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It’s a Capital (plus Advisory) Problem not a Pipeline Problem

Aleem Walji's picture

Photo Credit: methodlogical.wordpress.comI recently returned from travel to India and East Africa where I attended a round table on social enterprise with the Government of India and met impact investors focused on Kenya, Tanzania, Rwanda, and Uganda. After listening carefully to entrepreneurs, investors, and government officials, I’m compelled to say something entirely inconsistent with conventional wisdom in the world of impact investing: there is not enough capital to support the pipeline of enterprises focused on solving our most vexing social problems. By social problems, I mean the provision of basic goods and services to the bottom of the economic pyramid where governments and markets often fail.

Take access to energy for example or access to sanitation in much of Africa and South Asia. More than 1.3 billion people on the globe still lack access to electricity and over 2.5 billion lack basic sanitation. Every 20 seconds a child dies because of poor sanitation.

These are public goods and unambiguously the responsibility of public actors. But in reality, governments often don’t have the resources, the will, or the capacity to provide these basic services to many of their citizens. And purely commercial enterprises lack incentives to provide services where financial upside is limited and the ability of poor people to pay is constrained. But this is precisely where inclusive (or socially driven) businesses and social entrepreneurs, for profit and not-for-profit, are innovating and developing new business models to solve our most pressing social challenges.

DM grant: a stepping stone for social enterprises

Bart Weetjens's picture

Hi, I am Bart Weetjens, a social entrepreneur, and founder of the organization APOPO, with a vision of appropriate technologies to enhance the impact of humanitarian detection tasks. Basically we teach African communities how to train "HeroRATS", giant African pouched rats that are trained to save human lives by detecting landmines and diseases. In 2003, I was a DM winner.