In the city of Nur-Sultan, Kazakhstan, Kamara runs a bakery selling fried dough balls, called baursak, and other traditional breads. Women-owned micro and small enterprises (MSEs) like Kamara’s make up just over half of MSEs in Kazakhstan. In neighboring Uzbekistan, 27 percent of SMEs are female-owned and operated. When asked about her business’s future, Kamara comments, “I enjoy running my business and I know I can do bigger and better things with it. I want to grow it, but I don’t know where to go next.”

Kamara is one of the thousands of microbusiness owners who have expressed a need for guidance and resources to take the next step in improving and growing their business, attracting the right financing, and expanding their customer base.

Digital products and services could address this need. While digital adoption rates and the use of digital financial services vary between Kazakhstan and Uzbekistan, smartphone penetration is high in both. Several digital payment providers, such as Kaspi, Click, and Payme, have entered the markets and serve millions of entrepreneurs, including micro and small businesses. Further, Central Asia has shown a tremendous opportunity for the growth of fintech and digital services as mobile penetration, government support, and private sector financial innovation have continued to rise in recent years.

As part of a global initiative to accelerate economic recovery for small businesses post-pandemic, Strive Community has partnered with Accion to digitally empower MSEs throughout Kazakhstan and Uzbekistan, with a particular focus on women. This partnership aims to equip small business owners with digital solutions tailored to their specific needs and digital aptitudes to increase business profitability, efficiency, and management.

Here’s what we have learned so far about MSEs in Kazakhstan and Uzbekistan:

1. When there’s a need, digital barriers can be overcome.

MSEs do have digital savviness, and tapping into the right channels and bringing direct, tangible value directly to them is likely to build confidence and trust to drive usage.

According to our research, nearly 90 percent of small business owners use smartphones. The majority of micro-entrepreneurs have applied for credit online and accessed content through social media to improve their business management and unique trade skills. Millions of users are transacting via digital payment platforms and using QR codes to make transfers and pay for goods and services. From our needs assessment conducted with microbusiness owners, we found that Kazakhstan and Uzbekistan demonstrate different levels of digital maturity, and there is scope for adoption and usage to scale in both countries, as long as digital services and content have a clever value proposition and are offered through familiar channels.

2. While women may be more risk-averse when making financial decisions, they tend to play a significant role in starting and running their own small businesses.

Gender plays a role in the perception and evaluation of risks. Women MSE owners are risk-averse when making financial decisions and remain conservative about seizing new opportunities. While there are no legal barriers for women to start and run a business, societal and cultural norms often affect their aspirations and confidence in taking their businesses to the next level. It is essential to offer women entrepreneurs support to gain the courage to break gender stereotypes and minimize the limitations that cultural norms may place or have on them, and to present them with an easy-to-follow path for adopting new digital tools.

3. Peer networks that foster mentorship and capacity building on familiar digital platforms can help entrepreneurs grow their businesses.

MSEs across both countries expressed a strong interest in better connecting and engaging with their industry peers to seek advice, learn competitive pricing strategies, and promote their products. From organized Telegram groups in Uzbekistan to WhatsApp and Instagram in Kazakhstan, small business owners want direct access to their community on the channels they know best.

“I’m in a [WhatsApp] group with 95 other store owners like me also selling similar products, some even sell in bulk. We send pictures, we talk about pricing, and we buy and sell, too. This is the best way…we should all have this kind of group,” shared Natalya, a market stall owner we met during a visit to Almaty, Kazakhstan.

4. Entrepreneurs want faster, more affordable capital to grow their businesses.

Micro and small business owners are aware of the need for capital to unlock growth for their businesses, specifically for purchasing inventory, opening additional storefronts, and diversifying their product suite. There’s an inherent distrust of loans, particularly from lending institutions, as credit is perceived to be costly, and the application process is time-consuming with extensive documentation requirements. With a growing base of data-driven platforms serving MSEs in both countries, there’s an opportunity for digital financial service providers to offer credit products that are easier, quicker, and more affordable to access.

We are continuing to deepen our understanding of the digital and financial needs of MSEs and the institutions that serve them in Uzbekistan and Kazakhstan. These learnings are just the beginning of our journey in Central Asia, as Accion and Strive Community will partner with local institutions to develop and optimize scalable digital business tools designed to support micro-entrepreneurs, like Kamara and Natalya, to unlock their digital potential and grow their businesses.

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2023 Annual Report