Monday, 23 May, 2022

Data science in micro enterprise

Md Nazrul Islam

Data science in micro enterprise

The rise of digital technology changed the world fundamentally. Nowadays, IoT has profoundly impacted human kinds, production patterns, and lifestyles. In Bangladesh, we see that technology is grasping a way of livelihood day by day.

Out of a Total 166 Million population, some 123.74 million are internet users in Bangladesh, and Internet penetration is 72.01 percent, whereas mobile internet penetration is 67.26 percent in Bangladesh by July 2021.

Moreover, there are 50 million social media users, 38.5% of our total population live in urban cities. In Contrast, 61.5 percent of people live in rural towns. According to the Economic census 2013, there are about 13.7 million people involved with micro, 6.6 million with small, 0.7 million people with medium and 3.4 million people with large enterprises in Bangladesh. That means the MSMEs directly created about over 2 billion jobs.

As per the economic census 2013, we have around 8 million MSMEs in Bangladesh, According to the BTRC Internet penetration report November 2021, we have 67.25 percent mobile internet penetration as per this out of 8 million MSMEs, we get more than 5 million of them are under mobile internet connectivity.

Though such high mobile internet penetration in the country our MSME sector is still not that much digitized as a result day by day they are facing challenges such as umpteen accounting ledger in the shop.

The absence of digital guidance and training causes unawareness about market forces and insufficient digital adoption among remote area MSMEs. Supplier power is high on grocery merchants as they are not price-sensitive and uneducated regarding the product.

Another hindrance MSMEs face is that they have limited and complicated access to finance, a high-Interest rate in microfinance imposed by Banks and NBFIs. On the other hand, there is an absence of harmonizing tax and tariff policies for the MSMEs in our country. In the era of 5G still, most of our Merchant to Merchant (B2B) and Merchant to Customer (B2C) communication occurs physically which is highly costly in terms of time and money.

Nobody has explored the MSME sector by figuring out these cases. Data science can play a vital role in transforming enormous population power in our economy. We may help our MSMEs through data science by facilitating- Automatic guidance on digital bookkeeping and digital soc

Moreover, Depending on the availability of digital data of the MSMEs data science can significantly simplify MSMEs journey in ways like- Communicating regular business advice and preliminary intelligent reports on different time series to the merchants which will help them to remain competitive in the market, and increase the awareness of market forces. One of the good examples of market forces is supplier power (SP).

Application of data science on merchant’s digital data can help the supplier or distributors to digitally track their locations and cluster them using K-nearest neighbour (KNN), SVM, Decision Tree model based on their characteristics and geographic distance for the efficient distribution of required goods and services.

Micro financing is another area where data science can help both parties merchants and Lenders to come into a common and trustable negotiation. Here we are talking about the scope of data science in lending MSMEs: If we have an image of a shop and its stock we can easily predict business Inventory size and business type by analyzing the shop images using an artificial neural network (ANN) model. In case of slow recovery of lending money, we can communicate digital awareness, alerts and recommendations using AI on behalf of Banks and NBFIs.

Moreover, MSMEs often receive fraud notes in exchange for goods and services. Artificial Intelligence (AI) can help them to detect these cases easily by using their mobile phone with simple scans. Moreover, data science can help the merchants by automatically predicting potential churning customer base as well as suggesting proper retention paths with appropriate cross-selling and up-selling modalities.

We need high digital adoption among MSMEs which will generate big data and hence will enhance the scope of applying different data mining techniques. Policymakers and service providers can play a vital role in the digitisation of MSMEs by giving training in rural areas, offering special mobile and internet package facilities and In a few cases, they can apply certain strict regulations for recording data digitally for facilitating them in the long run.


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