Life can be tough for smallholder farmers. They are at the mercy of the
weather and pests. The price they get for their crops varies greatly and is
outside their control. But imagine how difficult it is to survive these ups and
downs without the safety net that access to financial services provides.
That was the plight of Babangida, a smallholder in Nigeria’s Bomu state.
Like over half of all adult Nigerians, he had no bank account. So, in 2017,
after bad weather and political instability lost him two planting and
harvesting seasons, he was struggling to feed his family and buy seeds for the
future.
Help for Babangida came from Tingg Neighborhood Bankers Service (NBS).
Its mobile wallet makes it easy to make deposits and withdrawals, save for
the future and transfer money. It also opens the door for business loans and,
crucially for farmers, allows them direct access to subsidies to buy seed and
fertiliser.
The payments platform which underpins NBS was developed by Cellulant,
one of the continent’s most innovative companies. Launched in 2004 by
Bolaji Akinboro and Ken Njoroge in Kenya and Nigeria, it now operates
successfully in 11 African markets, helping tackle financial exclusion – one
of the biggest barriers to spreading prosperity.
Over the last 15 years, Cellulant has helped transform the lives of millions of
people and, in turn, their communities. It is exactly the kind of business
which needs to be supported and replicated if Africa is to meet the needs of a
population set to double within the next 30 years.
Look, for example, at Nigeria itself. Its population has already increased from
95 million in 1990 to 201 million this year. By 2050, it will have reached
over 400 million as Nigeria passes the USA as the world’s third most
populous country.
This demographic dividend, which can be seen right across Africa, should be
a huge opportunity. No other region has so many young people entering the
labour market. With the right support, their energy and entrepreneurial talent
– qualities seen on every street – can spread prosperity right across the
continent as well as providing a much-needed engine for the world economy
as a whole.
But if this ambition is to be met, we have to find new ways of backing good
ideas and supporting companies with the potential to scale up and, like
Cellulant, make a positive difference to society as they grow. Because at the
moment, the market is not meeting their needs and we are all losing.
Although global private capital markets control more than $200 trillion in
assets, less than 1% is committed to driving a measurable and sustainable
impact.
Nor is it a binary choice between making a positive impact on communities
and making a financial return on your investment. There are many thousands
of social innovators, entrepreneurs and businesses across the continent that
are genuinely investable from both a commercial and impact-led perspective.
Cellulant is by no means unique in what it has achieved, its ambitions for the
future or in the initial difficulty it had in getting funding to grow.
What was also important to Cellulant’s rapid expansion was not just
that Bolaji and Ken received the funding they needed to put their plans into
action. It was also that their investors, while bringing their own global
expertise and experience to the table, signed up enthusiastically to the
founders’ vision and were ready to adapt their ideas and approach to African
realities. It is genuine partnerships, not just increased funding, which are
needed.
With annual spending by African consumers and businesses expected to
reach $6.7 trillion by 2030, spurring consumption across a range of sectors
where Africans have unmet needs, the opportunities are huge. Identifying
them needs the right networks, research and experience as well as rigorous
measurement to ensure goals are met. But above all, it needs commitment
from as wide a group as possible to harness Africa’s tremendous
entrepreneurial spirit.
This week’s World Economic Forum on Africa is an important platform to
help build this movement. Advancing the success of impact investing in
Africa so we can together create the conditions for inclusive growth and
shared prosperity should be a collective priority for those meeting in Cape
Town.
As a younger and more socially conscious generation comes into power, the
momentum behind impact investing is growing. Done well, it will be truly
transformational for millions more Africans, just like Babangida. And an
Africa where prosperity is both spread far more widely and sustainable is
good for all of us.
