How technology is changing small traders’ lives
TANZANIA: ACROSS the country, informal markets remain the heartbeat of local commerce. From Kariakoo in Dar es Salaam to regional markets in Morogoro, Mwanza, Mbeya and Arusha, millions of small traders earn their livelihoods through buying and selling goods and services.
These entrepreneurs, often operating outside formal regulatory structures, contribute significantly to employment creation and household incomes. Yet despite their economic importance, many informal traders continue to face challenges related to limited access to finance, market information, business records and modern technologies.
As the country advances its digital economy agenda, an important question emerges: Can digital transformation empower the country’s small traders and unlock greater economic opportunities?
The answer is increasingly becoming yes.
The rapid growth of mobile phone ownership and internet connectivity has created unprecedented opportunities for informal businesses.
Today, many traders use mobile money platforms to receive payments, send money to suppliers and conduct transactions without relying solely on cash. This shift not only improves convenience but also enhances security by reducing the risks associated with carrying large amounts of cash.
Digital payment systems have also enabled traders to build transaction histories that may eventually help them access formal financial services. Traditionally, many informal traders struggled to obtain loans because they lacked collateral or documented business records.
However, digital transaction data can provide alternative evidence of business activity and creditworthiness, making it easier for financial institutions to assess potential borrowers.
Beyond payments, social media platforms have become powerful marketing tools. Small traders now advertise products through WhatsApp, Facebook, Instagram and TikTok, reaching customers far beyond their immediate locations.
A clothing vendor in Dar es Salaam can promote products to buyers in Dodoma, Zanzibar, or even neighboring countries. This expanded market reach reduces geographical barriers and creates new avenues for business growth.
Digital technologies also support better inventory management and record keeping. Simple mobile applications can help traders track sales, monitor stock levels and manage expenses. Such information enables business owners to make informed decisions, identify profitable products and improve overall efficiency. For many traders, digital record keeping serves as a stepping stone toward formal business management practices.
Despite these opportunities, significant barriers continue to limit digital adoption among informal market participants. One major challenge is digital literacy. Many traders possess smartphones but lack the skills needed to fully utilise business applications, e-commerce platforms, or digital financial services. Without adequate training, the benefits of technology remain underutilised.
The cost of internet access and digital devices also presents obstacles. Although smartphone prices have declined over time, acquiring quality devices and maintaining regular internet subscriptions can still be expensive for small-scale traders operating on thin profit margins. For some entrepreneurs, these costs compete directly with essential business investments such as inventory purchases.
Trust and cybersecurity concerns represent another challenge. Cases of online fraud, digital scams and unauthorised transactions have created apprehension among some traders. Building confidence in digital systems requires stronger consumer protection mechanisms, effective dispute resolution processes and continuous public awareness campaigns.
Infrastructure gaps further complicate digital transformation efforts. While urban areas have experienced substantial improvements in connectivity, some rural and peri-urban markets continue to face unreliable internet services and limited access to digital support systems.
Ensuring equitable access to technology requires investments that extend beyond major cities.
To maximise the benefits of digital transformation, collaboration among government institutions, financial service providers, technology companies and development partners is essential.
Targeted digital literacy programmes can equip traders with practical skills in mobile banking, online marketing, bookkeeping and cybersecurity. Financial institutions can design affordable digital products tailored to the needs of micro and small enterprises.
Meanwhile, policymakers can create supportive regulatory environments that encourage innovation while protecting consumers.
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There is also a need to strengthen digital infrastructure and promote affordable internet access. Investments in connectivity can help bridge the digital divide and ensure that traders across Tanzania benefit from emerging technologies. Equally important is the development of local digital solutions that reflect the realities of informal markets and are accessible in both English and Kiswahili.
The future of Tanzania’s informal economy will increasingly be shaped by technology. Digital transformation is not a substitute for entrepreneurship, hard work, or market knowledge. Rather, it is a tool that can amplify these strengths by improving efficiency, expanding market access and creating pathways to financial inclusion.
As the country pursues its broader development ambitions, empowering small traders through digital innovation is not merely a technological objective, it is an economic necessity. If supported by the right policies, infrastructure and skills development initiatives, digital transformation can help informal traders move from survival-oriented enterprises to more productive and resilient businesses.
The question is no longer whether technology can empower Tanzania’s small traders. The real challenge is ensuring that every trader has the opportunity, capacity and confidence to participate in the digital economy
