Evidence Brief: Marketing and Entrepreneurship in Low-Income Countries

Most businesses in the developing world are informal, small and locked in a no-growth cycle of low sales and low profits. Improving access to management tools for small businesses is one way to help entrepreneurs.

Key Points: 

• Most businesses in low- and middle-income countries are informal, small and locked in a no-growth cycle of low sales and low profits. Research is uncovering ways to help entrepreneurs break out by improving their access to managerial capital through practical business training, consulting and coaching programs, as well as their access to financial capital via appropriate loan products.
• One promising approach is to complement traditional business skills programs, which tend to focus on financial records and operational efficiency, by offering firm owners personal initiative training or one-on-one remote coaching to provide business support services in which entrepreneurs also focus on growing sales (e.g., by innovating or changing their product offering, understanding and attracting new customers, or expanding into new markets).
• In the developing world, the positive returns to borrowing are often high for small businesses and yet many entrepreneurs may be afraid to take on debt given the pressures they face to divert funds to non-business purposes. Innovative loans products may help overcome these pressures and the reluctance to borrow.