I am so glad I attended the inaugural Green Breakfast Club event in Nairobi last Friday. The keynote speaker for the event was TMS Ruge, a social entrepreneur who also works with the World Bank as a Climate Change Project Strategist. He is also the founder of Project Diaspora. Given my interest in environmental issues, I found the talk to be very timely and very informative. Climate change is real and it is here with us, whether we like it or not. Agriculture still remains as the sole source of income for many Kenyans, and our GDP relies heavily on agriculture. With that said, I believe that technological advancements have placed us (emerging markets) at a very good place. We can develop, and avoid the huge environmental mistakes that western countries have made in the process of developing their economies.
Ruge’s talk hit on various topics, but for me, two things stood out:
a) The need to push for market-based solutions to address climate change; and
b) The urgent need to focus even more energy and resources on value-addition in agriculture
Within the Connect4Climate, the World Bank has brought together partners who are working in African countries mainly in climate-change related work. The project is providing a platform for knowledge sharing where people, especially the youth, are able to share how climate change is affecting their day-to-day activities. It is my hope that within this exchange, solutions to mitigation and adaptation can be cultivated. This also presents a unique opportunity for startups to think of ways that they can use to push products and services that address these issues and also keep in mind the lifecycle of the product/service and how each stage can be greener and more efficient.
Climate change will continue to affect the extent to which agriculture can continue to serve as the major source of income in emerging markets. Access to international markets and export of mostly raw materials has meant that the income from exports remains low. Ruge is currently working with Moringa farmers in Uganda, through Uganda Medicinal Plant Growers, Ltd, whereby he buys the produce from the farmers, processes it and exports high value products. In this way, the farmers are able to get a higher income. The key point in this project, for me, is that it has created a local solution to a local problem, using a market solution as opposed to aid. It was a great talk and I hope those who are in Nairobi can attend the second talk which will happen in April.
To learn more about Green Breakfast club and to locate one near you, click here, and to learn more about TMS Ruge and his work click here.
It has been a week since Safaricom launched a new service mShwari. This is not a new service in Kenya. Jipange kusave had a similar approach whereby users were encouraged to save and could also borrow via mPesa. Pesapata has been providing emergency loans by using the many small shops where people buy products they need daily as the main distribution channel. In this case, a borrower obtains a scratch card from their local shopkeeper, the customer uses the code on the card to load money on mPesa, and it allows the user to access the loan. mPepea is also another startup offering emergency loans via mPesa. While all these small startups have to worry about the distribution channel, Safaricom obviously has an advantage since the mShwari platform is easily accessible under the Safaricom menu options on the phone. Airtel’s Kopa Chapaa, a partnership between Airtel and Faulu Kenya has also been around for a while. Airtel still has a very small market share, so their emergency loan service has a long way to go before it reaches the volume that Safaricom currently enjoys.
Image source: Safaricom
mShwari is a partnership between Safaricom and Commercial Bank of Africa (CBA). CBA owns the mobile banking platform, mShwari and as a bank, it is able to accept deposits and give loans. Safaricom was the best partner for CBA, especially because Safaricom has over 15 million mPesa users. Some of the metrics that Safaricom uses to determine the credit worthiness of the borrower include voice usage and the user’s repayment rate for outstanding loans. The new service will continue to address the financing gap that is often felt by the rural poor. mShwari distinguishes itself from other existing services in that the subscriber does not need to go to a bank and open an account; rather, they are able to access the service on the phone. I cannot use the service yet since I have been a subscriber for less than 6 months, but I have talked to some people who have been able to use it, and they have all said it has been mostly easy to use.
A few months ago, iHub Research published this great infograph on Innovation Spaces in Kenya. The infographic shows that there has been an increase in the number of places where entrepreneurs can get nurtured and really improve their ideas. It is also impressive to see the diversity in terms of sectors that are addressed and also the participants in the industry. Involvement of public institutions is especially impressive and it will be interesting to see what comes of the university incubators.
While this warrants excitement, I am left wondering what is being done to develop the entire ecosystem. For instance, what has the government done to ensure that the legal system is covering this new field? The patent application process requires the inventor to disclose all the aspects of the innovation. This is however useless if the people this is explained to do not understand the technology. The process will often be long, and unfruitful. So, to what extent has Kenya Industrial Property Institute educated itself on the different new technologies to ensure that intellectual property is protected? Do the entrepreneurs know of the resources available to them in these matters?
To patent or not to patent…..that is the question.
Strathmore University’s Law School has taken up this challenge with the opening of the institution’s Center for Intellectual Property and Information Technology Law (CIPIT). The training institute
“Provides practical courses and seminars initially targeting lawyers, business professionals, venture capitalists, media houses, and start-up incubators in areas of IP law, with a particular focus on issues unique to ICT. Example training topics include IP portfolio management, IP valuation, patent drafting and filing, and effective IP licensing.”
They also run a free IP Clinic for entrepreneurs, individual inventors, and start-up companies. To find out more about the IP Clinic, please contact the center.
It is great to see such progress and I hope there will be more of such centers and a greater involvement from the legal field, the government, innovation hubs, startups and other relevant stakeholders.
Greetings from Nairobi. Back from a long hiatus and lots to report. I am so impressed with what I have seen so far in regard to social entrepreneurship. The ecosystem is definitely growing both in numbers and experiences. It is great to see so many young people working on ideas that can better the lives of the poor in Kenya.
Just to highlight some events that have happened recently, Demo Africa took place in Nairobi and attracted quite a number of great enterprises. Have a look here. The list of finalists is a testimony of the rise of entrepreneurship and the increased attention of investors on Africa.
Some of the trends noted from Demo Africa include
- An increase in number of enterprises on hiring and HR management
- More online shopping applications
- Applications to leverage the power of mobile money
- More focus on integrating mobile technology with Agriculture.
- Low cost technologies to improve the education sector.
MKazi: one of the finalists; an online and mobile recruitment tool.
It is great to see such a diverse group of companies and it will be interesting to see the progress made over the next few years.
Next post will highlight the companies that are working to enhance the field of entrepreneurship in Kenya.
The unemployment rate in most developing countries remains high. Even worse, the youth unemployment rate continues to rise. How can we expect our countries to grow if the most productive population is underutilized? Our parents spend the last bit of their savings to educate us but when we graduate there are no jobs, and even the ones that are there go to the most connected. We, young citizens of developing countries need to put more focus on entrepreneurship as a way to create employment and to ultimately help change the status quo.
How can a country create a culture of entrepreneurship? The cost of doing business in many developing countries is often very high. Furthermore, the policy environment is in need of a big change. The move away from business as usual is needed.
Citizens of countries in the BOP need to invest in their own. The venture capital field in the BOP needs to expand, and we, the citizens of those countries need to be more active. We know and understand our environment and our needs. How about more investment in our people and their ideas instead of only looking at real estate and the stock market? We should not stop at just financial investments. The successful entrepreneurs ought to offer guidance and mentorship to those who are trying to enter the market. The academic environment also needs to participate and lay the much needed foundation in creating an entrepreneurial culture.
Source: The SEVEN Fund
It is time for venture capitalists, entrepreneurs and policy makers from developing countries to recognize their much-needed participation in addressing the needs of the world’s poor. Let us look beyond the traditional investments and help create a culture of entrepreneurship where we address our needs with creative market-based solutions. We need to have more faith in what the entrepreneurs in our countries can bring to the table and invest in our people.