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Plunging Into the Digital Economy, but Still Tied to Cash: Lessons from the Small Firm Diaries

The 2021 Global Findex found that Covid has driven growth in the use of digital payments worldwide, including a bump in digital payments to merchants. The Small Firm Diaries is studying the financial lives of small firm owners in 6 countries, giving us the opportunity to look closely at how these global trends are playing out in the lives of small firm owners, suppliers, employees, and customers. In this video, we take a deep dive into the accounts and transactions of a handful of firms in Nigeria and Colombia—where there is a lot of potential for increased digital usage, but also at times a puzzling lack of uptake—as well as Kenya. For example, even where business owners are comfortable using digital transfers, often into multiple different accounts, nearly all continue to use cash for certain purposes and transactions. We’ll use data from this ongoing 12-month global study to tell the story of small firms straddling the borderlands between the cash and digital economies.