Invest in Africa, IIA, is a Pan-African, private sector-led initiative working to empower Small and Medium Enterprises (SMEs) in the continent to create jobs. Since 2016, the platform has grown in leaps and bounds with over 2,400 SMEs and 245 women in business registered; supporting over 47,000 jobs; with more than Sh300M contracts won by SMEs through the platform. The organization’s country director spoke to NBM’s Victor Adar on achievements, opportunities, and what goes into business partnerships.
Is there room for growth of SMEs?
We believe that SMEs are the catalyst for the social and economic development of Africa and we are passionate about shaping the next generation of African global companies.
Our mission is to enable trade between multinationals, larger local corporates and Small and Medium Enterprises (SMEs) by enhancing the skills of SMEs, better access to markets and finance. We partner with International companies to champion private sector growth and catalyse their growth in three main ways: Connect multinationals and larger businesses to a pool of credible and vetted local suppliers (SMEs); Build long term capacity of SMEs through better access to skills and finance and; Work to improve the investment climate and shape policy in countries we operate in.
Our work is delivered through an integrated model driven by partnerships focused on driving Sustainable Development Goals and local conten, which strongly aligns with key government priority areas.
Our strategic direction is guided by three thematic areas: Food and Agriculture, Infrastructure Development, Women and Youth. We deliver our work through our unique online technology platform www.biasharanow.com that enables our corporate partners to seamlessly and transparently connect to pre-vetted SMEs to do business. SMEs on Biashara are also able to link to other players and actors we collaborate with that including: Local Buyers, Banks, Impact Investors, Coaches, Trainers, other SMEs to network and access other targeted services and growth initiatives.
Your organization supports local businesses by creating access to markets, skills and finance; what impact has it created on the investment front?
IIA champions private-sector-led development to enable SMEs participate fully in the economy and create jobs by strengthening the local economy. IIA supports SMEs build sector specific competencies so as to be able to do business with the private sector. From our research conducted together with Strathmore Business School we established that SMEs in Kenya are unable to successfully participate in business activities with the private sector due to lack of a coordinated approach, Market information asymmetry, skills gaps, affordable finance and compliance. In supporting SMEs meet the required capacity we have seen more appetite for private sector companies to offer SMEs opportunities by ring-fencing opportunities through our platform for specific SME groups and others committing to off-taking ready markets for our SMEs. The private sector in Kenya are now appreciating the need to invest in SMEs as a value add to their supply chains so as to enhance the quality of their pipeline. It is also important to note that the gap in terms of engagement between SMEs and private sector is now reducing as SMEs have increased their appetite to scale their businesses towards meeting the minimum compliance standards for various sectors.
Are your efforts paying off?
We are, generally, seeing SMEs growing and this is positive for economy in terms of job creation. We have witnessed a shift in private sectors openness and flexibility in engaging and including SMEs as well as availing more opportunities for SMEs. The financial sector and the government have also taken positive key steps towards resolving the challenge of improving access to finance. IIA is at the centre of these developments through our work of advocacy and influencing policies that will favour an enabling environment for growth of local enterprises. We have also witnessed grown appetite by Impact Investors to increase investments in our SMEs where a good number are already undergoing investment due diligence.
What lured IIA into Kenya in 2016?
In Sub-Saharan Africa, Kenya is an economic powerhouse. Kenya is attractive to international firms seeking a regional base for their East Africa operations as the leading economy playing a pivotal role in the East Africa Community as a trade hub and the largest economy in East and Central Africa. Kenya has a vibrant private sector and is a regional transport hub for land locked Uganda, Rwanda, Burundi, DRC and Sudan. With this foregoing, Kenya is well positioned to maintain its status as the region’s economic front-runner. The country has been on a steady climb on Africa’s investment attractiveness rankings.
After our groundbreaking research with Strathmore Business School (SBS) it became apparent that the challenges prevalent in other developing markets in Africa were also prevalent in Kenya. We needed to support the investment activity by making it easier for investors to work with local SMEs by developing and building local capacity. We extended our proven model previously implemented from other countries successfully to deliver to the unique opportunity in making Kenya a success.
Our operations in Kenya have been exciting so far since pioneering a premiering a national private-sector platform focused on providing a unified approach for supporting SMEs to grow by enabling sustainable market linkages with investors and enabling them opportunities of participating in supply chain opportunities. To-date we have over 2,400 SMEs on our platform and working with over 20 Partners.
How significantly has the organization grown in terms of revenue?
We have witnessed significant growth but will not speak about revenue given that we are a non-profit that aims to create value and shared prosperity in terms of impact of our work. Indeed, our efforts with our partners are paying off. To date, our platform has grown in numbers and impact with over 2,400 SMEs and 245 Women in Business (WSMEs) registered; supporting over 47,000 jobs; with contracts over Sh300m won by SMEs through our platform. Over Sh400m has been unlocked to SMEs in finance with Sh160m to WSMEs.
What challenges and risks does Invest in Africa face?
Like any other situations, the adoption of technology by corporates took slightly longer because of our disruptive approach providing a seamless, ethical and transparent space to do business. This has gradually improved with increased stakeholder engagement that has informed modifications, improvement on the user experience, diversification of our offerings and an improved value proposition.
The risk factors we face are largely attributable to the vulnerability of the economy to internal and external shocks, the skills gap between industry standards and governance requirements and the weak private sector investment. IIA’s programs are all designed to mitigate some of these factors and improve the chances for SMEs to benefit from economic activity.
In the wake of Covid-19, have you developed any business action plan?
Yes, our key focus has been sustainability and we have a comprehensive business continuity plan embedded in our strategy. Therefore, we have acted decisively to protect our staff and our business and ensure the survival of the firm and protect the key strengths and capabilities we have developed, including our brand promise to SMEs. We have enabled all our staff to work productively from home and ensure that we remain productive. We are clear with our employees regarding our specific policies within the organization and safety protocol regarding the virus.
COVID-19 is so far the most serious threat to business leading to economic hardships, falling profits and rising uncertainty caused by the pandemic experienced in the last two decades. As a growth catalyst for SMEs, our Access to Skills Pillars we have been empowering SMEs with knowledge on best practices, quality and standards. In the current crisis, we are offering support with resources, tips, tool kits, guides, action items that are critical for business survival. Those are accessible for our members on our Biashara Academy Knowledge Hub. In addition, together with our partners we will be rolling out a series of programs to educate and sensitize and empower them to plan ahead, mitigate risk and lead through crisis on webinars and through other digital channels. Our members will also be able to link with available business mentors and coaches for support on our network.
One lesson to business owners is the imperative to show leadership. They must set the tone and be calm in the storm. Focus on the wave, pay attention to it and adapt. Hard decisions must be made but it’s not all about cost cutting and laying off, remember it is people that make every business successful so focus on your key people.
What’s your plan over the next three years?
We intend to have expanded our footprint within East Africa and grow our community to over 10,000 stakeholders. We intend to create thousands of new jobs for Kenyans across the key sectors of the economy with highest potential. We plan to connect SMEs to contracts over Sh1b and train over in over 5000 SME’s. We plan to be well positioned to influence policies and major economic decisions in Kenya.
What are you most proud of?
The traction we are gaining in less than three years having launched Biashara.Now in Kenya. IIA is championing private sector-led growth and the empowering SMEs. For instance, we have been able to onboard SMEs from marginalised Counties of Turkana and Kwale Counties and built a demonstrable track record of transformed households, communities and sustainable business. Through our targeted initiatives, we have been able to develop SME capacity to competitively and successfully bid for jobs from our large corporate partners, leading to increased revenues and creation of new jobs. Our Banking Partners have had faith in our work as real partners and taken time to understand our SMEs and the value of our work, unlocking over Kshs 400 Million to SMEs that may not have qualified for SMEs.
We are also proud of our corporate members that are opening their organizations for learning and exposure tours for our SMEs to gain knowledge and gain mentorship on how they procure through our Biashara Exchange Tours. Two of our corporates Partners have reduced their rigorous pre-qualification requirements to make it easier for SMEs. This signals a major shift that Big Business thinking and readiness to work with SMEs and that IIA is bridging the gap.
How do you market your services?
IIA is a partnership network of organizations. Our first point of contact is therefore our network. We leverage on our partners to market our products and services through their events, platforms and engagements. Besides, IIA also curates its own events online and offline, media engagements, workshops and conferences and also through referrals.