BY VICTOR ADAR
Have you ever asked yourself the role that a social enterprise plays in today’s society? Or, why enterprises set up on such models flourish? You most likely have seen Ikotoilets across many streets in town. At these toilets, people can not only answer to the call of nature but also engage in other business such as buy airtime, groundnuts or beverages.
Initially being run by the government, not many Kenyans thought these toilets would land on the hands of private investors and still continue offering the social services they are known for. Duncan Onyango is the man on the driving seat of Acumen, an organization behind a special business and funding model that is aimed at transforming companies, leaders and ideas.
In getting a solution to the world’s most challenging problems, this organization has managed to distinguish itself as an exceptional fund provider whose objectives are significant to the livelihoods of entrepreneurship-minded people; those with innovative ideas they are striving to concretize.
As East Africa Director, Mr Onyango has seen Acumen give a new lease of life to entrepreneurs who have ventured into areas that were once ignored. He is making a mark by boosting this lot, impacting social entrepreneurs as he partners with philanthropists to make things happen. As you enter his office at Cape Office park in Kilimani, you notice one thing – they place start-ups at the doorstep of brisk business.
“It is about scaling and driving enterprises,” he says. “These are entrepreneurs who have come up with innovative solutions to be able to provide that service profitably or at some point in time, profitably, and are able to make a business out of it,” he says.
To him, we need a paradigm shift on starting businesses – we need to tackle the issue of poverty and provide the critical goods and services that are a necessity to the biggest population in this country. This is not just a trend, as the sharp mentor knows businesses and what goes into their growth like the back of his hand. And one of his most incisive touch points is growing the business owner. Acumen Fund was there in 2008 when David Kuria under Ecotact, received funding of Sh1million to begin operations of the toilets that everyone in town is familiar with.
“The model is succeeding. We built a number of Ikotoilets in the Nairobi Central Business District, for example, and almost overnight these locations became thriving ventures and were giving birth to other economic services. On seeing this, the local government started investing and sprucing up their toilets. If you go to Uhuru Park, there is a toilet that has been renovated. That’s an example of social enterprise,” he says.
Also soaring like an eagle is MKopa Solar, a lighting system that is a darling to over 90,000 Kenyan homes that are not on the national grid. With affordable pricing of just Sh40 a day, the pay-as-you-go solar is another revolutionary social enterprise that has been instrumental in growing small timers in a big way. M-Kopa has also put the icing on the cake by rolling out the first-solar powered digital TV set in the market.
“Changing the way the world tackles poverty” is a mantra true at Acumen. Now what it does mirrors what M-Pesa is achieving – assisting growth of businesses and societies at a time when the statistics from the 2016 Endeavor Insight Report is indicating that Kenya needs to create more than 3.9 million jobs by 2020.
Mr Onyango emphasizes that running a social enterprise is a business. However, the businesses have an objective to ensure that they provide much greater benefits to the society. Those businesses will employ youth and women, people in the lower cadre… that business must be able to source supplies from that society. That business must be able to provide a service to that group of people.
In the first investment of the Enhanced Livelihoods Investment Initiatives (ELII) a partnership between Acumen, Unilever and the Clinton Giustra Enterprise Partnership, nearly Sh81, 000, 000 ($800,000) went towards new energy efficient, wood-burning cook stove trading as Jikokoa. To accelerate support to low income groups, these clean cook stoves cost a meagre Sh3, 800 a piece, a price that most people can afford – becoming the fastest selling energy efficient cook stoves.
Better still; this Acumen investment uses a significantly lower amount of firewood thus reducing the time and money spent on collecting wood and cooking. In comparison to the traditional ceramic cook stove, Jikokoa cuts down on smoke and soot emissions by more than 60% reducing the burden of disease associated with household air pollution.
Social enterprise is not a new term. It is used to describe businesses that intentionally go out to provide products and services that serve the need of the poor. Usually these are basic products, affordable basic goods. It could be in healthcare, it could be in energy, education, housing, and there’s a lot of it in Agriculture, in water and sanitation. Some of the most difficult sectors – talk about the most critical sectors.
“It is a model whose time has come, and is used to describe businesses that go out to provide basic products and services that are scarce. The model also deals with the stress of having middlemen so the whole community is part of the chain and everyone benefits from the sales, as well as the services,” he says, pointing that Acumen is not only in the business of providing initial investment capital to social enterprises, it is also heavily involved in their post-investment growth.
A case in point is July last year when CEOs of 10 companies on Acumen’s portfolio travelled to Silicon Valley to take part in a 100-day leadership program that was designed to address the shared challenges social enterprises face in emerging markets and to equip entrepreneurs with the business and technology expertise to find faster solutions to poverty in East Africa returning to put to practice what they learned in their respective countries. It is this kind of support that builds Acumen’s portfolio companies into businesses to reckon with.
“Acumen has learnt that the future depends on a new breed of leaders who are ready to solve the world’s most challenging problems and we won’t succeed alone. This is why we are constantly sharing ideas for others to build on and make better and it is also why we work with partners like corporates and foundations around the world to keep getting better. Everyone is welcome on this journey,” says Onyango.
