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East Africa

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.

What Does Innovation Look Like?

Aleem Walji's picture

Having traveled to both East Africa and India over the past several weeks, I’ve been reflecting on what ‘innovation’ means in different contexts. It’s easy to get caught in a technology-centric worldview in places like Bangalore and even Nairobi these days. But when I get past the superficial stories and dig a bit deeper, I realize that impactful innovation is less about shiny tools and technology and more about ‘listening to users’ and transforming social processes to solve problems that matter to people.

My walk through a Delhi slum comes immediately to mind. While there I visited Operation Asha, a 2011 India Development Marketplace winner that is working to arrest the spread of tuberculosis (TB). India is one of the only countries in the world where the rate of infection is growing despite the falling incidence of the disease globally. The previous day, I sat with colleagues from Microsoft Research in Bangalore who explained the simple but critical advances they had made in writing open-source software to verify the identity of patients visiting clinics, aggregating data on missed doses, and using text messages to increase compliance.