Jobs are the backbone of any economy, so it makes total sense that one of the main focuses of social impact investing is on job creation. But how do you do that?
Our answer is by granting entrepreneurs access to growth capital. But it’s a good question if it’s fair to grant a loan to an entrepreneur in Africa and make a profit. What do you think? Is it? Why not ask some of the entrepreneurs that experienced it first hand…
Prejudices in Impact Investing
First of all, we need to talk about prejudices. Let’s be honest, we all have them. Talking about African entrepreneurs, some of us will think of the pathetic image of a ‘poor black man holding up his hands to get some donations’. Others might think of Nigerian princes who promise you tons of money if you only first transfer € 1,000 to them.
And we get that. Throughout the years we’ve seen so many campaigns to donate money to the poor and we’ve heard so many examples of frauds that we can’t help to have become skeptical.
Hard-Working, Smart and Skilled Entrepreneurs
But it’s good to know that most of the African people are working hard to improve their lives. There’s a growing number of entrepreneurs. Hard-working entrepreneurs like the ones on popular TV shows such as “Undercover Boss”, ”Shark Tank" or "Dragon's Den”.
These entrepreneurs have the same passion and ambition, knowledge and skills. And the ability to make a profit with their small businesses. They're ready to take their success to the next level. That's why they start seeking capital investments. The only problem is access to affordable funding. In many African countries, it’s not uncommon to pay 50% interest per annum for commercial loans, against some other crazy demands.
The Stories of Emma Bekoe and Iddrisu Saweba
We are in Kasoa, a growing municipality on the edge of the Ghanaian capital Accra, to visit Emma Bekoe and Iddrisu Saweba. You can’t even imagine the crowd around the new market there. "Sometimes we have more than 200 customers in a day. Fortunately it is not a market day today, otherwise, I could not talk to you,” says Emma Bekoe, who runs a shop together with her daughter.
Emma comes from the Ashanti region in Ghana and has always had an own business. The Ashanti are known for their entrepreneurial spirit. Emma's mother was also an entrepreneur. "Like mother, like daughter," she laughs.
Iddrisu Saweba (34) is Emma’s neighbor. She was a teacher for years before putting in her own savings as starting capital to start Fairoozan Enterprise.
"I liked being a teacher, but I figured that with my own company I could get a better income and create a better future for my children.”
Iddrisu now has two stores and a warehouse.
Interest And Impact
In 2014, Emma joined Abii National, the Ghanaian local partner of Lendahand.
"I was looking for a chance to get a loan. But the banks I approached were unable to help me, their demands were absurd. Now that I’ve had my first loan my company is growing more than ever. I pay well below the interest that Ghanaian banks demand.”
“The costs for the loan are fair. Moreover, I like the flexibility in the amount that I needed. In this way, I could grow without taking too much risk.”
Although Iddrisu was already convinced of her own qualities, she does not believe she would have been able to experience such a rapid growth without a loan.
The Lendahand crowd that invested in these businesses received an interest of 3%. Both loans were repaid within 12 months.
Iddrisu does not regret her switch to entrepreneurship.
“Things are going well! I always dreamed of being independent. Without a boss and with the possibility to organize my own time. That suits me fine. Especially now, as a mother with three children. And in the meantime, I could create 3 new jobs!”
Emma was able to expand her activities. She now leases a second property, also in Kasoa and has hired 1 extra staff. Soon her new store will be up and running and she hopes to hire more staff soon, as the business keeps growing.
"I love working with young people. By investing in a job I invest in their future. They gain work experience, earn some money and use it to finish their school or study."
Join This Worldwide Movement Today
These are only 2 stories that show that our investments can make a difference, but we’ve heard so many more. Entrepreneurs from countries like Ghana, Kenya, Mozambique or South-Africa who are glad about the opportunity given.