The Internet has given entrepreneurs in third-world countries the opportunity to launch profitable businesses over the Internet. A few years ago, Forbes featured an article on Mary Ogwang, an entrepreneur from Uganda that earned a stellar living from an Internet business, serving customers in the United States and Europe. Since that story was published, many other entrepreneurs in developing markets have built profitable businesses.
Sam Goldman, an entrepreneur serving third-world markets, told Forbes that technology has created an entrepreneurial renaissance in many impoverished regions across the world.
“We are in the perfect market,” Goldman says. “We had this technology convergence happen for totally separate reasons, exactly at the time that the social enterprise space exploded.”
Even traditional lenders such as Lånemegleren are praising these businesses for opening new doors for developing entrepreneurs.
The Internet has created new opportunities for entrepreneurs in these countries to make a living. Unfortunately, they also face many challenges. Securing access to capital is the biggest obstacle, but advances in digital technology have made funding their ventures easier than ever.
Here are some ways technology is helping entrepreneurs in these markets.
Crowdfunding solutions have made it easier for entrepreneurs to raise capital through “micro-investments.” While crowdfunding was initially developed for people in the United States and Europe, it may make an even bigger impact in developing economies. According to the World Bank, some micro-lending platforms such as Kiva specialize in serving third-world economies. The World Bank reports that the average loan on Kiva is $454, which is enough to get many small businesses in these countries off the ground.
Cryptocurrencies have also opened new doors for businesses in emerging markets. In 2014, DNA India reported that the first bitcoin only store had been launched in India. Other emerging economies are relying on cryptocurrencies as well.
Here are some benefits:
- Investors are more likely to back businesses that can maintain a decent cash flow. Since many companies in developing markets can’t process credit cards, they need to accept bitcoin as an alternative. Collecting bitcoin payments makes it easier for them to get a strong enough cash flow to operate.
- Entrepreneurs can receive capital directly through cryptocurrencies. This is ideal for entrepreneurs looking for capital from investors that want to remain anonymous or are hesitant to trust recipients in other countries with their financial information.
- Cryptocurrencies have lower transaction costs, which reduces the barriers to entry for many companies in emerging markets.
As bitcoin, litecoin and other cryptocurrencies become more popular, more entrepreneurs in emerging markets will be able to get the funding they need.
Before any company can get funding, they need to show that they have an effective, cost-efficient business model. Entrepreneurs in third-world countries often have difficulty financing costly tools that they can use to get capital-intensive businesses running.
Fortunately, they don’t need to spend a lot of money. Blogger outreach services and other content marketing tools allow these businesses to get started with very small budgets.
Technology is Creating Many New Opportunities for Emerging Entrepreneurs in the Developing World
Developing economies around the world are more dependent on technology than ever before. Entrepreneurs are using newer, more sophisticated technology to get the funding they need to get their businesses off the ground. What new technology will aid them in the future? Only time will tell.