Data without insight: Why small businesses under-invest in record-keeping — evidence from Kenya
Although most SMEs in sub-Saharan Africa recognise the value of business records, nearly 40% record information infrequently or not at all, with difficulty turning raw data into useful insights a key barrier. A randomised experiment in Nairobi found that a smartphone-based POS app with automated analytics increased daily record-keeping by 7-9 percentage points, particularly among resource-constrained entrepreneurs. App users also improved inventory management, diversified their stock, and increased daily sales, suggesting that tools which help businesses learn from their data can be more effective than record-keeping training alone.
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Ashraf-Lyons-Policy-Brief-May-2026.pdf
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- Most small and medium-sized enterprises (SMEs) in sub-Saharan Africa recognise the value of keeping business records, yet nearly 40% do so infrequently or not at all. The primary barrier is not data collection but the ability to extract useful insights from raw data.
- A randomised experiment in Nairobi shows that a free smartphone-based Point-Of-Sale (POS) app with automated analytical summaries increased daily record-keeping by 7-9 percentage points compared to the same app without the analytics feature. This is equivalent to 12-15% of the baseline prevalence of daily record-keeping.
- Effects are larger among entrepreneurs who cited time constraints and difficulty as their main barriers to record-keeping—the most resource-constrained businesses—than among other entrepreneurs. This suggests that the inability to translate raw data into actionable insights might be a real barrier to record-keeping and learning among entrepreneurs in developing countries.
- Compared to businesses that received no app, app users showed markedly better inventory knowledge, a more diversified inventory portfolio, and significantly higher daily sales, suggesting meaningful changes in business strategies.
- Training entrepreneurs to keep records is not enough. Policymakers and development organisations should invest in tools that help entrepreneurs learn from their data, not just collect it.