 2.5• TCB Salon product – Euros 4.5• Blowdry – Euro cents 5• Wash and blowdry – Euros 1.5• Braiding lines – a range of Euro cents 5 – Euros 2.5• Manicure – Euros 2.5• Pedicure - Euros 3.5• Bags – Euros 15 – Euros 20

Average sales in a week upside – Euros 200, downside Euros 100Monthly sales between Euros 400 – Euros 500

Value chain

Distributors and supermarkerts, buy hair and beauty products from manufactures and stock them targeting retailers like small shops, business owners like Grace or hawkers such as those who come to sell products at Grace’s salon. Grace may retail these products in her salon e.g. hair attachments, nail polish etc, or use them in course of her work e.g use TCB relaxer to relax the hair of a client, use shampoo to wash their hair. Grace factors in the price of the product she has purchased, to appropriately price her products and services as indicated below.

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Notes on the delivery chain

• Most small traders buy their beauty and hairdressing products mostly from Arab distributors. Their prices are thought to be lower and once a relationship is formed, they offer good discounts.

• Some products are also purchased fom supermarkets e.g. shampoo, who seem to have competitive prices over the distributors on them.

• Most salon owners though (like Grace) also frequently purchase products from itinerant traders if they are deemed to be well priced, of good quality and if the trader extends credit facility. While the price might not be cheaper than a distributor, the credit facility and the fact that the salon owner does not have to take a matatu to town to purchase the same prices, gives market to these hawkers.

• Clients often buy products from salons e.g. weaves, braids, hair oils, hair sprays et.c. If they do not have the product they need for relaxing or treating their hair, they also purchase the same from the salon.

• If a salon’s purchases were large enough, it would be better to buy directly from the manufacturer. This is what Grace hopes to be able to do in the future. She intends to be a big buyer so that she can establish herself as a distributor to the other local hair salons in the neighbourhood.

Infrastructure available to the entrepreneur

Grace buys water for her salon but pays electricity as part of the entire block of shops. It becomes a problem since they have to share the cost of electricity amongst all the shops rented out by the same landlord

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Business practices:

Grace is still being fi nancially supported by her husband. Despite her seemingly reasonable income (roughly Euros 400 – Euros 500), her expenses are high. She has not been able to break-even in the two years she has been in business, largely because she has been spending much to establish her business.

It’s instructive to note that Grace has not paid herself a salary, something that she does not plan to do until her business runs into profi ts.

This would not be possible for her to do without the continual support of her husband. Clearly, there exists a strong support system between the two, which is critical in helping her turn her small business into a profi t making entity.

While Grace is not paying herself a salary, she is paying her assistants a gross of Euros 100 every month, indicating she recognizes the value of retaining good employees by motivating them through remuneration.

Grace shows her adeptness at miniprenuership – she has added handbags, clothes, shoes and other similar accessories that are often shopped by women at her salon, to capture that market and increase her income.

Grace also demonstrates foresight and foreplanning. By joining KWFT, she stands a chance of getting a loan in the future to boost her business. Loans are hard to get for many miniprenuers and this shows lots of determination to grow despite the odds.

There seems to exist some level of trust between Grace and her assistants because unless she is making a very long trip, she hardly leaves a third party in charge of the salon, but trusts that the girls will run the business effectively and profi tably without robbing her.

There is a huge potential for growth, but high rents, suitability of location and expansion logistics seem to be hindering the growth of Neema salon.

Uses of the Mobile Phone in Business:

The use of mobile phone has changed the whole approach to hairdressing. It is central to the running of her business, since hairdressing has changed to an appointment based approached. It has also changed how Grace as a miniprenuer does her book keeping and managing of appointments, since she how heavily relies on the calculator and alarm features respectively, inorder to keep her days organized and effi cient.

1. http://en.wikipedia.org/wiki/Mombasa#Townships.2FAreas

2. http://www.mombasainfo.com/

3. http://www.tripadvisor.com/Travel-g294210-s202/Mombasa:Kenya:Culture.html

4. http://www.tripadvisor.com/Travel-g294210-s208/Mombasa:Kenya:Weather.And.When.To.Go.html

5. http://ihs-198.magicalkenya.com/index.php?option=com_content&task=view&id=49&Itemid=61

References

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A Day in Nakuru Name: Beatrice ChepkemoiAge: 28Marital Status: Married with 2 sonsSkills/training: High school. Trade: Fruits and Vegetables VendorOther: Beatrice’s husband, Benson – 31, is

self-employed and is also a vendor in the same vicinity selling soft drinks and snacks.

Beatrice has been in the business of selling fruits and vegetables for the last 3 months. She mainly sells a variety of fruits such as bananas, oranges, water melon, pineapple, pawpaw, mango, avocado, passionfruit, and passion-banana. She also sells a few vegetables such as pumpkin, cabbage, kales, spinach, onions, tomatoes, and potatoes although in smaller quantities as compared to fruits.

Before venturing into this business she used to make and sell liquid soap which is used as detergent for laundry, washing fl oors, toilets, etc. She would purchase the chemicals, make the soap at home then sell door to door and in time also established some regular business whereby customers would place orders in advance and she would deliver the soap to them. This business was quite tough because of the legwork involved and also stiff competition to the extent that some customers had even learnt to make the soap for themselves and were no longer interested in buying. It was then that she thought of starting up a fruits and vegetable business her reasoning being that food is a basic need and even when fi nances are low most people maintain food as the top most priority and hence will still spend on it. Beatrice sells her fruits and vegetables from a handcart which she purchased specifi cally for this business 3 months ago. She prefers selling from a handcart because it is much easier for her to handle the produce in terms of display, storage and transportation. Positioned at a cross road, she captures many passers-by to and from work since this is near a residential area. The passers-by are who she considers to be her main customers.

Nakuru is the provincial capital of Kenya’s Rift Valley Province with a population of about 300,000 people.

It is currently the fourth largest urban centre in Kenya after Nairobi, Mombasa and Kisumu.

Nakuru Town is also the Capital of Nakuru District. It lies at the foot of Menengai Crater (an extinct volcano: 2490m high, with a crater 483m deep) and is sandwiched between the crater and Lake Nakuru (a fresh water lake famous for its millions of beautiful fl amingos). Nakuru was established by the British as part of the White highlands during the colonial era and it has continued growing into a cosmopolitan town.

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NakuruNokia Research Center

Nakuru

Geography: Nakuru is located in the midst of a concentration of geographical features together constituting the Lake Nakuru catchment basin. These include the Menengai Crater to the north, the Bahati Highlands to the northeast, the Eburu Hills and Lake Nakuru to the south and the Mau Escarpment to the southwest.

Due to its location on the fl oor of the Rift Valley with its volcanic soils, during the dry season Nakuru is engulfed with whirlwinds of dust, giving the town its name (nakuru means ‘a place of winds’ in the Maasai language).

Political / Administrative: Nakuru Town is governed by the Nakuru Municipality which is the local authority. The town is also an important administrative centre. Being the capital of Kenya’s most populous district - Nakuru District, with a population of 1.2 million in 1999 - and the country’s largest province - Rift Valley Province, with a 1999 population of 7 million (Kenya 2000) - the town houses a wide range of offi ces offering many people employment in the administrative sector.

Economy: The major economic sectors of Nakuru are commerce, industry, tourism, agriculture and tertiairy services. Commercial activities are concentrated in the original Central Business District (CBD) and along various strips and in several smaller nodes. Informal commercial activities have become an increasingly common feature in the town. Small-scale business and hawking activities are concentrated at major transport termini and on the reserves of busy internal roads (MCN 1999).

Nakuru is called the ‘farmers capital’ of Kenya and is famous for its agro-based industries. There are over 100 agro-industrial establishments ranging from food processing to farm machinery assembly (MCN 1999). These industries mainly serve the rich agricultural hinterland. The main industrial zone is located west of the CBD. More recently, a second industrial zone has developed in the east, attracting all kinds of related urban development activities there.

There are several tourist attractions in and around the town. Of these, Lake Nakuru National Park with millions of fl amingoes is by far the most important one, attracting visitors from all over the world.

References:http://www.cityfarmer.org/nakuru.html | http://en.wikipedia.org/wiki/Nakuru | http://en.wikipedia.org/wiki/Nakuru_District

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Description of the movement of goods to market/delivery of services to clients

Farmers sell fresh produce (fruits and vegetables) to brokers who deliver in large trucks to the main market in town where they sell to the wholesalers. Some wholesalers make the trip to the farms on their own and deliver to their stall at the market. A market entry fee is charged of 1500/- for every lorry or truck to gain access into the market. Wholesalers sell to retailers like Beatrice but also to individual consumers who come to the market. There is some price differentiation however depending on type of customer and relationships established. Retailers purchase produce and organize for delivery to their business places through delivery agents based at the market. Retailers also supply orders to insitutions such as schools and hotels; in Beatrice case she serves 3 schools in the vicinity of her business place. The insitutions place orders by phone and produce is delivered to them by the retailer. Other customers come by the retailers stand and purchase for immediate consumption or it is packed for them and they carry it home.

0745: First stop at market to purchase vegetables to fi ll the order for St. Mary’s School that she received while on her way to the market. Makes contact with delivery agent shortly after to deliver the order so she continues to shop

0820: Beatrice has completed all her market shopping; she now goes and purchases polythene bags for her business partner and her husband. She calls her partner to confi rm whether she should make the purchase. At 8:30 starts to walk back to her business place (15-20 min)

0910 : She starts setting up her stand which is fi nished with a little help from the delivery agent. Her business partner arrives after about 20 minutes and proceeds to help with the setting up.

0800: Purchases bananas from a fi xed wholesaler. Despite him not having ripe bananas she agrees to purchase the semi-ripe ones since she still has some ripe ones in stock. Shops systematically for fruits and vegetables from one fi xed vendor to another.

0905: She prepares a receipt for St. Mary’s School as she also manns her husband’s stand – he has gone to collect her handcart The delivery agent has also arrived and awaiting instructions

The Working Day

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0940: Her niece brings her breakfast because she left early in the day for market and could not have breakfast.

1030: Beatrice purchases tomatoes from a nearby vendor across the road, since she purchases in small quantity. She would prefer to purchase tomatoes from the market, only if she were purchasing in larger quantities but for now she has few tomato customers.

0930: Her business partner serving the fi rst customer as Beatrice continues setting up the stand

0950: She has to protect herself and the vegetables and fruits when it is raining. It rains frequently during this time of the year and it is not good for her business.After washing the mangoes she does some quick math on the ground with her fi nger working out what profi t she will make if she sells all the mangoes

1100: Her customers begin to call her to place their orders. She takes the orders and plans to purchase and deliver the fruits accordingly the next day. She maintains a log of their orders on a paper fi rst and then records it on her phone’s to-do list later.

There are also about 8 schools in the vicinity namely Kenyatta Primary, Kenyatta Secondary, St. Joseph’s, St. Mary’s, Lake Lawrenzo Academy, Lake Nakuru Secondary, Afraha High School and Langa Langa Secondary. These also provide a secondary source of customers for Beatrice as she has established a relationship with three of the schools (St. Mary’s, Kenyatta Primary, and St. Joseph’s) whereby she delivers fresh produce on a regular basis. The individual students and teachers also buy as they pass by; the latter also sometimes call her and ask her to deliver to them at school. Whenever there are local functions or activities at the Stadium e.g. sporting events, crusades, concerts, etc, Beatrice also benefi ts as sales at this time

are quite high. From observation, the business location is also good because there are other small business people (other than her husband) in the vicinity who also purchase from her – e.g. there is a vendor roasting maize, a DVD and CD Vendor for music and movies, the driving school instructors who use the fi eld next to the Afraha stadium for instruction, and there are many boda boda and tuk tuk operators transporting people and goods up and down all day. Also, the Lake Nakuru National Park is 1 Km away from her business location and people on tour may stop by to buy some fruits.

Beatrice shares her business spot with a friend (Eunice) who also sells certain

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1500: This is the beginning of the peak time for her business. Most of her customers are passersby and school children at this point of time.

1240: She packs the fruits and wraps them in polythene bag, then in newspaper, and then goes off in the rain to deliver to the customer. This is an order from a teacher at the adjacent school in the background who had called earlier to place the order.

1700 : Most of her business friends (maize sellers etc.) come sit and chat with her at this time of the day. These are also peak hours of her business when most people are going home from school or from work. She closes at 1830.

1300: She entertains herself by solving crosswords, sudoku in the newspaper though there is very little time for this as she has to cover fruit everytime it rains. When it rains heavily an hour later she takes shelter at her husband’s stand. They wrap their cell phones in polythene bags to protect them.

1600: Passersby stop in their vehicles to purchase. These are regular customers who are mostly returning to home from work.

vegetables like arrowroots and sweetpotatoes. Eunice also sells charcoal. Beatrice decided to share the spot so as to split the monthly municipal fees though without the knowledge of the municipal. She also notes that although there is some competition, it is not very stiff – there are about 4 fruit vendors further up the road and later in the evening some vegetable vendors come and set up their wares down the road (usually about 15 vendors).

Beatrice works Monday through to Saturday. Her rest day is Sunday which she spends by going to church, doing laundry for the whole week and basically spending time with the children at home.

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The Mobile Phone in BusinessBeatrice owns a Samsung phone which she acquired in 2002, purchased for her by her brother. Her usage of the phone is largely for business as opposed to social use. Business usage in a nutshell involves receiving calls from customers placing orders, use of calculator to work out budgets, expenses, selling prices, profi ts, etc especially when it is diffi cult to do mentally, saving reminders for orders on the phone calendar, updating list of debtors using the ‘to do list’ on the phone, sending text messages to debtors, calling her suppliers at the market to place her orders, sending and receiving money to suppliers and from customers respectively via M-Pesa which is a money transfer service offered by Safaricom (Kenya’s leading MSP).

She prefers voice calls as opposed to SMS because it is more credible and an agreement or response can be obtained immediately. Charges are also low.

She spends about 50/- per day on airtime which she purchases from her husband’s stand. Beatrice subscribes to Safaricom because it has the most subscribers and in terms of cross network charges, it is the cheapest for people to call her.

All in all her phone has had a positive impact on her business; a lot of business opportunities are enabled and enhanced by use of the mobile phone. She likes her phone and does not see any drawback in the phone for business and the particular model and brand she has. However she desires to one day own a more modern phone e.g. one with camera, with radio so she can listen while at work, with computer features and internet enabled. She does not have a direct or clear explanation as to whether and how a more modern phone would impact her business.

Receiving calls from customers who wants to place orders

Calls a teacher at a nearby school to fi nd out whether she can deliver to her some fruit or fruit salad

Calls husband to check whether agent has delivered the order which husband should then take to the school (Calls husband later to confi rm school delivery)

Noting down an order with pen and paper; Kenyatta primary needs some fruits for Thursday

Using the phone calculator to check expenditure so far and whether can pay a debt for pineapples and buy more

Updating her to do list in her phone with names of debtors and amounts owed to her

Calls business partner to confi rm whether she should purchase packing bags on her behalf

Sending text messages to some of her debtors to remind them she will be calling on them tomorrow for pay

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Networks

The following sociogram illustrates Beatrice’s business relations, social relations / networks and lines of communication. The minipreneur in the center is surrounded by various people who have a business connection to her, a social connection or both. The broken lines represent social connections and the bold lines business connections.

• Use of fi xed wholesale suppliers or vendors at the market

• Benefi ts – credit facility extended, offer better discounts or best price, enables advance booking of produce through mobile phone, can establish trust since after purchase leaves the product with vendor awaiting collection by delivery agent.

• May purchase from other vendors if usual suppliers have no stock or no suitable stock and therefore allow her to do so. Also occurs when certain fruits are falling out of season; this necessitates movement from vendor to vendor to try and fi nd the best produce at that particular point in time

• Use of a fi xed delivery agent – some level of trust required since agent delivers the produce to her business place on his own

• Delivery agent also selected carefully through referral by one of her suppliers at the market – need to ensure that the agent is trustworthy and will be accountable for his actions

• When purchasing, priority is given to orders placed by insitutions afterwhich can purchase stock to sell at her stand.

• Use of a planned list / budget for market purchases exists but is not always adhered to. Why? Prices of fruits and vegetables not always constant, ability to negotiate higher or lower discounts, availability of very fresh and attractive produce may inspire purchase of larger quantities, impromptu orders from customers while at the market.

• In some instances there is an intertwining of business and social networks although for most of the business networks that also have a social aspect to them, these started out on a purely business basis and some social interaction was later established.

• A good business network and social relationships with surrounding vendors.

• Since she is located in the prime location (a crossroad), she captures a good number of customers.

• She is also able to maintain good client relationships over phone via delivering them at their place, when they call her.

• Mobile phone is a key tool in enabling many of the activities in the value chain.

• An in-direct barter like system is present in her business environment. She purchases things from the nearby stalls and they in turn also come to her to purchase fruits or vegetables.

• The mobile maize sellers would sit and chat with her and this can be described as a socio-business gathering for them. The maize sellers may get customers who came for fruit purchase and likewise Beatrice gets some customers who also buy fruit though they were initially attrracted by the maize sellers.

• Arrow shows direction of communication


Key:

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The Local Economy

Business in the area

Within the vicinity there are a number of similar entrepreneurs; 4 fruit vendors up the road and some 15 odd vegetable vendors down the road who only set up in the evening. They come from the main market which closes at about 12noon so as to fi nish any produce they were not able to sell at the market. There are other business people in the area such as roast maize seller, snacks and soft drinks vendors, sausage and samosa vendors with pushcarts, Movie and Music DVD Vendors. Other common occupations include boda boda transporters and tuk tuk drivers. There are also many schools in the vicinity which provide employment for teachers and subordinate staff.

Within the CBD open air hawking or selling thrives with vendors selling a wide variety of products such as clothes, shoes, electronics, handcrafts, mobile phone airtime, etc.

Infrastructure

Like most other vendors in her area and even in the town centre, Beatrice sells open air style hence has no business premises as such. She therefore has a rather diffi cult time dealing with adverse weather conditions. The rainy season is on and whenever it rains she has to cover her produce to avoid it getting wet or spoilt. When it rains very heavily she is forced to temporarily abandon her stand and seek cover at her husband’s stand across the road which has umbrella shades. There is no running water nearby so Beatrice gets water in small jerricans from a friend at whose house she keeps her handcart everyday. This is somewhat tedious.

Average expenses and sales

Other than money spent to purchase the produce at the market, other day to day business expenses include her transport to and from the market.

She spends on average in a month a total of EUR 57.9 as calculated from the daily and monthly expenses shown in the value chain. This takes into account 26 working days for all but two of the daily expenses since she does not work on Sundays. Storage fee of handcart and airtime are however calculated over 30 days.

In terms of sales this ranges from a low of EUR 6 to a high of EUR 17 per day. Fridays, Saturdays and Mondays are usually the most productive days (as long as good weather prevails) and this is when Beatrice can make sales of EUR 17. Other days can range from EUR 6 to 8 to 10. Depending on the sales of the day Beatrice estimates how much profi t she could have made and this ranges from a low of EUR 1.5 to a high of EUR 5 per day. She draws this amount from the sales kitty at the end of every day and keeps it aside at home. She does this fastidiously so as to ensure she has some money at the end of every month to cater for hers and her family’s needs. She believes that failure to do this leads to one spending all their money in the business without a proper plan and hence fail to make ends meet. Her husband conforms to the same system. They accumulate the money throughout the month and at the end of the month pay their bills from these savings. Any amount that is left over is banked – they have ajoint account at Equity Bank in Nakuru. She says that in a good month they may be able to bank savings of about EUR 15. The payments from the schools she supplies contribute greatly to the monthly savings banked since the schools only pay on a monthly basis and when she receives this money only draws from it for an immediate pressing need otherwise she banks the money.

Supporting services

Financial assistance is limited to a small merry-go-round between herself, business partner and her husband. They contribute EUR 1 daily and the pot of money goes to one of them every end of week in a rotational manner. This

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helps boost Beatrice’s business as she has more money to increase her stock of fruits and vegetables especially for the more productive business days like Friday, Saturday and Monday. There are only 3 members in this group however as they are skeptical about widening the circle lest unscrupulous people run off with their money. The only other fi nancial assistance is that of credit extended to her by the vendors at the market who supply her with fuits and vegetables.

Competition

Competition is not too stiff in Beatrice’s area of operation. She has 4 fruit competitors within her business vicinity and she tries to offer better prices so as to attract more customers. She often seeks to know what prices they are selling at so that she can price competitively. She says that the existing competition does not have any negative effect on the social relations – they respect each other as business people and do not interfere with one another’s businesses. Also she appreciates the presence of competitors who are more established than she since she has only been around for 3 months. The reason for this is that she knows there is already a market for her goods and there is hope that with good business practice and strategy she can win over the competitors’ customers. There is good competitive spirit.

Apart from her area of business Beatrice also faces competition from other fruit and vegetable vendors in town. There are stalls set up in town by the municipal council for fruit and vegetable vendors and these small stalls host 213 traders. These vendors get produce delivered to them in trucks from different parts of the country as well as from other countries like Tanzania and Uganda. Otherwise they also purchase their stocks from the main wholesale market in town. They are considered competition because they supply orders to hotels and schools which is also Beatrice’s market. This is the reason why she has only managed to establish delivery relationship with 3 out of 8 schools in her business vicinity – by the time she got into the business the other 5 schools were already dealing with other vendors. The vendors from the stalls in town also sell retail to individual customers and hence those who buy here will not stop at Beatrice’s stand on their way home from town. However those who do not wish to carry too much with them all the way from town would rather buy from Beatrice as she is nearer the residential areas.

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Business practices:• There is an unspoken trust between the retailer and the wholesaler in the

markets which is the key to survival of such markets.

• She is keen to minimize business expenses any way she can – sharing the municipal fees with her business friend, walks back to work from the market to avoid paying matatu or boda boda fare

• No specifi c long term business goals and plans and has no specifi c plan or way of dealing with major challenges to her business such as:

• Important functions at the stadium like a president visit, then she has to shift her stand to another location and she loses customers.

• On weekends, or when schools are closed, she doesn’t have student and teacher customers.

• Rains and cold weather in general reduces sales signifi cantly as there are fewer passerbys who will stop and people don’t like to eat fruit in the cold weather. Unpredictability of weather is a major hindrance to her business.

• Peak hours of the business are at lunch time and the main one is from 3pm till 6pm. She busies herself setting up her stall and cleaning the fruits in the earlier hours.

Communication networks and practices:• The key to her business success is good customer relationships which she

has been able to maintain to date.

• In-person interaction is preferred when purchasing her produce as it enables and eases bargaining hence is not willing to subscribe to a service which can get her goods delivered at her place using an sms, or any text based application.

• There is also heavy in-person or face-to-face interaction between her and all her business and social networks

Use of Mobile Phone in the business:• Mobile phone is a key tool for planning and organizing of her business

days.

• Heavy usage of mobile phone is evident in receiving calls for orders from customers, calling customers to ask for orders, placing orders with suppliers and sending text messages to debtors.

• Often uses M-Pesa to transfer money to suppliers whom she owes. She also receives payment from debtors via M-Pesa. She is also open to other fi nancial schemes or models that can uplift her business as long as she is sure the risk is minimal e.g. she is currently contributing EUR 1 per day towards one member of their merry-go-round daily on a rotational basis.

CONCLUSIONS• There are a myriad of tasks involved in the successful running of a micro fruit

and vegetable business which the individual microentrepreneur cannot in reality perform as effectively and effi ciently as if he or she were to share and allocate these tasks to business partners (were such a collaborative and larger business unit to be formed).

• Calculator, calendar and to-do list are major business organizers for such a business. A minipreneur like her might use an entry level business phone with essential features only. For example emailing might not be of much use to them, but calculator, a diary application, log book of clients will be the services they can use effectively.

• Minipreneurs like her will be open to test new but simple technology and applications which help them directly in their business and establish good client relationships

• She could be open to mobile banking and perhaps use a service which enables her earn through networking when she is free during the day. An application using the mobile banking platform like M-Pesa.

• Face-to-face interaction preference could be catered to by an audio-based service.

• Social networks are very important in the success of micro businesses hence any service or device for such business people needs to be one which can maintain and enhance the relationships between the various actors.

• Although the value of this is not immediately obvious to the microentrepreneurs who seem to have rather short term visions for their businesses, information services related to the business could help educate the mcroentrepreneur more about the industry or sub-sector in which they are working and hence help them to enhance and grow their business into larger enterprises.

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Transported by farmers using largetrucks &wholesalers buy at the market orwholesalers buy at farm & transportthemselves

Produce at farms Produce at Beatrice’s retailstand

EUR 12 per monthmunicipal fee

EUR 0.65 per day

EUR 1.8 per monthmunicipal fee

No fee

Selected by Beatrice but transported by

Transportedby husbandeverymorning tobusinessplaces

----------------

---------------- -----------------------

-----------------------

----

Produce at the wholesalers market

EUR 0.5 per day

delivery agent using handcart that he hires

Consumers come and buythemselves, consume thereor carry home

OR Consumers in closeproximity call Beatrice on hercell phone and she deliveres

EUR 0.2 per dayfor packing bags No fee

EUR 15 gateentry fee

Handcart transporteddevery end of day with leftover produce by herhusband to a friendshouse for storage

Produce in stock at Beatrice’s storage house

EUR 0.2 per dayEUR 0.5 per dayphone

airtime spread throughoutall activities in the day

Produce with the consumer

Selected by Beatrice buttransported by deliveryagent straight to theinstitutions that have placedorders using boda boda asmeans of transport which hepays for

At a glance:

Illustration of the Fruit Vendor’s Delivery Chain

• Use of fi xed wholesale suppliers or vendors at the market

• Benefi ts – credit facility extended, offer better discounts or best price, enables advance booking of produce through mobile phone, can establish trust since after purchase leaves the product with vendor awaiting collection by delivery agent.

• May purchase from other vendors if usual suppliers have no stock or no suitable stock and therefore allow her to do so. Also occurs when certain fruits are falling out of season; this necessitates movement from vendor to vendor to try and fi nd the best produce at that particular point in time

• Use of a fi xed delivery agent – some level of trust required since agent delivers the produce to her business place on his own. Selection of the agent is alo through referral by one of her suppliers

• When purchasing, priority is given to orders placed by insitutions afterwhich can purchase stock to sell at her stand.

• Use of a planned list / budget for market purchases exists but is not always adhered to. Why? Prices of fruits and vegetables not always constant, ability to negotiate higher or lower discounts, availability of very fresh and attractive produce may inspire purchase of larger quantities, impromptu orders from customers while at the market.

• A good business network and social relationships with surrounding vendors including socio-business gatherings and indirect barter-like system with other sellers in the area

• Mobile phone is a key tool in enabling many of the activities in the value chain.

• She keeps an account of her business and uses mobile phone frequently either for calculating and checking her to-do list

Notes on the delivery chain

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Overall Observations and Conclusion

Business Practices

The microentrepreneurs are hard working and disciplined business owners. Due to the fact that they run their own businesses, they are highly involved in almost all the activities of managing the business. They form interpersonal relationships with their suppliers and clients and leverage these links for the running of their businesses (e.g. to obtain credit, secure customer loyalty, get discounts, etc). Trust is a central pillar for the success of the small businesses and they are signifi cantly interdependent. The specifi c observations were:

• There is a big difference between the daily income and the daily activities of the 5 entrepreneurs. There are however, many common factors:• They are very busy and work very hard to generate a small amount of money• There is a lot of discipline among the micropreneurs to keep records and track expenditures in order to monitor the performance of the business• The importance of social networks and trust used to support actors between the value chain• Brand loyalty was observed to be high amongst the entrepreneurs• There is close family support between the micropreneurs and their spouses for the success of their businesses• Word of mouth and social interaction are an important avenue for business promotion• Business associations were found to be valued and desirable amongst the microentrepreneurs. Several made the effort to be part of these

associations and merry-go-rounds but they faced challenges from:• Strained relationships from fi erce business competition• The high mobility of business partners• Diffi culty in establishing trust and accountability for large groups

• For the microentrepreneurs, sustaining the business is a greater priority than expanding and growing the business. Lack of information may be perceived as one limiting factor in expansion of the business (others include fi nances, psychological and social). The businesses are mainly used for subsistence

Communication Patterns

It was noted that the microentrepreneurs are highly networked individuals with numerous social relationships for business purposes. During the course of a

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normal day majority of the communication taking place is for business rather than social purposes. For many of the microentrepreneurs, their mobile phone acts as a “service on demand”contact point for their customers and they receive a large volume of incoming calls – usually for appointments, meetings, orders, etc.

• Mobile phones have a very big role in each of the microentrepreneur’s businesses and in some cases it has transformed the way of doing business in that particular trade

• Selection of the Mobile Service Provider is mainly based on the popularity of that network where the majority of the population may be found (it is cheaper to call within the same network)

• There is an increasing awareness on the prices/tariffs of MSPs due to increasing usage of mobile services

Role of the Mobile Phone in Business

Almost all the microentrepreneurs state that the mobile phone is the lifeline of their businesses. The overwhelming use is person-person communication. Ownership of a mobile phone facilitates ease of communication which increases accessibility and multiplies business volume. It also increases effi ciency by enabling faster and wider access to information such as prices, services, emergencies, etc.

• The entrepreneurs are heavy users of mobile phones using several features e.g. calendar, alarm, camera, to-do list, entertainment, etc• They prefer phones that are simple, easy to maintain and keep, repair and replace• Among the microentrepreneurs phone calls were predominantly used over SMS

• Mobile phone illiteracy?• Preference for direct conversation• Need for quick communication

Conclusion

Banking and/or book-keeping are key services used by the microentrepreneurs. These services were also noted to have a signifi cant bearing on the business and for which the microentrepreneurs consequently dedicated time and close attention to. The services were used for savings, loans and repayment, securing of cash or tracking of business performance. While subsistence-based microenterprises may not benefi t from facilitation/integration of these services into the daily running of the business, growth-oriented microenterprises stand to gain from developments in this direction.

Social networks characterize the lives of the microentrepreneurs. The microentrepreneurs tend to agglomerate and leverage these networks for business dealings with different agents in the value chain. These networks also act as support systems through self-help-groups (merry-go-round) or other associations. Combined with the heavy use of mobile phones for business, the integration of simple social media services for business promotion is another potential area of exploration.

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• Heavy reliance on mobile phone for majority of entrepreneurs to run their businesses (scheduling, time and contact management, calling, calculations)

• Numerous. Majority of businesses in Africa are classifi ed as microentrepreneurs

• Basic record keeping is common to majority of the microentrepreneurs (earnings, expenses, savings, etc)

• There is good (and increasing) availability of mobile phones in most African countries

• The microentrepreneurs are highly networked individuals with signifi cant communication needs

• Basic phones are available at affordable prices

• The highly competitive environment among microentrepreneurs means the mobile phone is important channel of getting customers

• There is an increasing appreciation of capability of mobile devices to support business and other areas

• Microentrepreneurs commonly use dual-sim phones or have two sim cards to maximize on low tariffs across networks

• There is signifi cant use of microfi nance and banking services by the microentrepreneurs to support their microbusinesses

• Mobile entertainment is a potential area of exploration as the microentrepeneurs occasionally use games to while the time (e.g. games to teach entrepreneurship and business)

• Travel and other far-away obligations results in mobility of microentrepreneurs and the need for long distance mobile business management

• There is potential for the use of the internet and related services to promote marketing and trading among microentrepreneurs

• Mobile phones present an opportunity for the microentrepreneurs to have and include value-added services for their customers

• There are apparent limitations to the microentrepreneurs’ vision for growing their businesses

• There is limited long-term planning for the microenterprises. Most plans are short term (days, weeks, months)

• Establishing trust (key value for business) is diffi cult over phone transactions: Face-to-face interaction is preferred to ensure trust

• Information dissemination is low and it is e.g. diffi cult to get information about mobilebanking services and the microloans.

• Theft of mobile phones is a signifi cant concern for many microentrepreneurs

• The affordability/cost of services (voice, sms, data) infl uences the uptake and use of mobile service

• There is a constant infl ux of cheaper and lower quality imitation devices

• A number of the microentrepreneurs are unable to utilize the phone features or services, because of illiteracy or mobilephoneilliteracy

• The tough physical environments that many microentrepreneurs operate in (water, dust, rough contact) means microentrepreneur’s preference is for those devices that can withstand use in those areas

SWOT Analysis on Microentrepreneurs and the Uses of a Mobile Phone in Business

Strengths

Opportunities

Weaknesses

Threats

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While the microentrepreneurs mainly use their mobile phones for voice communication, the devices are also somewhat used for business and time management at a basic level. The potential of entry level mobile phones to be used as tools for organization and scheduling for business purposes (calendar, to-do lists, contact management, etc) emerged.

In the carrying out of this research, there were several interesting areas which emerged as notable further investigation to better understand the business practices and patterns of microentrepreneurs in Africa.

• The need to understand the changes in the various business environments which the new mobile tools can bring. What changes would result in the business practices and dynamics from the introduction of the new devices/services?

• The educational needs for growth of microenterprises and the role of mobile phones. How could microentrepreneurs benefi t from education and learning related to business growth and development on their mobile devices?

• Societies and the organizations/associations that entrepreneurs have. What are they and could the microentrepreneurs operate better with improved fi nancing and support services?

• Limits to the growth of microenterprises: Many of the microentrepreneurs appear to be contented as entry-level microenterprises. We wonder if this is as a result of social restrictions in the cooperation/collaboration of microenterprises. Is a 100 person company less benefi cial than 100 independent microentrepreneurs in delivering a service?

• Synergy: How may microentrepreneurs synergise and create opportunities for increasing income in the microentrepreneur’s business? I.e. goods and services that appeal to the microentrepreneurs’ clientele but not necessarily associated with the business’ main product. Not only to increase income but also to bring repeat customers? E.g. through partnering or task sharing.

Overall, we believe that several predispositions and tendencies in the business and communication patterns of microentrepreneurs yield favourably to mobile phone use. This reveals an opportunity to explore further development of basic (non-fancy) applications to address generic but business specifi c management needs.

a day in the life of a microentrepreneur

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