Limited access to broadband is restricting the use of IT in developing countries, according to a report by the United Nations Conference on Trade and Development (Unctad).

Internet use continues to increase around the world, but developed countries still account for the dominant share of subscriptions, and the gap with developing countries in terms of broadband penetration has widened since 2002.

"E-banking and e-payments have real potential to improve overall business efficiency and assist in bringing small businesses and micro-enterprises into a more formal economy in developing nations," says the report.

But several developing countries – particularly those in Africa - are taking active steps to expand internet use through policies to improve IT access and skills, as well as regulatory reforms to increase competition and investments in IT infrastructure.

Countries with economies in transition – such as Belarus and Croatia - had the highest annual growth rate in internet penetration between 2002 and 2006, with 57 per cent and 35 per cent respectively, says the report.

The study also found that "m-commerce," the buying and selling of goods and services using mobiles, is expanding in rapidly in developing countries.

For example, the number of mobile phone subscribers in Ghana grew from eight per cent to 23 per cent of the population.