Helping Fountain Gate Academy to improve private education in Tanzania

Founded in 2007, Fountain Gate Academy started its activities with a nursery and primary school in Dar-es-Salam. As the founder, Japhet Makao saw an opportunity he introduced a day-care service as well.

GroFin’s intervention helped the school to improve its finance department by implementing appropriate accounting software and assisted in hiring qualified staff for the department. The management information system (MIS) for the school has improved in terms of pupil academic data including results, progress, and financial reporting. MIS for the academic records is now available on a centralised school database using the reliable school software package.

Since several parents had moved to Dodoma, Japhet seized the opportunity to start a new branch there. GroFin helped the entrepreneur to formalise the land ownership of the Dodoma campus. The school also managed to get the Certificate of Right of Occupancy at the Dodoma Campus in the name of Fountain Gate Academy. As part of GroFin’s business support, we helped the school improve its architectural dining drawing to be ready for the construction of a high-quality dining hall. GroFin also recommended putting up an ICT laboratory so that students can learn ICT at a young age.

Since COVID-19 struck, all schools had to close their doors, leaving Fountain Gate without revenues from March 2020 to July 2020. Japhet explains that most parents are still in arrears on the payments for the period though they are trying to ensure payment for the new terms is paid. Fountain Gate continued salary payments to the staff during the school closure which had a significant impact on its operating cash flow. With guidance from GroFin, Fountain Gate managed to reduce unnecessary operating expenses, freeze salary staff increment, establish all health recommended infrastructure for COVID-19 precaution before reopening of schools.

“My dream for the future is to establish a special talent school and expand Fountain Gate footprint to other regions of Morogoro and Arusha,” – Japhet Makao, Founder of Fountain Gate Academy

Realising the dreams of a fashionista entrepreneur in Tanzania

Binti Africa, a textile manufacturing business located in Dar es Salam, is specialised in corporate uniforms, African print attire, handbags, and other accessories. The business was incorporated in 2011 by fashionista entrepreneur, Johari Sadiq, and employs 15 people.

Johari approached GroFin in 2016 for working capital needs and to set a new factory with modern machinery.

“My dream is to become the leading supplier of uniforms to the private and government agencies. Also, to export the African attires to foreign markets and probably having my boutique stores in some of the fashion cities such as Johannesburg,” – Johari Sadiq, Owner of Binti Africa

GroFin’s business support to Binti Africa has been to ensure the business has a proper financial management system in place: Binti’s financial records, cash flow management and internal control have all improved by adopting the right accounting software. GroFin also assisted Binti to put in place a project management team for the construction of their workshop. The workshop is large enough now to accommodate the entire production process in an upmarket location. Besides, GroFin has ensured that Johari put in place a succession plan.

Finally, one of GroFin’s major interventions has been to assist Johari in getting a reliable supplier for a state-of-the-art machine and reliable fabric suppliers at a better price from India and Bangladesh. The new procured machine allows for quick finishing and better quality of uniforms and Binti can display a wider variety of collections. Johari has now started online sales for her African attires and is exploring new market segments (school uniforms) as per advice from her GroFin Tanzania Investment Manager to diversify the market and reduce concentration risks on the corporate uniform line.

All in all, Binti’s liquidity and cash flow have drastically improved, and the income base has widened because Johari is no longer dependant solely on tenders for corporate wear. She has machines that have fewer breakdowns and produce higher quality outputs, with fewer rejects, and more options.

Nevertheless, when COVID-19 struck, Binti Africa was severely affected just like any other small business in Tanzania. The impact of the pandemic on the business has caused severe liquidity problem and delay in the delivery of raw materials. Soon enough, Binti Africa could not meet its obligations towards its clients, causing the business to close the production department and provide compulsory leave to its employees.

To curb the impact of COVID-19 on the business, Binti started shifts to observe social distancing. Johari had to keep regular contact with her corporate clients as well as suppliers and add up freight cost to speed up the delivery of raw materials.

Former President Jakaya Kikwete visits Binti Africa Clothing Workshop

Former president Jakaya Kikwete has urged Tanzanians to support the local fashion industry and praised local fashion houses for producing high-quality clothing of international standards.

Mr Kikwete made these remarks during a recent visit to Binti Africa in February, the fashion house from which he has been buying his vintage African print shirts since his presidential tenure. Binti Africa specialises in the production of clothing from African textiles. It is the only fashion house styling the officials of the Tanzanian Government, with the current vice president of Tanzania, Honorable Samia Hassan Suluhu, among its clients.

Mr Kikwete was very impressed by Binti Africa’s workshop and the creativity and quality of its current designs. He congratulated Johari Sadiq, fashion designed and CEO, on being self-employed and for producing top-quality clothing which can compete in the global market.

Johari Sadiq, CEO of Binti Africa and GroFin Tanzania Entrepreneur

Johari Sadiq, CEO of Binti Africa and GroFin Tanzania Entrepreneur

Mrs Sadiq founded Binti Africa in 2009 at the age of only 23, but with no business background or experience in the fashion industry she struggled to access finance to grow the business. 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.

But Mrs Sadiq’s passion for fashion led her to persevere and 2016 she obtained the finance she needed to set up a modern factory from GroFin, a pioneering private development financial institution which specialises in financing and supporting small and growing businesses across Africa and the Middle East. GroFin provided Binti Africa with funding to acquire modern equipment and high-quality fabrics which enabled it to create the exquisite garments it has become known for.

“My advice to other women entrepreneurs is to never be afraid of failure. Massive failure leads to massive success. Take risks, be open to learning lessons and take criticism well. Believe in yourself, because what a man can do, a woman can do just as well,” Mrs Sadiq said about her journey as a women entrepreneur during an interview with GroFin last year.

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.

Impact Investing & Education–Learning to make a difference in Africa

Africa’s education story is waiting to be written, but whether it will be written by Africa’s children is a pressing question that haunts the emerging continent.

Consider this – Sub-Saharan Africa (SSA) still has 30 million children out of school, and tertiary education is suffering from severe capacity constraints. SSA is also the worst-performing region globally for educational quality and learning outcomes, with up to 40% of children not meeting basic learning outcomes in literacy and numeracy. Moreover, by 2035, the number of Africans joining the workforce (15–64) will exceed that of the rest of the world combined, but SSA’s education systems are not meeting workforce needs.

Sounds like a challenge for any government? It certainly is, and one that no government can possibly rise to. A report highlighting the key role that the private sector is poised to play in Africa’s education landscape then comes as a fitting response to this challenge, replete with a powerful foreword by Liberia’s President, Ellen Johnson Sirleaf.

This definitive report by Caerus Capital is aptly titled “The Business of Education in Africa”, focusing as it does on the contribution of the private sector and on how government can act as the steward of the whole education system.

“The Business of Education in Africa” paints the current landscape of private education in Sub-Saharan Africa, goes on to discuss how African governments can better engage with private education players, highlights opportunities for investing in private education in SSA and delves deep into case studies of interesting companies in education in SSA. It ends with case studies of the education market in South Africa, Nigeria, Kenya, Ethiopia, Senegal & Liberia that may well be some of the most comprehensive insights into the education markets of these key African economies as on date.

While Sustainable Development Goal (SDG) 4 mandates that governments have and must continue to commit to access to a free, quality education for children, statistics highlight that around one billion African children will need to be educated over the coming three decades. Keeping pace with this demand requires enormous investment in schools, universities, and other infrastructure; recruitment and training of teachers, school leaders, and support staff; and learning materials. Public education systems will struggle to keep up with this unprecedented increase in demand.

Private sector education is then key to unlock the potential of this vital sector, and meet the rising tide of demand that otherwise threatens to engulf the continent’s children in a sea of darkness.

The report notes that the private sector is already playing a significant role in SSA. While publicly reported data compiled by UNESCO indicates that the private sector has a share of 13.5% in the education sector across 15 countries, the report’s own surveys indicate that the actual share of private schooling might be 21% (or one in five pupils), and this number is only set to rise (to one in four) over the next five years.

However, this enormous opportunity comes with the significant challenge of financing private players in education, with the report identifying a private investment requirement of US$16–$18 billion over the next five years.

The report highlights that education makes for a compelling investment opportunity because it delivers wider benefits in the form of high individual, social, and economic returns, and investors & donors are consequently willing to secure lower financial returns, or even a purely social return on investment.

Impact investing that focuses on social returns over purely financial returns then comes to mind as a lasting solution to the financing woes of private sector schools. While impact investing is a nascent field and impact investors in Africa are few and far between, some stories of positive change in local communities are already being written.

Be it Kenya’s Nairobi International SchoolTanzania’s Daystar SchoolRwanda’s Highland SchoolGhana’s Firm Foundation or South Africa’s Zambesi Akademie, these small businesses hailing from across the African education landscape have one strong link that binds them all — GroFin.