I recently participated in a global webinar on how small and medium-sized enterprises (SMEs) can future proof their businesses in the wake of the Covid-19 pandemic and climate change.
More importantly, we explored ways in which SMEs can provide shovel-ready solutions to modern-day crises whose intensity and frequency are becoming more pronounced.
The society is urgently in need of more proactive social enterprises to bring about positive social and environmental change amid rapid urbanisation, over and above the profit goal. By their nature – small in size, more open to experiential technology and run by youthful entrepreneurs – SMEs can be dynamic and flexible enough to adjust to changing times. This potentially makes them a powerful growth engine and driver of positive and innovative change.
Our webinar discourse revolved around areas such as climate change, food security, clean energy access, unemployment and clean water and the role of technology in the said fields.
Various issues came up, key of them being lack of access to funding, and lack of proper skills to run a business especially among the youth. Information asymmetry in regard to access to markets and inputs was also cited as a factor denying Africa a social enterprise revolution.
It was agreed that that a multipronged approach is needed to spur more social enterprises, involving both public and private sector players.
This would require a conveyor belt strategy in which startups’ ideas are incubated, fleshed out, funded and facilitated to scale up. In other words, being walked through the ideation, incubation acceleration and seed stage. This will mean looking at the entire the business development journey, from ideation to proof of concept to market access and growth.
This is exactly the strategy Kenya Climate Innovation Center (KCIC) has adopted. KCIC is at the forefront of championing solutions around pressing societal needs triggered by the effects of climate change. We are creating an ecosystem of innovators to roll out projects with the biggest potential of turning around the socioeconomic and environmental fortunes of the society. Sustainability is at the heart of our operations.
To this end, KCIC provides incubation, advisory and training as well as financing services to projects around agribusiness, water management and renewable energy.
Together with its subsidiary Kenya Climate Ventures (KCV), KCIC’s primary mission is to promote innovative solutions geared towards addressing food security, access to clean energy and water, climate change and employment.
But we cannot do this alone. Neither can the government or any other private sector player. There needs to be a joining of more forces to trigger a far-reaching revolution where enterprises drive wide-scale social transformation in the society while at the same time earning investors a return and creating job opportunities.
To begin with, partnerships between commercial banks and accelerators/business development services providers could go a long way in ensuring scale-up of strategic enterprises through creation of flexible financing products. Incubation serves to de-risk a startup, and while doing due diligence before issuing a credit line, banks can take comfort in the knowledge that incubated enterprises have a higher chance of succeeding. This is because they are always subjected to several vetting rounds and molded by business specialists at the seed accelerators, including KCIC.
At the same time, public institutions, non-profit agencies, development partners and entrepreneurs could join synergies towards driving social change.
In March, for instance, a Sh5.1 billion agribusiness fund was launched to finance and train about 2,400 women and youth agri-preneurs in Kenya. Dubbed AgriBiz, the programme is implemented by KCIC in partnership with county governments and funded by the European Union and the Ministry of Foreign Affairs of Denmark (DANIDA)
The five-year project is expected to create 17,000 new jobs through revamped agribusiness value chains and drive the food security agenda by pivoting towards smart, technology-led farming practices with higher yields.
As part of the project, eight business incubation hubs will be set up in eight counties including Uasin Gishu, Meru, Kisii, Nyeri and Bungoma to offer training, business advisory and financing to beneficiaries. Others are Isiolo, Kilifi and Lamu.
On its part, the national government is running another startup-focused initiative through the Micro and Small Enterprises Authority (MSEA). With a Sh15 billion funding line from the World Bank, the authority is rolling out the Kenya Youth Employment and Opportunities Project (KYEOP) targeting youthful entrepreneurs with grants, business ideas competition and training. The goal is to ignite waves of jobs and promote a culture of entrepreneurship at a time when unemployment has hit record levels.
Social enterprises, if given the right climate and support, can be the solution for the many challenges the society is facing in light of rapid urbanisation and climate change.
This article was originally published by the Business Daily