Digital technology is pervasively transforming all work sectors including the informal sector and with COVID-19, we’re seeing an accelerated pace of the world go digital. COVID-19 Lockdown measures such as restrictions on movement and stay-at-home guidelines have impacted the informal economy, cutting off hundreds of informal market vendors from their usual customers, affecting incomes, and straining their livelihoods.
Our UNDP Accelerator Lab Network is seeing major disruptions (and opportunities) in trade, business operations, and supply chains of key sectors of the informal economy. And are leaning into digitalization as means for the informal sector to access new markets by integrating digital tools and developing digital marketplaces for informal businesses and traders to continue to sell their goods and services and connect them with existing and new clients.
So, we asked ourselves, could the quantum leap of digitalization help link people in the informal economy to market and financial opportunities and bridge divides? Could digital platforms designed for informal businesses and traders enable them to reach a broader consumer base and access financial services? What are the risks in this transition that we should be aware of to ensure fairness, equity, and sustainability in our development investments?
Below is a digest of the work of our Labs on digitalization for the informal sector.
Access to digital marketplaces
Transforming informal enterprises through inclusive e-commerce in Uganda
In March 2020, when the first COVID-19 case was recorded in Uganda and the government took action via a nationwide lockdown, the UNDP Uganda Accelerator Lab partnered with Jumia, a leading e-commerce company, to link the informal market vendors with their customers online. So far, the Lab and Jumia have integrated over 2000 market vendors into this e-commerce platform. A new product line, "Kikumi Kikumi," was also launched within Jumia's platform tailored to low-income earners to buy groceries at a low cost and make orders without a smartphone by calling in using a self-help menu on their feature phones. The Lab is now looking at pathways to scale this platform nationally and transform informal enterprises in Uganda through inclusive e-commerce. Learn more here.
Digitally Transforming Informal Markets in The Gambia
In The Gambia, the Lab supported local informal traders, particularly women and youth, through
“My Lumo,” a digital e-commerce platform allowing local informal traders to market their goods and services and transact electronically. Once a vendor is registered on the platform and the goods and services also uploaded with price and other relevant details, online trading could easily be facilitated as a form of e-commerce with an inbuilt online payment system using mobile money. Over 200 informal market traders are on the platform, with an average of 100 users visiting monthly. Learn more here.
Connecting informal vendors to digital platforms in Namibia
In Namibia, the Lab partnered with Tambula, a local online shop, with a digital commercial platform to connect informal small businesses and traders with consumers who desired items from the market and their usual street vendors at a time when these vendors had been taken off the streets due to COVID-19 restrictions. This initiative benefits the consumers who can remain in the safety of their home during the COVID-19 lockdown as well as the informal retailers who now have access to customers who they ordinarily would not have had access to by also safely working from home. The Lab has successfully onboarded 50 informal fruit and vegetable vendors to the platform as part of the pilot phase of this initiative. Learn more here.