Digital technologies allow women entrepreneurs to survive and adapt to the new normal.
--BY SAMJHANA KARKI
"In today's context, if your business is not on digital platforms, it does not survive. You lose your potential customers," says a trainee of a USAID-supported project ‘Fostering Resilience of Women-Led Businesses (including home-based women producers) and Consumers’. After attending the project's training on digital literacy, she began to increase her business presence across e-commerce platforms, i.e., Thulo.com. Similarly, another participant in the project shares that despite her physical disabilities, online mediums have assisted her in going into business and selling her products without significant challenges.
These two stories of Nepali women entrepreneurs represent how technology has been at the core of disrupting existing Nepali business models. Digital literacy is the competence of users to use information and communication technologies in their day-to-day personal and professional responsibilities for more extensive benefits. Nowadays, being digitally literate allows entrepreneurs to explore and make rational decisions regarding growth opportunities and risk mitigation associated with their businesses. Hence, digital technology plays an indispensable role in the promotion and sustainability of any entrepreneurial ecosystem.
In recent decades, technological revolutions have occurred at an ever-increasing pace. People use the Internet and digital technologies to access social media, education, businesses, healthcare, jobs, financial services, government services, and much more. As of April 2022, there were five billion Internet users worldwide which is 63% of the global population. Innovation in science and technology makes it possible to enhance people's ability to use and access technology which is one of the factors affecting economic and social growth. Digital disruption and technology adoption is nothing new, but the COVID-19 crisis has changed the setting in a way that will make them more prevalent.
The pandemic fully displayed the power of digital technologies in entrepreneurship, with the shift towards digital payment and e-commerce. Digital technologies have allowed entrepreneurs to survive and adapt to the new normal. For example, having an online shop on e-commerce sites increases the outreach of any products. Likewise, email, website, and social media play a vital role in business promotion and sales. Many digital skills are now necessary for everyday use, especially in entrepreneurship. Thus, digital literacy is required for entrepreneurs to start and run a business successfully and to grow as successful entrepreneurs. However, the existing digital divide presents a challenge to entrepreneurs in Nepal.
Women's Status and Digital Connectivity
According to the Central Bureau of Statistics (CBS) 2019, 99% of registered enterprises are micro, small, and medium enterprises (MSMEs). Women entrepreneurs own 60% of the MSMEs, as reported by the Federation of Small and Medium Enterprises Nepal. COVID-19 disproportionately impacted MSMEs in Nepal. As stated by the Federation of Women Entrepreneurs Association of Nepal (FWEAN), around 15% of women-run enterprises have collapsed since the pandemic. Impediments in access to finance, limited collateral, and low digital literacy are significant barriers that women entrepreneurs face while growing and scaling up their businesses during and after the pandemic.
Nepal has 11.51 million Internet users as of January 2022. Despite this, it is noticeable that there exists a gender gap in digital access. As stated in the Connectivity in the Least Developed Countries Status Report, 2021, 91% of male population and 79% of the female population own a mobile phone. This data illustrates a digital divide between men and women in Nepal. The same disparity also exists between Nepali men and women entrepreneurs. Nepali women entrepreneurs have less access to technology, use fewer mobile phones or computers or are less online than their male counterparts. The gap is more so in rural parts of Nepal where some women entrepreneurs have never been online or have little access and are missing out on the benefits of connectivity.
As mentioned in the Digital Nepal Framework, 2019, Nepal's e-commerce industry is worth approximately Rs 3.8 billion (USD 30 million) and expects to grow by more than 41% by 2022. The framework has outlined eight domains and 80 initiatives to utilise digital development for economic growth. Out of 80 initiatives, the development and promotion of the e-commerce and Information Technology Enabled Services (IteS) ecosystem ranks 68th. This pandemic has enhanced digital transformations. The trend of online shopping has grown. Nepal has been experiencing rapid growth in the e-commerce business. It has substantial potential to contribute to the Nepali economy. In such a scenario, financial, digital, and Internet literacy is essential to make women genuinely employable and empowered.
The existing digital divide, however, leaves many women entrepreneurs behind. Due to the deprivation of information about online marketing platforms and not knowing how to operate them, Nepali women entrepreneurs continue to miss chances to connect with potential investors and customers. Besides that, electronic banking, one of the latest technologies adopted by banks, poses another challenge to women entrepreneurs. With the linkage of financial transactions with electronic systems, entrepreneurs who are not tech-friendly have less access to finance. Furthermore, female entrepreneurs must have digital skills with a sudden shift in business to the technological sense of advertising and selling products and services. In addition, they require digitisation skills to use online banking services and digital payment platforms.
Women entrepreneurs contribute to achieving broader development objectives such as capital formation, employment generation, and innovation. They act as a backbone for resilient and sustainable economic recovery. Investments in female education, and financial and digital skills training are required to empower women entrepreneurs. The government has been investing in several initiatives for spreading digital and financial literacy across the country. The Monetary Policy, 2022/23 talks about preparing the 'Financial Literacy Framework 2022'.
Likewise, the budget for fiscal year 2022/23 has noted that the government will lead initiatives to promote a fully digital banking system. In collaboration with international organisations, banking, and financial institutions, the government should invest in preparing an innovative model so that women can utilise subsidised loans and various schemes. Training on digital financial services, like e-banking, mobile wallet, and e-commerce platforms, should start at the community level. For example, local governments could develop a database of existing women entrepreneurs and facilitate such digital training through women groups (Aama Samuhas) and youth clubs. Providing women entrepreneurs with the right digital skills, such as setting up emails, video conferencing and social media applications, and how to connect their business to e-commerce platforms, will help them grow as resilient and successful entrepreneurs.
(Karki is a Research Assistant at the Nepal Institute for Policy Research.)