Using edtech to empower Mexico’s small businesses to succeed

How access to learning platforms helps Mexican microentrepreneurs to build thriving businesses

Author: Tannaz Daruwalla

Many microentrepreneurs like Angelica are hindered by a lack of knowledge of or access to simple, user-friendly digital and financial tools that can help them juggle their many responsibilities and run efficient, successful businesses. Many also remain excluded from or hesitant to participate in the formal financial system due to a lack of trust and cannot benefit from financial products and services that can support their business growth. As much as 40 to 60 percent of credit applications in Latin America are rejected by financial institutions, contributing to this distrust. While the shift to digital over the past several years is connecting more micro and small enterprises to financial services than ever before, those like Angelica can be left further behind if they don’t have the skills to manage their business successfully or the confidence to use digital tools, have no digital footprint, and therefore, no access to capital.

Accion, with support from FedEx, launched Ovante in 2019 to help MSMEs strengthen their managerial, financial, and digital capabilities so they can thrive in an increasingly digital world. By empowering business owners with knowledge and skills through an online educational platform, Ovante helps them change the behaviors that are preventing them to expand their businesses and make more informed decisions while building confidence in their skills as business owners to help them to build a more secure future.

We first piloted the Ovante platform in Colombia, expanded further in Latin America, and recently introduced the platform in India. Now, we’re building on this collaboration with FedEx to bring Ovante to Mexico and reach MSMEs that remain financially excluded and help raise their profile as potential customers among financial service providers. As MSMEs use the platform, they may boost their efficiency and profitability, helping to make them more creditworthy. For financial institutions, Ovante provides insights into their customer base – allowing them to prospect new customers and better understand their existing customers’ needs and behaviors.

Improved digital proficiency leads to positive business outcomes

Ovante’s success in existing markets has shown significant improvements in users’ digital capabilities as well as confidence in their business. A survey of platform users in Ecuador and Colombia found that just starting a module on Ovante led to positive behavior change with regard to their personal and business finances. Those surveyed who completed learning modules indicated notable improvements in these areas in the last six months. For instance, more than half of respondents said they are now using the internet more frequently for financial transactions and operations. Half of those surveyed who completed modules on Ovante also reported increased cash flow, more than 60 percent said their satisfaction with their business improved, and nearly 75 percent have established a monthly savings goal. With Ovante’s expansion into Mexico, more MSMEs will gain access to formal financial services like credit, which, when paired with tools to increase digital and financial capacity, can transform users’ businesses even further.

With its customer-centric design and data-driven approach, the Ovante platform meets microentrepreneurs like Angelica where they are and provides the right tools to overcome the behavioral barriers and knowledge gaps that prevent them from increasing their revenues and help them boost their businesses. With Ovante’s expanded footprint into Mexico, Accion is excited to help the country’s micro and small businesses thrive and continue to drive economic growth.

For more information about Ovante, please email tdaruwalla@accion.org

Financial inclusion, a path to success for Mexico’s micro and small businesses

Ovante’s expansion into Mexico will create new pathways to success for Mexican MSMEs, which play a critical role in the country’s economy. Report findings from Economist Impact indicate that due to the number of MSMEs in the country and their geographic spread, particularly in rural areas and small towns, these businesses are essential to Mexico’s economic growth. Micro and small business owners with limited digital capabilities will benefit from targeted programs like Ovante — which is free of charge— that not only provide information and training on available digital tools to help them transition to digital commerce and grow, but also improve Mexican MSMEs’ access to capital and other financial products and services by their usage of the Ovante platform.

The platform’s aim is to reach MSMEs that are “invisible” to financial service providers and offer institutions the opportunity to know their customers better. The data that the platform captures can be leveraged to identify users who could benefit from financial products and services and potentially offer access to credit to MSMEs who have otherwise been unable to participate in the formal financial system. This information will allow financial service providers, fintechs, and other institutions to introduce credit products to the MSME segment, with the confidence that these business owners have developed the knowledge and skills to use credit responsibly in their businesses.