Empowering SMEs Through Data-Led Segmentation

A methodology focused on practice 

AMI has developed an evidence-based approach to business support grounded in two core research-backed theories: the implementation of effective business practices, as well as a focus on building entrepreneurial grit and agency to implement the practices. This research12 has shown that small and growing businesses that implement core business practices (or ‘habits’) have better survival and growth rates.

Our entrepreneurship programmes have resulted in tangible business impact with proven SME growth and improved survival rates, generating increased livelihoods for themselves and their communities. In 2023, 39% of businesses that completed AMI’s flagship Grow Your Business programme within 4 years prior accessed capital, and we created over 3000 jobs. Our entrepreneurs reported average revenue growth of 19% in 2023. For every $1 spent on AMI SME programmes in 2023, there was a 48x return in SME revenue, and $12 was put in the hands of African SME employees. 

Investing in a women-first learning design 

We have designed a learning methodology that represents a “women-first” design. We constantly review our sex-disaggregated data to ensure we are adapting our programmes to meet the needs of women entrepreneurs, and this has allowed us to reach near gender parity with 50% of our SME programme participants being women in 2023. Our deep dive into data has also enabled us to quantify the outsized impact of investing in women entrepreneurs. We have found that women entrepreneurs not only create more jobs for women, but they also create more jobs compared to their male counterparts.

An in-depth study of entrepreneurs completing AMI programmes found that 72% of women entrepreneurs reported a female headcount of over 50% compared with 42% of male entrepreneurs reporting a female headcount of over 50%. Significantly, 50% of female-owned agribusinesses accessed finance after AMI programming compared to 40% of male-owned agribusinesses. While 47% of our women-owned agribusinesses reported revenue growth, compared to 36% of male-owned agribusinesses. In 2024, we released an insights paper capturing our learnings from supporting Africa’s women-led SMEs over 10 years, titled: Green shoots for African women entrepreneurs.

1 McKenzie, D. & Woodruff, C. 2015. Business Practices in Small Firms in Developing Countries. World Bank Development Research Group. Policy Research Working Paper 7405

2 Bloom & Van Reenen, 2007; Bloom, Eifert, Mahajan, McKenzie and Roberts, 2013; McKenzie & Woodruff, 2015 

Empowering SMEs Through Data-Led Segmentation

Our data-led SME segmentation approach is designed to strategically group businesses into meaningful categories, allowing for targeted and impactful interventions. This systematic process begins by defining clear objectives, such as improving access to financing, designing customized capacity-building programs, or addressing underserved SME segments. By aligning segmentation variables and data collection methods with program goals, we ensure precision and relevance. 

The next step involves comprehensive data collection to provide a 360-degree view of the SME landscape. We combine primary data—through surveys, diagnostics, interviews, and onboarding questionnaires—with secondary sources like government reports, industry studies, and trade association insights. Additionally, digital data, including website analytics, social media activity, and behavioural metrics (e.g., loan repayment rates and technology adoption trends), offers deeper insights into SME behaviour and needs. 

Using this data, we define key segmentation variables to capture the diverse profiles of SMEs. These variables include: 

• Demographics: Revenue, employee count, and business stage. 

• Behavioural patterns: Technology adoption, market focus, and financial habits.

• Geographic factors: Urban versus rural dynamics. 

• Psychographics: Growth orientation and risk appetite. 

• Challenges: Barriers such as access to financing, skills, or technology. 

With these variables, we apply advanced analytical tools to identify actionable SME clusters. Methods such as descriptive analysis, clustering algorithms and predictive modeling reveal patterns and trends. For example, "Survival SMEs" may be identified as low-revenue, rural businesses requiring financial literacy and market linkages, while "Growth Aspirants" may represent moderate-revenue SMEs in need of scaling strategies and working capital loans. 

Once segments are clearly defined, we design tailored interventions to address their unique needs. For instance: 

• Survival SMEs: Microloans and support for formalizing business operations.

• Growth Aspirants: Asset financing and operational efficiency training. 

• Export-Ready SMEs: Trade finance, risk management tools, and certification assistance. 

Our process doesn’t stop there. We continuously measure and refine the segmentation model by tracking key performance indicators (KPIs) such as loan repayment rates, revenue growth, and market expansion success. This feedback ensures the segmentation evolves with changing business dynamics, staying relevant and effective. 

This data-led approach unlocks several benefits: 

1. Precision: Tailored solutions that directly address SME-specific needs. 

2. Efficiency: Optimized resource allocation to focus on high-impact segments. 

3. Insightful Decision-Making: Strategies are informed by real-world data. 

4. Scalability: The model can adapt and grow as new data becomes available. 

By employing this innovative and flexible methodology, we empower SMEs to overcome challenges, scale sustainably, and thrive in an ever-changing economic landscape. This approach ensures maximum impact for all stakeholders involved, from funding organizations to SME beneficiaries. 

Example of AMI segments and their needs:

Segment Name	Description	Key Needs
Survival SMEs	Early-stage, low revenue, informal  businesses in rural areas.	Basic financial literacy, market linkages.
Growth Aspirants	Moderate revenue, expanding operations, adopting basic technologies.	Working capital loans,  scaling strategies.
Export-Ready SMEs	Established businesses focusing on international markets.	Certification support, trade finance.
Start-up Strivers	Newly established businesses seeking their first customers.	Seed funding, business model validation.
Agri Innovators	Agriculture-focused SMEs adopting modern techniques.	Equipment financing,  training on modern farming.
Retail Pioneers	Small retailers focusing on local markets.	Inventory financing,  marketing support.
Tech Trailblazers	SMEs leveraging digital tools to disrupt traditional industries.	Technology investment, market expansion.
Service Specialists	SMEs delivering niche or high-value services.	Skill development, client acquisition support.
Rural Builders	SMEs operating in rural areas and driving local economic growth.	Infrastructure support,  logistics optimization.
Scaling SMEs	Businesses entering new markets or increasing production capacity.	Expansion loans, operational efficiency training.
Innovation Leaders	SMEs focused on R&D or innovative product creation.	R&D funding, partnerships for scaling.
Local Heroes	SMEs with a loyal local customer base.	Community engagement support, small grants.
Urban Upstarts	SMEs leveraging urban infrastructure to grow quickly.	Digital marketing,  networking opportunities.
Digital Adopters	SMEs transitioning from manual to digital operations.	Training on digital tools, platform integration.
Investment-Ready SMEs	Businesses with strong financial records, preparing for major growth.	Equity investment, strategic planning support.