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Digital payments can increase firms’ profits by
allowing more efficient and cost-effective financial transactions
Digital payment systems can conveniently and
affordably connect entrepreneurs with banks, employees, suppliers, and new
markets for their goods and services. These systems can accelerate business
registration and payments for business licenses and permits by reducing
travel time and expenses. Digital financial services can also improve access
to savings accounts and loans. Electronic wage payments to workers can
increase security and reduce the time and cost of paying employees. Yet,
there are challenges as many entrepreneurs and employees lack bank accounts,
digital devices, and reliable technology infrastructure.
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Expansion of microfinance to rural areas may
reduce credit constraints, helping non-farm sector growth, employment, and
development
The rural non-farm sector plays an important
role in diversifying income for rural households in developing countries and
has the potential to emerge as a major source of employment. In some cases
it has outgrown the agricultural sector, in part due to the expansion of
credit through microfinance institutions that are supported by governments,
donor agencies, and businesses. However, future expansion of the rural
non-farm sector requires increased flexibility in credit contracts, as well
as decreasing the cost of credit and the delivery of complementary inputs,
e.g. skills training.
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Well-designed entrepreneurship programs show
promise for improving earnings and livelihoods of poor workers
Can entrepreneurship programs be successful
labor market policies for the poor? A large share of workers in developing
countries are self-employed in low-paying work or engage in low-return
entrepreneurial activities that keep these workers in poverty.
Entrepreneurship programs provide business training and access to finance,
advisory, and networking services with the aim of boosting workers’ earnings
and reducing poverty. Programs vary in design, which can affect their impact
on outcomes. Recent studies have identified some promising approaches that
are yielding positive results, such as combining training and financial
support.
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