The GroFin blog page showcases GroFin entrepreneur success and provides insights on how they have grown their businesses into successful SMEs.

Bugesera Agribusiness: Impacting bottom of the pyramid farmers in Eastern Rwanda

Opening a large business in an area where almost 50 percent of the population live below the poverty line might deter some of the hardiest business people, not so Mr. Christophe Kanyandekwe, owner of Bugesera Agribusiness Company Ltd, also known as BABC.

A mechanical engineer, Mr. Kanyandekwe bought BABC which is located in Gashora, Bugesera district, Eastern Province of Rwanda, in 2014. Prior to his acquisition the company which started operations in 2008 was run by a farming cooperative called Indakuki Cooperative. When Mr. Kanyandekwe bought the factory, he retained the 328 members of the Indakuki Cooperative as suppliers of maize kernels, as he did not want the members to lose their livelihoods.

Today BABC is the largest agribusiness in Eastern Province and it has supply contracts with 86 cooperatives who represent approximately 70,000 farmers. In a province struggling to deal with poverty and with people thinking about how they will put food on the table, companies like BABC provide a lifeline. Each of the farmers that supply the company through their cooperatives are at the very least assured of having a captive market for their products. As many Rwandan farmers are at the bottom of the pyramid, agri-businesses like Bugesera Agribusiness encourage local farmers to see farming as a viable enterprise.  This is important in a country where agriculture is a mainstay for thousands of families.

In the first quarter of this year, according to the National Institute of Statistics of Rwandaagriculture contributed 31 percent to the country’s GDPAgriculture is expected to play a vital role in reducing poverty and ensuring the country is self-sufficient in its nutrition needs.

Mr. Kanyandekwe is also a shrewd businessman in that he finds reliable buyers for his products. One of these buyers is Africa Improved Food Ltd., a company who is taking the fight against malnutrition in Africa head on. BABC signed a contract with the company to provide them with 600 to 1500 tons of soy beans a year for the next three years.

As BABC grew it found itself in need of finance and in GroFin it found a partner willing to help. GroFin, which has made a name for itself investing in small growing businesses(SGBs) has agribusiness as a sector of focus  across sub-Saharan Africa and MENA. Another large Rwandan agribusiness that GroFin supports is Yak Fair Trade. Therefore, partnering with a company like BABC made sense for GroFin. The financing allowed BABC to purchase new equipmentbuy additional raw materials and expand its warehousing capability. In addition to the financing the GroFin Rwanda team provided business support to BABC, which started pre-finance, when the company was advised to properly register its assetsPost finance the company received help on how to better structure its sales and marketing strategy. Additionally, advice was provided on production process automation, improvement of packaging system, and looking into export possibilities. To further help BABC, GroFin Rwanda will introduce BABC to PUM experts who will be providing advice on product certification.

Through GroFin’s finance and business support, BABC is able to sustain 62 permanent jobs of which 24 are held by women and 51 are low skilled/semi-skilled.

“Thanks to GroFin, I was able to expand capacity and make a greater impact in our province of Eastern Rwanda. I think agribusinesses in Rwanda must not hesitate to invest in our agricultural sector.” – Christophe Kanyandekwe

Giving Tanzania women entrepreneurs their place in the sun

Women entrepreneurs play a pivotal role in the private sector comprising microsmall and medium enterprises in TanzaniaWomen owned enterprises increased from 35%in early 1990s to 54.3% in 2012, according to estimates by the International Labour Organisation (ILO).

The ILO Women Entrepreneurs Survey 2014 revealed that 85% of women interviewed in Tanzania financed their start-ups from their own savings, mainly due to high interest rates and collateral requirements. It also indicated that access to business development services (BDS) is crucial for women entrepreneurs to strengthen their capacity to start, effectively manage and grow their business.

Apart from limited access to finance and business development services, women also face challenges unique to their gender, which may influence the decisions they make when starting or growing their business. Research shows that women owned enterprises do not grow at the same rate compared to businesses owned by men; most of them remain small. In Tanzania, of the 1.716 million women-owned enterprises estimated in existence by the ILO, over 99% are micro enterprises with fewer than five employees and almost three-quarters have only one employee.

We turned to three successful women entrepreneurs in Dar-es-Salaam whose businesses have grown with GroFin’s finance and support, to share their insights on what it takes for women to start and grow their enterprises in Tanzania.

First up, Ms. Johari Amour Sadik is the founder, head designer and owner director of BintiAfrica, which specialises in the production of clothing and accessories made from African textiles, with sales outlets at ADA Estate Kinondoni and at Mbezi.

Next is Ms. Edditrice Temba, who runs Mambo Jambo Tours and Travels located at C & G Plaza, Mikocheni B along Mwai Kibaki Road.

Rounding up the powerhouse trio is Ms. Anna Habib Mponezya, who powers Bahari Bakery, a multi-presence café and bakery with its flagship outlet at Kunduchi Beach, Kichangani.

Excerpts from a joint interview:

1. Research shows that most women-led businesses stay small. In your view, what holds back women entrepreneurs from growing their businesses?

Johari:  In my experience, cultural background, social and political territory provide the primary grounds for challenges that hinder women entrepreneurs from growing their businesses.

In our society, girls and boys are perceived and treated differently, and as they assume their place as adults, men are necessarily regarded as superior to women.

While I consider this thinking primitive, it exerts a major influence on our society and is responsible for the social prejudice directed against women. In short, it has been ingrained in our minds that women are better suited for work within the home and men are better at risk-taking.

Against this social backdrop, it is very challenging for women entrepreneurs to: –

  • Be strong enough to defy social expectations
  • Find mentors, preferably other women entrepreneurs, who can support and guide them in the start-up stage
  • Have access to sufficient or appropriate funding
  • Create or establish a proper networking system
  • Earn respect in this male-dominated industry
  • Balance work and family life
  • Overcome a constantly lurking fear of failure

Edditrice: To my mind, the main reasons women entrepreneurs stay small are as follows:

  • Very limited access to finance
  • Lack of adequate initial seed capital to start on a strong footing.
  • Lack of acceptable collateral as required by banks
  • Social stereotypes which tend to view women as weak business leaders
  • Lack of business networking – most women business owners face a challenge in building meaningful business / social networks which could easily translate into better business prospects for them.
  • Lack of entrepreneurial skills – most women start a business based on a passion that they have but once the business is up and running, they tend to fall back into the mundane routine of managing the business. In the process, they forget to upgrade their entrepreneurial skills through continuous education and knowledge within their specific industries.

Anna: As a primary challenge faced by women entrepreneurs in the path of growing their business, many of them do not have access to credit to support their business, largely due to cultural norms. For instance, to obtain credit, one must produce collateral, while many such collaterals are in the names of their husbands, or partners.

Another impediment is male chauvinism, due to which businesses owned by women are considered second-class.

2. Can you tell us about any gender specific challenges you faced in starting your business?

Johari: I started this business when I was only 23 years old. Fashion has always been my passion since childhood, therefore I never saw myself doing anything else apart from what I am doing now.

I have been employed twice but the idea of putting my talent and creative thinking on hold just to make a living in a corporate world was so unsatisfying that I decided to walk away and never look back. Thus, I took a huge leap of faith.

On this journey, some of the toughest challenges I faced as a woman entrepreneur were;

  • Lack of experienced mentors: I never had an experienced mentor to guide me and give me perspective. My family and friends were my support system and my mother was my closest mentor. Since none of them were experienced entrepreneurs, everything amounted to learning by doing which was very challenging indeed.
  • Access to funding: Who in his/her right mind will be willing to fund a 20-something female entrepreneur with no business background or experience in the world of fashion and only passion for her line of work? Besides having no capital or assets to put as collateral, no recommendations or influential people to vouch for her work?
  • Avoiding culture vultures: Some even wanted to take advantage of my age and feminism on the pretext of supporting me.
  • Establishing a proper network: I had to constantly prove my worth by working twice as hard as everyone else, rising beyond expectations, being very determined and never losing sight of who I am, where I came from and where I wanted to be.
  • Balancing work and family: While constantly working, it is hard to always be available for your family and friends. However, it certainly helps to have a supportive and understanding family that always has your back and a few close friends who share the same goals as you.
  • Constantly fighting the fear of failure

Edditrice: As a woman entrepreneur, I faced these specific challenges:

  • We lacked adequate seed capital to start on a strong footing. We had to grow gradually from ground up with initial capital and grow slowly but steadily by reinvesting profits back into the business.
  • Being a married woman, it was a challenge to meet men for business meetings, at least at the very start of my innings in the business world. So, it is fair to say that I too experienced some social stereotypes first hand.
  • Suffering from a do-it-alone mentality of trying to multi-task and do everything on my own.
  • Facing staff management issues in terms of retaining staff in the initial stages of the business, because, well, you are a woman and they tend to take you less seriously.
  • Lack of confidence, a predicament I believe many women would relate to.
  • Understanding the market and creating a niche for myself based on my business strengths, by overcoming perception issues against women business owners and getting stakeholders to focus on my business instead.

Anna: Dealing with regulatory bodies in Tanzania is hard if you are a woman. You are considered an outsider, making it comparatively hard to get permits.

3. What were the steps you took to overcome these challenges?

Johari: To get past these challenges:

  • I accepted the fact that this journey will be more than tough and no one would ever have compassion on me because I chose this path for myself. Moreover, society expected me to fail as a young, inexperienced woman, thus failure was not an option.
  • I surrounded myself with well-minded and focused people who constantly motivated me, advised me, pointed out my mistakes and grounded me.
  • I constantly set goals for myself, learnt from my mistakes, sought and listened to advice, listened to criticism and learnt from my peers.
  • I got involved in events and workshops, learnt the practices of the fashion industry and how it is evolving worldwide, thus continuously educating myself on latest trends and developments.
  • I created a proper networking base.
  • I constantly tried to perform beyond expectations with hard work and perseverance.
  • I stayed truthful to who I am, what I want and what my goals are.
  • I learnt to be aggressive and competitive.

Edditrice: I followed these steps to overcome my challenges:

  • Underwent training in business skills and people management skills.
  • Started attending more business networking events and exhibitions.
  • Involved my husband more in the business, rather than relegating him to the role of a silent partner.
  • Gained more confidence as a business owner as I realised that some of the earlier challenges were caused in fact by a general lack of confidence in myself.
  • Increased personal and business networks within and outside the industry.
  • As I gained more experience in the business, I also developed a better understanding of the market and the needs of my customers.

Anna: Persistence and perseverance were my arsenal in successfully overcoming my challenges.

4. Who has supported you on the difficult path of entrepreneurship?

Johari: I would not have been able to walk this path were it not for:

  • First and foremost, my family, which has constantly had by back by believing in me.
  • My closest friends – those who shared the same mindset and goals as me.
  • My team, which has played a significant role in every success the business has had and continues to have.

Edditrice: The following have been pillars of my support system:

  • GroFin, whose finance and support is a big boost. I can now clearly see my vision and dream of Mambo Jambo Tours and Travel becoming a respectable mid-sized corporate entity come to fruition.
  • My husband and partner, who complements my efforts and endeavours.
  • A few mentors within the tourism industry, whose insights and business advice have come to my rescue at the time I most needed them. I have also benefited in terms of having developed some very useful business relationships along the way.

Anna: I must appreciate the support of my husband, Habib Mponezya, in overcoming the hurdles that I faced on the challenging path of entrepreneurship. He supported me not only morally, but also financially where he could. My friends also motivated me with their ideas and suggestions.

5. What is the advice you would offer to other women entrepreneurs?

Johari: My advice to other women entrepreneurs is to never be afraid of failure. Massive failure leads to massive success. At the very least, you can never succeed in business without failing at some point. Take risks, be open to learning lessons and take criticism well. Work with others, educate yourself through books, social media or any other tool, but mostly, open yourself up to learn from your peers.  Believe in yourself, because what a man can do, a woman can do just as well.

Edditrice: I would like to offer the following tips to other women entrepreneurs:

  • You can achieve anything you set your mind to. Challenges eventually make you stronger and wiser as you overcome them and navigate your way to becoming an entrepreneur who commands respect.
  • Maintain your strong values and uphold quality standards. Remember, as a business owner, you are the brand ambassador of the company.
  • Build on relationships and business connections. No one succeeds alone. Relationships are a great means to win and retain customers for your business too. After all, business research shows that people like doing business with their friends.

Anna: Trust yourself. You can achieve anything so long as you persevere and take steps in the right direction. Also, once you have secured capital through credit, do not divert it to non-business expenditures.

So, can other Joharis, Edditrices and Annas expect to find their place in the sun anytime soon?

The future looks exciting indeed for women entrepreneurs in the region. The Global Entrepreneurship Monitor (GEM) 2016/17 Women’s Report finds that Sub-Saharan Africa leads the way in female entrepreneurship globally, with nearly 26% of the female adult population engaged in early-stage entrepreneurial activity in the region. Even more heartening is that almost 62% African women entrepreneurs said they started a business because they are taking advantage of opportunity, rather than out of necessity.

However, Sub-Saharan Africa also has the highest discontinuance rate – at 8.4%. As many as 56% of women entrepreneurs in the region cite either unprofitability or lack of finance as a reason for closing their business. At GroFin, we provide women entrepreneurs with pre-finance business support to make their businesses investment-ready, as well as widen access to finance for those eligible to receive our funding and post-finance business support.

With investments in 113 businesses owned by women and a third of the jobs sustained by our investees held by women, GroFin holds women empowerment central to its investment philosophy. If you are a woman entrepreneur looking for a combination of finance and support to take your business to the next level, we invite you to check if you qualify by filling our pre-assessment questionnaire here.

GroFin Rwanda deepens agribusiness reach in East Africa

After transforming Rwanda into a model for conflict-affected states, the Government of Rwanda is now focusing its reform efforts on a vital needs sector: agribusiness. What makes this sector so crucial is that over 75% of Rwanda’s workforce is concentrated in agriculture. Against this backdrop, GroFin is deepening its efforts to reach out to agribusinesses such as Yak Fair Trade Ltd, based in the Rwamagana district of Rwanda’s Eastern Province.

Yak Fair Trade Ltd was founded by entrepreneur couple Mediatrice Uwingabire and Janvier Gasasira in 2010. The agribusiness works hard to improve the quality of maize and beans, two of the most consumed staple foods of East African Community, through a project aimed at controlling quality from production to final consumption. The company has signed exclusive supply contracts with 65,000 farmers grouped into 52 cooperatives in Eastern, Southern and Northern Provinces, both ensuring grain supply for its own use as well as benefitting farmer livelihoods in its community. It also sells the surplus to other institutions such as the World Food ProgramAfrica Improved Food and UNHCR.

Besides, given the importance of animal protein as a readily available source of nutrition to low income households, Yak Fair Trade Ltd is also diversifying into the processing of quality cowsgoatrabbitfishpork, and chicken meat through a mini-processing plant that it has recently installed in Kigali-Nyarugenge. The plant relies principally on supplies from small holder farmers supported by the Girinka project. The One Cow per poor family or Girinka project is based on the premise that providing a dairy cow to poor households helps to improve their livelihood by commercialising dairy products. Since its introduction in 2006, more than 203,000 families have benefited from the programmewith a target of reaching 350,000 Rwandese families by end 2017.

In August 2017, Yak Fair Trade approached GroFin for finance to expand the milling capacity of its maize flour plant that currently produces at 40% of its daily production capacity. In addition, the agribusiness secured a sizeable new supply contract from Africa Improved Food (AIF) in mid-2017. A joint venture created in 2015 between Government of Rwanda and a consortium of four partners: Royal DSM, the majority shareholder, the Dutch Development Bank (FMO) and the British government’s development finance institution CDC Group; AIF produces high quality nutritious complementary foods for infants as well as pregnant and breastfeeding mothers.

In addition, for its meat processing venture, the company needed finance to purchase a distribution van with refrigeration capabilities for easy distribution of meat products to consumers within Kigali.

Apart from finance, GroFin is also assisting the business with conducting a detailed Environmental Impact Assessment and re-defining the duties and responsibilities of the main shareholders towards improved corporate governance.

GroFin’s capacity to extend business support to agribusinesses such as Yak Fair Trade has been enhanced by a grant from the USAID East Africa Trade and Investment Hub (the Hub)The grant will involve GroFin screening 200 agribusinesses and offering tailor-made technical assistance to promising SMEs across Rwanda, Tanzania, Kenya and Uganda, ensuring that many more agribusinesses such as Yak Fair Trade can benefit from this partnership between GroFin and the Hub.

Already, this grant has catalysed the creation of 55 skilled and semi-skilled jobs as well as sustained 16 existing jobs at Yak Fair Trade. Moreover, all 65,000 farmers that supply to Yak Fair Trade will benefit from the enhanced business value chain. Finally, our investment and support has high implications for women empowerment as the company is led by a female CEO and female employment stands at 43%.

With GroFin’s finance and support, we are set to deepen our reach to farmers, expand employment to four times the current levels, and improve food security for the community,” concludes Janvier, the company’s co-founder and Chief Operations Officer.

Millennial movement: Why the young are impact investment’s big hope

Even as ‘The Economist’ noted in an authoritative piece at the start of 2017 that impact investing has come of age, moving into 2018 it looks like the rise of impact investing is indeed an age-related phenomenon. Powering the growth of impact investing are the millennial youth, the freshly minted generation of the 1980s and 1990s, who are looking set to bring impact investments from the realm of ‘good-to-have’ to ‘must-have’.

Even as ‘The Economist’ noted in an authoritative piece at the start of 2017 that impact investing has come of age, moving into 2018 it looks like the rise of impact investing is indeed an age-related phenomenon. Powering the growth of impact investing are the millennial youth, the freshly minted generation of the 1980s and 1990s, who are looking set to bring impact investments from the realm of ‘good-to-have’ to ‘must-have’.

Acknowledging this change that is set to sweep through the impact investment world, ‘The Economist’ noted at the close of 2017 that the young are Impact Investing’s big hope. Having grown up in a digital age, millennials are both more exposed to the world’s woes, and more likely to use electronic investment tools. It then becomes clear for all to see that a powerful force for good which uses the best of modern technology to power its growth is unstoppable indeed.

And, where else would this change commence but from the education sector – an arena that reflects societal changes even before they take root in the real world. No surprise then that this millennial magic is already visible in the field of higher education. Under pressure from their alumni, several university endowments have promised to review their investment portfolios under a ‘socially responsible’ lens. Business schools are also reporting that classes related to Environmental, Social and Governance (ESG) investments are oversubscribed. With ESG being the new mantra of the impact investment world, an increase in ESG investments invariably indicates increased uptake of impact investing as a global phenomenon.

So, what is the size of this global force for good? Global consultancy firm Deloitte estimates that, by 2020, millennials may control up to US$24trn. The vast stores of wealth at their disposal, coupled with their optimistic belief that they can ‘change the world’, means that they are set to take the world of impact investment by storm.

This is backed up by a survey in America by Morgan Stanley that is found in their “Sustainable Signals” report for 2017 which examines the findings of an impact-investing-focused survey of 1,000 active investors across the age spectrum, and is a sequel to a 2015 report on the same theme.

Morgan Stanley’s survey found that millennials have underpinned the growth of the market for impact investing. From 2015 to 2017, those who said they were very interested in impact investing grew by 10 percentage points, to 38%. The report also noted that Millennials “are twice as likely as the overall pool to invest in companies or funds that target social or environmental outcomes. A whopping 75% millennials agreed that their investments could influence climate change, compared with 58% of the overall population. They are also twice as likely as investors in general to check product packaging or invest in companies that espouse social or environmental objectives. And, like children of every generation, they influence their parents – baby boomers who have large fortunes of their own.

Meanwhile, a 2016 survey by the Toniic institute, the global action community for impact investors with members in 26 countries, showed that millennials surveyed across 6 continents were indeed interested in impact investing. While some are taking a portfolio approach, others are considering how to align their careers and their philanthropic activities with their values and impact investments.

However, they also cited various challenges in the way of playing a more active role in the impact investment space. Overall, the survey concluded that millennials need more support to realise their impact objectives. While the young generation demonstrates a thoughtful, rigorous approach to impact investing, they need more access to tailored capacity building in impact investing as well as robust investment channels across asset classes. Finally, while they currently leverage their friends and investor networks to access the right causes and companies to invest in, they also want to collaborate more with their family members and advisors.

It is clear then that the millennial generation needs more information on the impact investing space as they take crucial decisions about partnering with organisations and joining forces for social change. Impact investors that possess deep insights and access into markets that are otherwise complex to understand and tough to reach, can then make it easier for the millennial generation to maximise their impact.

GroFin is one such organisation that has pioneered impact investing in emerging economies across Sub-Saharan Africa and the Middle East & North Africa (MENA). With a unique, award winning model that provides Small and Growing Businesses (SGBs) not only with access to finance but also tailored business support, GroFin manages various funds through which millennials and other investors can participate in the challenging yet rewarding impact investment space in Africa and MENA.

With a primary focus on vital needs sectors such as education, healthcare, agribusiness, manufacturing and key services such as water, waste and energy, GroFin has achieved a high impact footprint across its 15 locations of operation. To illustrate, GroFin has supported 8,750 entrepreneurs, financed 673 SMEs, helped sustain 115,580 jobs and improved the lives of 577,905 people as at 31 December 2017.

So, partner with us and become a part of this exponential movement to change the lives of entrepreneurs and communities across Africa and MENA.

GroFin Ivory Coast client expands digital education reach

Ivory Coast is facing challenges in catering for a rapidly rising labour force, counting 14 million workers in 2015 and poised to rise to around 22 million by 2025. As more and more workers enter the emerging economy, the issue is not so much employment for everyone, as it is to guarantee a decent wage. Indeed, an average worker in Ivory Coast earns the equivalent of US$200 a month, lower than the average in sub-Saharan Africa.

It is here that vocational education has a crucial role to play in imparting usable skills to the youth, such that they are able to secure their future and deepen their contribution to the national economy. GroFin’s clientEcole des Spécialités Multimedia d’Abidjan (ESMA), is one such vocational education provider that is using our finance and support to expand the reach of digital education in Ivory Coast, with the ultimate objective of upskilling youth across the West African Economic and Monetary Union.

Founded in 2006, ESMA is the first private school specialised in multimedia across Francophone West Africa and focuses on the provision of quality education to post-graduate students in the field of digital communicationsmultimediaaudiovisual and web development.

Licensed and regulated by the Ivoirian Ministry of Superior Education, ESMA has a total of 39 classrooms with 39 permanent teachers and 34 permanent and contractual administrative staff. The school started with 75 students in 2006 and presently has two campuses with a total student population of 900. With the acquisition of a new campus in 2016, the school has increased its capacity and can now accommodate 3,000 students.

The key entrepreneur behind ESMA is Mr Doumbia Vakaba, who is a computer engineer and has more than 25 years’ experience in the field of digital mediaprintweb services and business management. Apart from ESMA, Mr Doumbia also runs Cevenol International Primary School, triggered by his concern for the education of both youthand children. Located in Gonzagueville, Port Bouët, a neighborhood where most residents hail from the lower class, Cevenol provides affordable and subsidised basic and primary education to around 450 pupils currently.

n 2017, Mr Doumbia approached GroFin for finance and support to both refinance an existing short-term loan for the acquisition of ESMA’s new premises as well as adequately equip classrooms in the new campus to allow the school to cater for more students. Upgrading ESMA’s capacity will also enable the school to cover a second target segment of students in the regional market of the UEMOA (West African Economic and Monetary Union) zone which does not have such elite schools to offer vocational training in visual communications and multimedia.

Based on GroFin’s finance and support, ESMA will be in a position to increase its student intake for the 2018 academic year to 1,100, then 1,300 in 2019 and finally 1,500 for 2020in the medium term alone. A suitable moratorium of upto 6 months has also been provided to give the client a leeway to build and operate the requisite infrastructurebefore repayment starts, to avoid stress on cash flow.

“GroFin understood our requirements for both a longer tenor loan as well as aligned repayments with our cash flows by providing a much-needed moratorium. Their finance and support will go a long way in helping us to reach our target long-term intake of 3,000 students who will benefit from superior education and contribute at full capacity to the economic growth of our country,” says Mr Doumbia.