E-bookkeeping: Measuring small firms behavior in Nigeria

Study Context

This project studies the impact of providing small business owners in low-income communities an app-based technology solution to record systematic, product-level data. The study aims to determine whether having access to detailed information on business metrics over time can help business owners make better decisions and plan for the future. It will also provide valuable micro-level data to researchers, microfinance institutions, and government organizations to understand the behavior of small firms in low-income countries and develop  targeted micro-level interventions.

Study Design

The research examined a cohort of 376 firms divided into two WhatsApp groups, both initially exposed to record-keeping training and subsequently provided with an app. The study encompassed 40 markets, initially engaging 1,936 firms in Lagos, and concluded in December 2023, culminating in a stakeholder meeting.

Results and Policy Lessons

Findings showed that: 1) Firms in the micro-consulting arm of the WhatsApp group indicated an increased likelihood of downloading and utilizing a record-keeping app for the first time compared to firms with only beneficial information; 2) Firms that joined the training group adhere to best financial practices than firms who are unwilling, though both are similar in attributes; and 3) Firms that utilize digital methods for record-keeping exhibit a higher degree of precision when recalling their profits over an extended period. This study reinforces the need to provide specific training and additional support to small firms when introducing new technology and highlights the implications of digital records on the precision in measuring small firms’ behavior. The study was publicized in Nigeria’s Silverbird Television (watch clip here).