Grow your business with Rebecca Harrison

New ways to train businesses on a growth path with Rebecca Harrison

REACHING THE UNDERSERVED: EPISODE 3

New ways to train businesses on a growth path with Rebecca Harrison

If you can get entrepreneurs and their teams to implement some simple but effective habits, then you very quickly start to see results

-REBECCA HARRISON
Co-Founder and CEO, African Mangaement Institute (AMI)

 

Wanjiru Mbugua [00:00:00] I had this idea but had not started, RD clothing. And so when we started on the second month of my training, I remember there’s this trainer who asked us, what do you think are your four best ideas, business ideas that you can work with from the comfort of your bed? You know, something that people would be using, something that people don’t like, something unique, something interesting that you would do as a business and change your life and change other people’s lives. I said “That’s it.” That’s it for me. That was it. That’s all I needed.

Narration [00:00:48] The African Management Institute, commonly known as AMI, has developed Africa’s first scalable solution for skills and enterprise development. Their blended methodology focuses on encouraging adoption of effective business practices. It does this by combining web and mobile platforms with in-person workshops to help participating entrepreneurs develop the skills and habits they need to grow their businesses. Two years ago, AMI expanded its impact in this space by partnering with Kenya Commercial Bank, one of the largest retail banks in East Africa. Through this partnership, KCB’s business clients were invited to join AMI’s Grow Your Business program. Anna Gincherman, Partner at ConsumerCentriX sat down with Rebecca Harrison, co-founder and CEO of AMI to learn more about how blended learning works, how it addresses different profiles of entrepreneurs, particularly women, how it benefits partner banks, and how results are being measured.

Anna Gincherman [00:01:53] Rebecca, you can start with you introducing yourself and just a few words about AMI?

Rebecca Harrison [00:02:01]  My name’s Rebecca Harrison. I’m the co-founder and CEO of AMI, African Management Institute and we enable ambitious businesses across Africa to thrive. We do that through practical tools and training. AMI has been around for about five or six years. We have offices in Nairobi, Kenya, Jo’burg in South Africa and Kigali in Rwanda. We’ve trained about 27,000 people, managers, leaders, entrepreneurs and their employees in about 15 countries across Africa.

Anna Gincherman [00:02:30] The ConsumerCentriX team spent about a week in Nairobi talking to clients of KCB Bank, learning about their experience with the bank’s financial and non-financial services. And many of the clients were raving above the program. They took in 2017, which was conducted by AMI and my favorite quote from the primary school entrepreneur, Simon, was his name, was “these people (meaning KCB and AMI) don’t even know how good this program is and how important it was for us.” So very positive feedback. So it would be great if you can describe what this magic program is,  what’s different from what else is out there and why you think it was so influential?

Rebecca Harrison [00:03:22] I’m delighted to hear entrepreneurs are saying good things about us. So, Grow Your Business is a whole new approach to learning for entrepreneurs. So I guess what we’ve done at AMI, is to turn training on its heads. What traditional training does has take entrepreneurs out of their business and put them in a classroom and has an expert talk at them. And what we see, in terms of results, is that entrepreneurs really struggle to translate that kind of knowledge into any real change in the business. They might get some new knowledge, but then that doesn’t really translates into any kind of real result for the business. So what we’ve done at AMI, is we’ve really dug into the evidence base and the research around what works in developing SMEs and entrepreneurs.

And the big insight and the secret sauce of Grow Your Business is that what makes the difference for is business practices and habits. And if you can get entrepreneurs and their teams to implement some simple but effective habits, then you very quickly start to see results. So when we were designing Grow Your Business, we were thinking both about, you know, how can we really drive impact, but how can we do that in a way that’s cost-effective. And that’s where we came up with this blended model. And the idea of blended learning is that you combine online tools and resources. We provide those through a mobile app as well as an online platform. And the idea is that our entrepreneurs can access practical tools online, anytime, anywhere, and you can apply them immediately in the business. So we’re not taking entrepreneurs out of the business for days on end. We’re going to them at that point of need. So that’s the first piece is the online tools.

The second piece we’ve learned in an African context, purely online learning doesn’t really work on its own. So you still need some kind of human components, kind of human touch, as it were. We combine the online tools with experiential in-person Face-To-Face workshops. But we don’t do as many of the traditional programs. So, again, we’re not taking people out of their businesses for days on end. Over a course of six months, we take the entrepreneurs out for three days, beginning, middle and end. And they have really high impact experiences. So those are really memorable days. You know, they’re not sitting listening to someone talk. They’re interacting, they’re networking,  they’re role-playing and practicing some of these tools that they’ve been downloading on their phones and on their computers and getting a feel for what does that mean for me and my business? Blended learning often only really covers those two components online and in-person. We take it a step further and when we say, well, it’s online tools, in-person experiences and then in the business or on the job practice and application. Throughout our program, we’re journeying with our entrepreneurs to support them and incentivize them to implement these habits and practices in the business.

At the office of African Managment Institute in Nairobi, Kenya

In terms of gender, we’ve seen some really interesting trends. So we noticed on the program with KCB, for example, at the intake level, there were, I believe, it’s 55 percent men and 45 percent women. When we looked at the completing entrepreneurs, that ratio had flipped. So 55 percent of the competing entrepreneurs were women and 45 percent were men.

-REBECCA HARRISON
Co-Founder and CEO, African Mangaement Institute (AMI)

Anna Gincherman [00:06:24] Excellent. And do you think this approach fits best, a particular profile of an entrepreneur? We know the SME segment is heterogenous as there are so many different types of business, sizes of businesses, and there is a gender aspect to it. Do you think your program is best suited for a particular profile or it’s kind of a universal application?

Rebecca Harrison [00:06:47] Yeah, that’s a great question.  There’s a few different lenses, size of business and gender.  Let’s take size of business. There’s two components. So one is the content needs to be tailored for the right size of business, but also the approach. So what Grow Your Business does is we begin the program with a diagnosis where the businesses take what we call the practices survey. And the survey aims to discover which practices are already being implemented and which aren’t. So it’s not how much do they know, it’s what are they doing. And based on that survey, the entrepreneur chooses five things that they want to implement in their business. So it could be starting to forecast that cash flow, starting to do one on one meetings with their direct reports. We’re not prescribing a learning journey. The entrepreneur decides what’s important for them. Now, that works really well for an entrepreneur who’s a little bit more established and who knows enough about their business to be able to identify what they need to do. What we’ve found is with earlier stage or smaller entrepreneurs, they need more direction and so they don’t yet know what they don’t know. And so they need a more directed learning journey. So that’s the big difference that smaller micro entrepreneurs need more guidance.

In terms of gender, we’ve seen some really interesting trends. So we noticed on the program with KCB, for example, at the intake level, there were, I believe, it’s 55 percent men and 45 percent women. When we looked at the completing entrepreneurs, that ratio had flipped. So 55 percent of the competing entrepreneurs were women and 45 percent were men. So women were more likely to complete the program. It seems based on qualitative feedback that they were more likely to translate what they’d learned into real impact for their business. So they were more likely to be implementing the practices, more likely to be growing their revenue, creating jobs.

Anna Gincherman [00:08:44] And why do you think that is?

Rebecca Harrison [00:08:46] Yeah, that’s the big question.  We have a few hypotheses that haven’t been tested. We think that because there are potentially fewer opportunities available to women, that when they get an opportunity like this, they’re more likely to seize it for the reasons that, you know, you at CCX have documented, life is particularly challenging for a female business owner. And so, you know, when you get an opportunity, you seize it and you run with it.  That’s one hypothesis. Another is that the blended learning approach may be particularly well-suited to women who might have multiple responsibilities. Instead of having to take a whole week out to come to class, they’re able to access learning on their phone in the evening during a break. And we’ve had feedback quite consistently from women that they really appreciate that flexibility.

Narration [00:09:35] Through AMI’s flexible schedule and innovative curriculum. Wanjiru finally got the motivation she needed to start her clothing business.

Wanjiru Mbugua [00:09:44] After the 2017 elections,  my other business, the marketing PR business was really slow. And I was thinking, what other business can I come up with. Then a friend of mine told me about this KCB workshop that she had been invited to. So she invited me to go and I went. And after that workshop, we were invited to join a program that would take about six months. It was a pilot program, Grow Your Business, GYB. And so they said, if you’re ready, we would start in January and to finish in July. I said, why not? Because the schedule appeared to be reasonable, because it wasn’t every day like a compass or any other school program. And so it was going to work for me. I had this idea, but had not started, RD clothing. And so when we started on the second month of my training, I remember there’s this trainer who asked us “what do you think are your four best ideas, business ideas that you can work with from the comfort of your bed? ” You know. Something that people would be using, something that people would like, something unique, something interesting that you would do as a business and change your life and channge other people’s lives. I said “That’s it.” That’s it for me. That was it. That’s was all I needed.

Wanjiru gives a customer outfit ideas. 

We’ve seen our NPS score go very high because of that extra mile that we have gone with the customers and it has also increased customer satisfaction levels to double-digit growth. So the non-financial services, comes as a pillar within the business model.

– NAOMI NDELE
Head of SME Banking, Kenya Commercial Bank 

Rebecca Harrison [00:11:07] Another really interesting aspect of GYB is the peer to peer networking and mentoring.  We definitely have program managers who are journeying with our entrepreneurs to help them extract insights and apply those to the business. But also where a lot of the learning happens, we believe is between the entrepreneurs themselves.  There’s a lot of evidence to suggest that a) entrepreneurs love networking. I’ve never met an entrepreneur who does not like networking. And also, you know, being a business owner can be lonely. They really get a lot of value from engaging with other business owners and learning from them.  We actually structure quite formally into the program what we call pods, which are small groups.  In between the formal workshops and while they’re accessing tools on the online platform, they’re also meeting in small groups and they’re sharing what they’re learning and critically they’re holding each other accountable to what they’re learning. And with we’re discovering that a lot of the value seems to be coming out of these pod groups.

Narration [00:12:11] For Samuel, a private school entrepreneur based in Nairobi, the close bond of his pod outlived the duration of the program.

Samuel Njenga [00:12:19] We were also joined with other business people. We formed pod. That we could even meet without the trainer, discuss. And up today, we are still challenging each other, talking, communicating. So that has really helped me a lot.

Anna Gincherman [00:12:35] From what we know that the partnership with KCB Group in Kenya was one of the first of AMI’s partnership with a banking institution. And we see more and more leading banks try to expand their SME proposition, understanding that it’s not only about access to finance, but it’s also about access to knowledge, access to skills, existing network, and that can really facilitate that business growth of their clientele. So from your point of view, where do you see the kind of the benefit for banks of partnering with institutions for yours?

Rebecca Harrison [00:13:20] Yeah. Well, first of all, we loved working with KCB. They’re a great partner, really engaged and really invested in the success of that of their business club members, entrepreneurs. Yeah. I mean, for me, the key benefits for the bank are around de-risking of the businesses.

Narration[00:13:38] As the head of SME banking at KCB, Naomi Ndele pays close attention to the impact of non-financial service programs on clients and on the bank’s overall portfolio growth.

Naomi Ndele [00:13:51] We had customers whose loans were going to be called up, but from the lessons of this training, they were able to restructure their finances and pay up their loans and actually completed the repayment of the loan within that the year of the AMI program. So the benefits of the blended learning were really impactful to the customers, which also resulted in a benefit to the bank in the sense that we were able to recover loans that were almost going bad.

Rebecca Harrison [00:14:22]  The second is just the power that it gives the brand, I think. I mean, when we worked with the KCB clients, we really saw them that the way that they felt towards KCB really turned around and shifted during the course of that program. So many of them saw such transformation and they saw KCB as an intrinsic part of that transformation and an intrinsic driver. So again, for the bank, having your brand associated with transformation in a business and the impact that’s going to have, I would imagine on a loyalty, client loyalty and kind of net promoter score would be really significant.

Naomi Ndele [00:15:01] We’ve seen our NPS score go very high because of that extra mile that we have gone with the customers and it has also increased customer satisfaction levels to double-digit growth. So the non-financial services, comes as a pillar within the business model. It goes beyond just giving products and solutions to walking the journey of building a business with a businessperson.

Samuel at his school in Nairobi, Kenya 

Rebecca Harrison [00:15:35] The other kind of real differentiators of your business is that we’re razor-sharp focused on business impact. Most training programs, the only metric they track is bums on seats or number of people trained and they really don’t track in any kind of rigorous way the real impact on the business. For a lot of the traditional training programs in entrepreneurship around Africa, we don’t actually really know if they work. Not only do we take impact measurement really seriously, but we’ve actually embedded it into the core of the program. We believe that if you measure it, it gets done. A core part of this program is helping entrepreneurs see that if they understand what’s happening in their business, they can identify the core drivers and they can make good decisions. the first thing they do when they come on to grow your business is to start tracking their revenue, their costs, their profits. And we also ask them about the size of their workforce. So we can eventually track job creation and what we see immediately as once they start doing that, they suddenly realize are not quite making the amount of money that I thought I was. And that really quickly concentrates their minds. They get bought into the program really quickly because they start seeing where they can make more money, which is all entrepreneurs want to do. And they quickly start then using some of our tools to negotiate with suppliers to reduce their costs through minimizing waste. They stop serving their customers so they can see what their customers really want. How can they maximize revenue? They start changing the way they deal with their team and thinking about how they deal with their employees.

Samuel Njenga [00:17:10] One is how my staff are today. The way I deal with them, with the training that I got, they are very happy. We do a lot of team building. We do a lot of training and therefore they are really empowered. It is through them that I’m able to get the results that I’m getting in the classroom because I’m the manager. I’m not able to teach every child or even I don’t teach. I do the management. Therefore, by empowering my staff, by giving them a lot of exposure, doing a lot of team building, meeting their needs as they give the feedback, they do the work and therefore we get the results.

Rebecca Harrison [00:17:53] So you see that because they’re measuring what’s happening in the business, that’s what actually drives the impact. And then, you know, of course, it feeds itself. So then we go on to kind of measure business impact against those metrics on a regular basis during and beyond the program.

Narration [00:18:09] Since Anna sat down to talk with Rebecca in late January, AMI has had to make considerable changes to their delivery of educational material as a result of the public health implications of Covid-19. For the foreseeable future, all of AMI’s classes and session will be online. To retain the aspect of  “human touch element,” AMI will be conducting webinars and video conferencing where participants will have the opportunity to role play and network with other members in their cohort. For businesses struggling to adjust to new financial burdens and changing work environments, AMI is now offering a free ‘Covid-19 virtual business survival bootcamp. Through this bootcamp, entrepreneurs can learn how to manage remote teams, lead in a crisis, optimize  health and hygiene at work, and financial forecast  in an economic slowdown.

In these uncertain times, the need for SMEs to learn, adapt and thrive is paramount for the global economy to rebound. Over the next few years, ConsumerCentriX looks forward to partnering  with AMI on developing scalable solutions that will equip SMEs across Africa with the right practices and habits to grow their business and create economic stability for their families and communities.

To learn more about AMI's COVID-19 bootcamp click here

Anna and Rebecca after wrapping up the interview


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Moroccan Women in Business

Moroccan Women in Business: Market Research & Segmentation

REACHING THE UNDERSERVED: EPISODE 2

Moroccan Women in Business: Market Research & Segmentation

(Intro)  Those women running formal companies are really kind of survivors. They have defied the odds. And how that shows up then is that in many aspects they are, at least as I’d say, stereotypically male as a lot of the men.

– Benedikt Wahler, Partner  at ConsumerCentriX

Ana Singh: Through funding from the European Bank for Reconstruction and Development, ConsumerCentriX undertook a large-scale field research in Morocco, surveying more than 800 male and female entrepreneurs in a nationally representative sample to thoroughly understand the needs, priorities and constraints of business owners with regards to running their businesses and their finances. This ultimately enabled a three-level analysis. First, a mapping of the entire market and a comparison of current offers by banks. Second, an identification of relevant gender-differences that banks could respond to in their non-financial and financial services, and finally a detailed segmentation of female entrepreneurs.

 In our second podcast, Benedikt Wahler, Partner at ConsumerCentriX, and István Szepesy, an Associate Consultant, will share key insights learned from this project as well as a few surprises that turned up in the research and segmentations. So, to start off, Benedikt, can you share the main objectives of this particular project? 

Benedikt Wahler:  The objective was essentially twofold. On the first hand, it was about making sure that we have a very thorough and nuanced understanding of the Moroccan markets market when it comes to female entrepreneurs. We can build strategy; we can build product innovation and a communications strategy that would really resonate with those female entrepreneurs that in the end were intended to be targeted. 

The second objective was really to bring the conversation with executives, in this case at banks, bring that conversation onto a factual basis. Because one thing that we’ve encountered a lot is that when the topic is women – it’s a little bit like football. Everyone has an opinion. But that opinion, normally, isn’t far away from stereotypes. And if you do not have solid information you can confidently point to and base your decision making on, then the stereotypes are going to carry the day and are going to carry us into the direction of the pink credit cards and other solutions that we know do not work well.

Ana Singh: What were you hoping to accomplish when you created a gendered comparison of Moroccan entrepreneurs?

Benedikt Wahler: The real question, if the charge is to build out a gender-intelligent finance solution, is to understand where differences between men and women exist that are relevant in the finance context –  that are persistent and wide ranging enough to really merit a dedicated approach. Merit that you have a conversation with bank executives around “you guys need to be changing this because it really doesn’t work with women, even though it might work with men.” So, at the very least, the logical starting point then becomes I need to survey or speak to not only women, but also men to have that gender comparison.

Ana Singh: István, after reaching that logical starting point that Benedikt just mentioned. What were the next steps in terms of research? 

István Szepesy:  First, there was very thorough secondary market research to get an understanding of the market.  And then with primary research, both quantitative and qualitative, to build a first-hand understanding of how the market is. In the quantitative approach, our key objective was to get representative data on the country level. Meaning that having enough respondents, both male and female respondents, that we could have a complex and reliable picture of the country as a whole, not just some random deep dives, based on interviews or focus groups. 

We put together a questionnaire which was built up by three different building blocks. First, the basic socio-demographic questions to get an understanding of who they are and then we wanted to understand also the entrepreneurial profile, based on values and attitudes and lifestyle questions as well – who they are as entrepreneurs and who they are as businessmen and women. So, the third block was more about understanding how banking and finances works for them.

Ana Singh: So, what did you learn?  

Benedikt Wahler:  I think what was really striking and shows the value of going to the making, the effort of such nationally representative research, was that really in some surprising ways there aren’t a lot of differences when we talk about formal women in business. Meaning those are the women who run businesses that are registered with the tax authorities, have all their paperwork in order and really are the finest of the crop in the country. Morocco isn’t an easy place to do business overall. It’s even much harder if you’re a woman. So, those women running formal companies are really kind of survivors. They have defied the odds. And how that shows up then is that in many aspects they are at least as I’d say stereotypically male as a lot of the men.

When you talk about female entrepreneurs in emerging markets, you very often hear “oh, but they’re more risk averse and they’re less educated and they’re not as interested in growing their business because they’re so busy taking care of the family.” And the nuance that this research really added is, yes, that tends to be true if your level of analysis is all of the 400,000 companies, including the many informal ones in Morocco. 

But if you zoom in to those who run a formerly registered business, which is really where the banks currently want to be focusing, where their starting point is. They don’t want, at the moment yet, to go after the informers. That’s a different conversation. So, if you start with the point of the kind of clientele to which banks are currently open,  then we find that actually the Moroccan female entrepreneurs who run such businesses are slightly better educated than the average men. That risk doesn’t scare them. It’s something that they’ve come to embrace. Growth is something that drives them. They more frequently actually than the men, they have entered business because of a sense of opportunity that they wanted to pursue. So, this exercise really brought us to an understanding that pointed us that in this sector, Morocco doesn’t conform to the stereotypes.

Ana Singh:  If the women-led formal SMEs were comparable with their male counterparts, why would banks need to create a separate approach to the women’s market?  

Benedikt Wahler: Interestingly, though, despite those commonalities, we still found that with regards to dealing with finances, there were important nuances that really should translate into the dedicated approach. Because on the one hand, having assets against which you can borrow is still a huge headache for them. And again, the typical pattern of women having much fewer such assets, meaning a piece of land, an apartment, a car, something of big value that banks are happy to lend against in their name is still much rarer in Morocco for female entrepreneurs than for male entrepreneurs. If they show up at the bank and the bank says, “happy to give you a credit, if you sign over, then your house as collateral.” That’s not something that they can realistically do.

And another aspect that always we found to hold also for these highly professional, business savvy women in Morocco, is that the way how their lives and what happens in them, whether it’s marriage, divorce, having a child, having to take care of elderly parents or in-laws much more strongly affects the way how they’re able to run their business and thereby their finances – by at least 20 percentage points. They’re more likely to say this affects me a lot. And that also shows up in how their finances react in such life situations when revenue goes down because you can’t run your business as effectively, cost out because, well, kids needs to be fed as well as elderly parents. If hospital costs and the cash flows overall go down. So banking relevant differences absolutely exist, even though a lot of commonalities and the picture is not one of the poor damsel in distress that needs your charity.

István Szepesy: They are still only 10 percent of the market. And that shows that there’s a much bigger obstacle in front of them to be successful. What was interesting to see is, however, the comparison of formal women versus informal women, where they are much bigger gaps.

Ana Singh: Thank you for bringing me to the next question. You guys created a very detailed segmentation of female entrepreneurs. What did you learn from it? 

Benedikt Wahler: You often hear said in an anecdotal manner that women are the less risky clients, the better at repaying keeping their obligations – seems to bear out. And we found a difference of 3.5 percentage points that women are more likely even if they come into financial difficulties, to keep up paying back a loan, stay in compliance with the obligations to the bank. 3.5 percent improvement on the level of an entire bank’s risk portfolio is already huge. But if we then zoom in on the seven segments that we’ve identified for business women in Morocco. All of a sudden, this 3.5 percent expands to 10.5 percent between the most risky segment and the one that’s most compliant, that always will try to keep up no matter how difficult the situation, keep repaying the loan. And a 10.5 percent at the level of a credit portfolio of a bank really is the difference between you are one of the most profitable in the market or you are  broke.

István Szepesy: So, what is isn’t also an interesting output from our segmentation is not only that we understand how these clusters look like, how many business woman do we estimate to be in each? But it also allows us, through using our methodology, to give a strong estimation on their business potential. We using multiple variables for this. We also calculate what we call an influencing index, which is using different variables to not only understand the potential within the segment, but also the aspirational and networking effects that each of the segments have. And from this perspective, what’s interesting is sometimes a segment which purely looking at their numbers might not seem that relevant. If you calculate this as well in they’d become was one of the most desirable segment potentially for banks.

Ana Singh: When it comes to creating a dedicated approach to the women’s market, how can you change the mindset of banks so they don’t revert back to those gendered stereotypes you mentioned earlier?

Benedikt Wahler: Getting the conversation towards the need for change is not an easy one to have. If you don’t have data. Now, the very interesting and relevant data and for that context were that common to men and women in Morocco, formal men and women. So, people were well educated who run their business in urban areas. They’re connected into life and business. They’re savvy. They’re very knowledgeable in a lot of ways.  But finance is not one of those ways.

 And actually, in a broader picture, the way how Moroccan banks are apparently doing banking as usual, SME banking as usual doesn’t work for men, just like women. So, it’s not women are the ones for whom we need to change this, but it’s rather if we change something and build a dedicated approach for women, it can serve really as a pilot for testing out ways in which Moroccan SME banking should change anyway because it’s not working for the entire market.

About half of men and women alike are currently what we would label business unbanked. Meaning their business finances remain purely in cash. Even for those who have a bank account in their name for private purposes, for instance, they don’t use it to do any of the business transactions. So, whether even with any account exists so formally, they are banked right there. They have a bank form for their clients. They’re currently not using that to run their business transactions at all.  The bank also doesn’t have a chance to ever see any of the business activity that go on in their accounts, try to analyze that for credit scoring purposes, for instance.

Ana Singh: How can stakeholders expand and deepen financial inclusion for Moroccan business entrepreneurs?  

Benedikt Wahler:  Well, if you’re a bank, the first realization is, of course, that your current SME banking as usual isn’t working. It’s not working for men and it’s not working for women. And one of the ways in which it should change that it starts working for women is to take off the focus, the almost exclusive focus on banking entrepreneurs that is on credit. 

Credit is something that is very important for the growth and development of their businesses. But it’s not something that’s top of mind. Actually, when we asked for the financial priorities of the entrepreneurs and again here the results for men and women were strikingly similar. Formal ones, who are really focused on their business, 92 percent and 93 percent came back with saying my top financial priority is protecting my family against emergencies. And only about 50 percent were answering that it’s important or very important to get a loan.

But currently, that’s what I said in banking and a lot of countries and also in Morocco focuses on. So, the way how to bring these clients who are currently not banking at all are very disengaged with financial services is to go after those things that really matter to them. And for entrepreneurs, that’s actually the way how they think about their finances. Private financial sphere and professional financial sphere are very closely linked. And if you want as a bank to more proactively engage women and have them understand that you are important part as a bank in how to run their lives and businesses, then credit is not the right way in. But all of these other things that start with putting some money aside every day, taking out some risk protection by insurance and helping her make her payments, helping solve the everyday business of her life will get her engaged will mean that money flows through the account.

You can collect data and then on that basis, you and that client can really start engaging the discussion around how a loan could help her expand what she has been working at so passionately. 


Podcast with Nicholas Colloff, Expanding Entrepreneurial Growth in East Africa and Central America

Expanding Entrepreneurial Growth in East Africa and Central America with Nicholas Colloff

REACHING THE UNDERSERVED: EPISODE 1

Expanding Entrepreneurial Growth in East Africa and Central America with Nicholas Colloff

It’s very, very important to design programs that are driven by how people learn and people solving real-life problems, their real-life problems, and then reversing them into what they need to know in order not to have that problem again.

-NICHOLAS COLLOFF
Executive Director, Argidius Foundation

Ana Singh: ConsumerCentrix is producing a podcast series on insights and stories on reaching underserved and unbanked people in the emerging markets with financial services. For our first episode, I am speaking with Nicholas Colloff, the Executive Director of Argidius Foundation, a Swiss-based, private family foundation, focused on helping entrepreneurs build profitable businesses and contribute to the sustainable development of their communities. Through the generous support of the Argidius Foundation, ConsumerCentrix has recently completed two feasibility studies in Rwanda and Uganda that determined how financial institutions could optimize their value proposition in financial and non-financial services for the SME segment. 

Nicholas, thank you for joining us. Can you explain why the Argidius Foundation is so focused on the development of entrepreneurs?

Nicholas Colloff: We are interested in enterprise development because small and growing businesses contribute to revenue and employment in low-income communities. They’re the engine of economic growth for those communities. And many of them struggle with a whole range of issues like how better to plan their business, how better to sell their product, what kind of business model do they need, as they expand how do they recruit staff, how do they structure the organization. So all of those kinds of issues which are not financially drive n but are building the capacities of the business, makes significant difference to how the business grows. And we focus on identifying what kinds of interventions help what kinds of business grow best.

Ana Singh: Why is the Argidius Foundation invested in East Africa and Central America in specific?

Nicholas Colloff: We focus on East Africa and Central America because we wanted to help build the ecosystem for services in countries which are challenging, challenged by poverty, which have a range of services which may be of indifferent quality and coverage and which we can make contribution to changing that over time by building better services with greater coverage for meeting the needs of more businesses. And then we want to be able to influence the whole system. East Africa is good because there’s a lot of interesting things happening as with Central America. And when things get going, when they gain momentum, people notice. And so, they are regions which have a lot of other donors interested in those regions and so we can influence them too.

Ana Singh: You have developed a very rigorous methodology in determining the various success levels of your funded programs. Can you explain how you went about developing your Monitoring and Evaluation process and what you have learned from it over the last few years?

Nicholas Colloff:  When I arrived six years ago, we had a strategy that had been done for us by a global consultancy that will remain nameless. And it was all accelerator programs. Accelerator programs were the flavor of the month. And so, it was high growth businesses, accelerator programs. That was it. And unfortunately, there was no evidence that accelerator programs actually worked. 

And there are other kinds of interventions, business networks, management training, incubation. So, we decided that we should let 1000 flowers bloom. And we identified what we thought were good programs, run by what we thought were good teams of people, and we would measure their results. We’d look at the incremental revenue, we would look at the employment, and we looked at the capital raised, and we would look at three different levels of business. Formalizing businesses, micro-businesses – potentially small; dynamic businesses which had been around – often family-owned businesses and look at their growth; and also the venture businesses, the businesses that are meant to go up quite quickly. And we’d look at them against these different kinds of intervention. And so that’s what we’ve done.

We have probably now data on 8,000 businesses that have passed through over 50 programs of different kinds. And you begin to see that some programs are high performing. They are consistent. The enterprises that they work with consistently grow. Others slightly less consistent, perhaps slightly middling performance. And then we’ve got what we call the WOWs which is why, why did we do this. That’s probably a why,  why is the organization doing that. When we looked at high performance, we might have hoped that they will be one of our squares. It would be accelerator programs and venture businesses all for formalizing businesses and business networks. They weren’t. They were spread right across. It didn’t matter what kind of business, it did not matter what kind of intervention. What did matter were the consistencies between these successful programs. And the answer was yes.

Ana Singh: How do you partner with financial institutions, so that they are better able to serve entrepreneurs in the SME segment?

Nicholas Colloff:  If you ask an entrepreneur what they want, they say they want money. And partly that’s true. But often, the entrepreneur doesn’t know how much money they need. And also it may not be available to them, and it may not be available to them because they don’t have a credit history. They don’t have collateral because financial institutions, particularly banks, usually lend against collateral. And so, they’re not really equipped to be investable or lent to. So, the two things go together. This capacity building is designed to get people to a point where you could invest in them or you could lend them money and also to work with the financial institutions so that it is much better equipped to understand its own clients and to begin, hopefully if it’s a bank, to lend against cash flow and credit history rather than against collateral because that enables a lot more people to be able to borrow.

And so the two things are meant going hand-in-hand. There is the taking out of risk by building a business and working with the bank taking out the risk to better understand their customers and better designing products that actually work for businesses which they’re trying to help them.

Ana Singh: Do you have any final thoughts that you would like to share on running successful business interventions? 

Nicholas Colloff: Well I think if you want one sentence about what is that works when it comes to a successful business invention it’s not what you’re doing, it’s not your curriculum, it’s not your structure, it’s how you’re doing it and how you’re following the way in which people learn. Because most people learn when they have a problem, and you help them solve the problem and then you have an opportunity to help people learn what it is they need to know not to have a problem again. So often programs just start from the other end.They assume that these are things you need to know and will teach you. But if you teach people they will absorb them to a certain extent. But if they’re not problem focused,  if they’re not current in people’s mind, much of that learning will be lost. So it’s very, very important to design programs that are driven by how people learn and people solving real-life problems, their real-life problems, and then reversing them into what they need to know in order not to have that problem again.

Ana Singh: Thank you for sharing your insights with us today. We look forward to our continued partnership with the Argidius Foundation where we will continue to work together to better understand the “real-life problems” of SMEs in East Africa so that they can expand their businesses through financial and non-financial services. 


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