Академический Документы
Профессиональный Документы
Культура Документы
Nokia Research Africa (NoRA) focuses on understanding the needs of the African mobile phone user and creates concepts and visions to fulll 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.
Executive Summary
Executive Summary
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, specically 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 NoRAs mission of catering to low income communities and users in Africa. The project is also tied to Nokias success in Africa: 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. 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 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 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
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 specic management needs. Some intial potential areas are: 1) Banking and/or book-keeping which are key services used by the microentrepreneurs and have a signicant bearing on their businesses. While subsistence-based microenterprises may not benet from facilitation/integration of these services into the daily running of the business, growthoriented microenterprises stand to gain from developments in this direction. 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. 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.
2)
3)
Contents
Introduction .........................................................................................................................................................................................8 Background ..........................................................................................................................................................................................9 The Project............................................................................................................................................................................................12 A Day in the Life of a Microentrepreneur: Microentrepreneur Proles
Accra ............................................................................................................................................................................................................. 14 Douala .......................................................................................................................................................................................................... 24 Kisumu ......................................................................................................................................................................................................... 34 Mombasa..................................................................................................................................................................................................... 44 Nakuru ......................................................................................................................................................................................................... 54
Introduction
The signicance 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 denition of an MSME globally varies according to various parameters: labour, capital, loan size, xed asset and annual sales turnover. The size limit is among the most common denitions 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 household SMEs 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 settings SMEs 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 nances) especially at the micro level
1 2 3
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) Srivastava, Ritu. (2008). Status of MSMEs in Africa. ICTs and MSMEs: A look at Africa. Center for Science, Development and Media Studies (CSDMS) Elaian. (1996) As cited by Albaladejo, 2002
Background
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 signicance of MSMEs in the development process has gained importance in the last decade leading to the understanding that Africas ability to [improve its economic performance] depends on its ability to harness the entrepreneurial potential visible in its streets, marketplaces and SMEs2. 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 fulll subsistence needs of which very few graduate into larger 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 signicance 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 2 3 (Chen, 2001 as cited by Alabaladejo, 2002) 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. Banks, Ken. (2008). Mobile Telephony and the Entrepreneur: An African Perspective. Micronance Insights. https://www.micronanceinsights.com/articles_new. asp?member=nonmembers&id=146
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.
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 benets associated with increased fomalisation include: higher quality, better paid and more sustainable jobs; a broadened tax base; increased investor condence in local economies, improved access to business services, formal markets, and productive resources; increased information on local enterprises which facilitates deal-making, etc. Nokias 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.
10
Overall Observations
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 protable (women aim at income security and diversication while men generally aim at expansion and protability)
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.
11
The Project
The microentrepreneur project is a 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 eld visits and general discussions with microentrepreneurs in the 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 MSMEs 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 ndings of which form the core part of this report. The Microentrepreneurs and their Locations Accra, Ghana - West Africa: Sea fairing 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
12
A Day in Accra
Source: Google Maps
Nii Aryee 45 Married with two children. His wife stays home to look after the young children Fisherman trained by his father Fisherman, boat owner Respected and trusted central gure of the shing community
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 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 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 Accras colonial past.
Nii Aryee (alias One Man) is a 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 ve children. Aryee has a Middle School certicate to his credit. His wife is a sh seller and the single most important business partner for Aryee. His rst son, who is 32 years, is a 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 fth is just a baby girl of six months. His 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 shing, he uses his spare time to attend to other affairs like solving family and community issues.
14
Accra
Ghana Population: 23 million Ghana was the 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 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 beneting 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.
15
O130 The shermans day starts very early. Most of the 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 shing locations which might be 20 km from the shore.
0400 The net is being dragged into the boat with the sh inside. If the net is empty this takes 30 minutes, if there is plenty of sh it takes 1-2 hours. At this point the rst communication with the main buyer, the boat owners wife, are made.
0700 The sale of sh starts immediately when the boat arrives on shore. The boat owners wife buys the sh and a carrier takes the sh to her house.
16
Accra
0800 - 1500 Meanwhile, the shermen share the money, clean the nets and boat, eat and rest. They ll the outboard motors tanks and prepare the boat for afternoon shing.
0730 The rst customers arrive to buy the sh from the shermans wife.
1500 - 2000 The boats head for the ocean for another dayshing trip. Afterwards, preparing the boats and nets for the next mornings shing takes till 2200. This leaves two and half hours for sleeping before the day starts all over again.
3.
17
18
Accra
Networks
The 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 shing on these shores? Does the family have a role in local decision making? Size of the shing boat. There are 3 different categories of boats among the canoe shermen: 1. Small canoes without motor for 3-4 persons. These sherman sh near the shoreline with throwing nets, hooks and small nets. They mainly catch sh for their families, but also for sale whenever the catch is good. Middle sized canoes with outboard motors. These boats carry six shermen and sell most of the catch. Because of the size of the boat and number of shermen they neither can use the big nets nor go far away from the shore to the sea. 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 shermen on the boat just need to do with slightly smaller income.
2)
2.
3.
Key: Arrow shows direction of communication Thickness of line indicates frequency of communication Email Phonecall SMS Face to Face
3)
Education is also a factor which can raise the status of a 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 shing communities. This is widely acknowledged and the sherman aim to educate their children as well as possible.
19
20
Accra
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 shing canoes use 40 horsepower outboard motors. The motor is single most expensive investment for the sherman. The Ghanan National Canoe Fishermen Council provides the shermen and boatowners with loans for buying nets, boats and outboard motors. The shermen pay small weekly fees to the Council which ensures that the loans available for the shers. They contribute GH200 (150 Euros) each for a week to pay back an outboard motor and GH50 (40 Euros) for a shing net. Nii Aryees 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 GH12,000 (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 shermen do not pay taxes and they do not have licenses. Nii Aryee stopped saving in the bank because they failed to full 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 shing group leader and some other shermen come to him for advice and help. When the shermen report their problems to him, he also takes it up with the relevant authorities. Weekly costs per boat for the boat owner:
Petrol Loans (if there are any): -Fishing net -Outboard motor Fishing Council membership Phone bills Total 40 Euros 150 Euros 4 Euros 20 Euros 64 374 Euros 60 180 Euros Earnings Costs Total What a crew member earns per week
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:
21
22
Accra
At a glance
The Economic Value Chain in the Fish Micro-Industry
23
A Day in Douala
Source: Google Maps
Trade: Other:
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 countrys major exports and trade with Chad. A notable feature is the Port of Douala which is the countrys 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.
Madame Ouethy Rosie 47 Married with 4 children aged 12 to 21 High school. Trained 1year with professional painter and teacher and 3 months with drawer. Drawing since little girl. On the job learning Drawing, Painting, Batik Handicrafts (creates, transforms and resells) 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 micronance group for her shop. She also helps to manage and look after the family farm where she supervises some farm hands.
24
Douala
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 towns 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 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 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, xed telephone lines and cellular coverage.
25
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 nalise on materials, sizes, costs and nishing. The rst customer, a walk-in customer drops by.
26
Douala
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.
1600: The local micronance deposits and payments collector calls in at the shop. Madame instructs her assistant to handle the days deposit which she does and records. Madames 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. 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 shops 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 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.
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.
27
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 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, conrm 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 Calls 80% Personal Business. Assistant Phone with her always Text
and
20%
28
Douala
The business actors, their roles and mode of interaction
Networks
Associations/Groups
- Money contribution - Social support - sms, email, face2face - poor collaboration
Clients
- 95% walk-in, few loyal - Mainly tourists, few locals - referrals, grapevine - cash, point of sale, no delivery services - face2face, calls, business cards
Authorities
- Regulate for fair playing grounds - Maintain facilities - Promote tourism - They are failing to do so well enough to promote art/ tourism & facilitate fair competition
Financing Institutions
- Promoting saving - Providing affordable nancing options - Creating a trust environment
Key: Arrow shows direction of communication Thickness of line indicates frequency of communication Email Phonecall SMS Face to Face
29
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 suppliers 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 Rosies 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 anothers shop. There is a lack of professionalism and plenty of cheap imitations.
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
30
Douala
In the illegal open-air Market, which is located at a high human trafc area, there are no customs or local taxes paid and no rent. There is a 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 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.
31
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.
32
Douala
At a glance:
c - So
ial
Sup
po
rt
References and Appendix [1] Facts About Cameroon http://en.wikipedia.org/wiki/Cameroon http://en.wikipedia.org/wiki/Douala 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_proles/1042937.stm http://encarta.msn.com/fact_631504737/cameroon_facts_and_gures.html
33
A Day in Kisumu
Source: Google Maps
Gabriel Owino 28 Married with two children. His wife stays home to look after the young children High school Boda boda operator Lives in Nyalenda area of Kisumu a low income informal settlement
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 signicant 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, shery, agriculture, some tourism, large informal economy
Source: Kisumu Investment Guide 2007
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). Gabriels 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 Gabriels 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-bodas were originally bicycles but are increasingly also motorcycles which are now widely available for purchase in the region. Gabriel rst started work as a taxi cab driver, after which he took additional classes and earned a motorcycle drivers 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.
34
Kisumu
Kisumu Kisumu, on the eastern shore of Lake Victoria, is Kenyas 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 Kisumus 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 difculty has been damage to the enormous natural resources epresented by Lake Victoria, through pollution, overshing 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.
35
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 ofce workers and business people from Nyalenda who know him and have become his clients on a regular basis - they usually nd him at his usual corner or give him a pick-up call.
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 Gabriels 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.
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.
36
Kisumu
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 days 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 days earnings. His rst client of the day is usually his last client, his neighbour who is a close friend.
37
Gabriels 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 sufx -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.
Gabriels 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 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 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
38
Kisumu
Networks
Business Networks:
Gabriels typical business networks are the regular clients who contact him by phone and the customers that he meets on the street.
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.
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.
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.
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). Gabriels 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.
39
40
Kisumu
houses at Kshs 500/= (5 Euros) per month for a single bulb. Gabriel uses an electricity connection from his neighnours 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 fullled 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 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.
41
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 proles 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.
Conclusions:
Gabriel is a new but well settled entrepreneur in his 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.
42
Kisumu
At a glance:
43
A Day in Mombasa
Source: Google Maps
Skills/training:
Trade: Other:
Grace Achieng Njoroge 31 Married with 2 children a girl aged 11 yrs and a little boy aged 2.5 yrs Beauty Training course, Hairdressing course has been working as hairdresser for 8yrs. Hairdresser Her husband works as a clerk at the municipal council ofces in Mombasa
Mombasa is the second largest city in Kenya, lying on the Indian Ocean. Mombasa has a warm, tropical climate The city is the centre of the coastal tourism industry. It is a major trade centre and home to Kenyas 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
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.
44
Mombasa
Mombasa Mombasa city is a coastal island with some of the best beaches in the world. Located on Kenyas 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 inuence on the Citys 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 classied as high income, middle income and low income townships. Buxton in Tononoka area can be classied 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 inuence 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 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. Mombasas average amount of precipitation does vary throughout the year however, with April and May topping out as the citys 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 ll the narrow streets and busy markets. At the dhow docks fresh sh and goods from all along the coast arrive daily [5].
45
0800: A typical day starts at 5:30am. She 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: Graces 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.
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.
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 sufciently and make it so protable 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
46
Mombasa
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 womens group that has come together (18 of them) to get micro-entreprenuer loans from KWFT (Kenya Womens 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 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 clients 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.
47
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 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
48
Mombasa
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 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 womens group that has come together to be able to micro-nancing from Kenya Womens 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 Key: Arrow shows direction of communication Thickness of line indicates frequency of communication Email Grace operates her salon in a manageable social and business network. Phonecall SMS Face to Face
49
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 100 Monthly 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 Graces 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.
50
Mombasa
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 salons 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
51
References
1. 2. 3. http://en.wikipedia.org/wiki/Mombasa#Townships.2FAreas http://www.mombasainfo.com/ http://www.tripadvisor.com/Travel-g294210-s202/Mombasa:Kenya:Culture.html 4. 5. http://www.tripadvisor.com/Travel-g294210-s208/Mombasa:Kenya:Weather.And.When.To.Go.html http://ihs-198.magicalkenya.com/index.php?option=com_content&task=view&id=49&Itemid=61
52
A Day in Nakuru
Source: Google Maps
Beatrice Chepkemoi 28 Married with 2 sons High school. Fruits and Vegetables Vendor Beatrices husband, Benson 31, is self-employed and is also a vendor in the same vicinity selling soft drinks and snacks.
Nakuru is the provincial capital of Kenyas 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 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.
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 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 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 specically 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.
54
Nakuru
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 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 Kenyas most populous district - Nakuru District, with a population of 1.2 million in 1999 - and the countrys largest province - Rift Valley Province, with a 1999 population of 7 million (Kenya 2000) - the town houses a wide range of ofces 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 agroindustrial 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 amingoes is by far the most important one, attracting visitors from all over the world.
55
0745: First stop at market to purchase vegetables to ll the order for St. Marys 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 conrm 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 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.
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.
56
Nakuru
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 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 nger working out what prot 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 rst and then records it on her phones to-do list later.
There are also about 8 schools in the vicinity namely Kenyatta Primary, Kenyatta Secondary, St. Josephs, St. Marys, 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. Marys, Kenyatta Primary, and St. Josephs) 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 benets 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 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
57
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 husbands 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.
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.
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.
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.
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.
58
Nakuru
Calls husband to check whether agent has delivered the order which husband should then take to the school (Calls husband later to conrm school delivery)
Using the phone calculator to check expenditure so far and whether can pay a debt for pineapples and buy more
Calls business partner to conrm whether she should purchase packing bags on her behalf
Calls a teacher at a nearby school to nd out whether she can deliver to her some fruit or fruit salad
Noting down an order with pen and paper; Kenyatta primary needs some fruits for Thursday
Updating her to do list in her phone with names of debtors and amounts owed to her
Sending text messages to some of her debtors to remind them she will be calling on them tomorrow for pay
59
Networks
The following sociogram illustrates Beatrices 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 xed wholesale suppliers or vendors at the market Benets 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 nd the best produce at that particular point in time Use of a 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 sociobusiness 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. Key: Arrow shows direction of communication Thickness of line indicates frequency of communication
60
Nakuru
61
helps boost Beatrices 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 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 Beatrices 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 anothers 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 Beatrices 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 Beatrices 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.
62
Nakuru
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 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
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 doesnt have student and teacher customers. Rains and cold weather in general reduces sales signicantly as there are fewer passerbys who will stop and people dont like to eat fruit in the cold weather. Unpredictability of weather is a major hindrance to her business.
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 efciently 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.
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.
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
Mobile phone is a key tool for planning and organizing of her business days.
63
At a glance:
Notes on the delivery chain
Use of xed wholesale suppliers or vendors at the market Benets 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 nd the best produce at that particular point in time Use of a 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.
Illustration of the Fruit Vendors Delivery Chain
Transported by farmers using largetrucks & wholesalers buy at the market or wholesalers buy at farm & transport themselves
Produce at farms
EUR 15 gate entry fee
----
----------------
No fee
Handcart transportedd every end of day with left over produce by her husband to a friends house for storage
No fee
She keeps an account of her business and uses mobile phone frequently either for calculating and checking her to-do list
64
Overall Observations
Communication Patterns It was noted that the microentrepreneurs are highly networked individuals with numerous social relationships for business purposes. During the course of a
65
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 demandcontact 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 microentrepreneurs 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 efciency 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 signicant 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 benet 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.
66
Overall Observations
SWOT Analysis on Microentrepreneurs and the Uses of a Mobile Phone in Business Strengths
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 classied 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 signicant 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
Weaknesses
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 difcult over phone transactions: Faceto-face interaction is preferred to ensure trust Information dissemination is low and it is e.g. difcult to get information about mobilebanking services and the microloans.
Opportunities
Microentrepreneurs commonly use dual-sim phones or have two sim cards to maximize on low tariffs across networks There is signicant use of micronance 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
Threats
Theft of mobile phones is a signicant concern for many microentrepreneurs The affordability/cost of services (voice, sms, data) inuences the uptake and use of mobile service There is a constant inux 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 microentrepreneurs preference is for those devices that can withstand use in those areas
67
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 benet 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 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 benecial than 100 independent microentrepreneurs in delivering a service? Synergy: How may microentrepreneurs synergise and create opportunities for increasing income in the microentrepreneurs 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 specic management needs.
68