Benin man demonstrates a mobile business app. / © Government of Benin
Situation
Paper-based administrative procedures are characterized around the world by long queues outside government offices, frustrated users and the thump of rubber stamps.
But the reality can be worse, with the need to visit many different government departments, a bewildering array of forms mostly asking the same information, repeated demands for certified copies of identity documents, long waits for procedures that could be automatic, and occasionally requests for bribes.
The time taken and the cost to pay an agent to deal with the paperwork can at best deter and at worst put creating a legal business out of reach. This results in many developing country SMEs and workers left in the informal economy, unable to access loans or insurance, lacking legal protections, and contributing neither taxes nor social security.
But it can also lead to political instability. A World Bank study after the Tunisian revolution, which was in part driven by youth unemployment, found that one-third of young entrepreneurs in the country had difficulties accessing finance because of the administrative burdens associated with company creation.
Administrative barriers are not limited to developing countries. A report by the US Office of Management and Budget calculated that in 2015, Americans spent 9.78 billion hours on federal paperwork.
In Benin, entrepreneurs were required to line up at an agency office, fill in 5 paper forms and hand in up to 12 documents, including prior notarized copies. A fee was payable by cash, and certificates were collected five days later.
Approach
The country launched an online business registration platform - monentreprise.bj - just before the COVID-19 crisis took hold in early 2020. Entrepreneurs can use the platform to register businesses online by entering information, photographing and uploading identity documents, and paying fees by credit card, all within 10 minutes. Two hours later, the entrepreneur receives an email with certificates of incorporation, and the business is formally registered.
Impact
Company registration in Benin doubled in the two years following installation of the online business registration platform. One third of these entrepreneurs are women, half are under age 30, and half are from outside the capital city.
Governments are able to check documents and approve company applications from their home, keeping to the two-hour benchmark.
“During the pandemic the platform also helped those who had lost other sources of family income, as well as vulnerable rural populations, to set up their own business,” said Laurent Gangbes, who runs Benin’s investment and export Promotion agency (APIEx). “I am confident this will contribute to Benin’s post-covid economic recovery.” He also says the platform is changing the way government works.
“My staff now spend more time advising clients and less time pushing paper. They are happier and more productive. And we are collecting a lot of data on the private sector that will help shape our economic policy.”