Ms Jacqueline Novogratz, the East Africa Director of the Acumen Fund was very excited during the inauguration of the East Africa Fellows leadership program in partnership with Kenya Commercial Bank (KCB) “for so many reasons”.
In her opening remarks she said “I believe in the poetry of the universe. My story starts with the giving of my favorite childhood sweater to the Goodwill initiative, only to find it again on a little boy in Rwanda, 10 years later and five thousand miles away from my home in Alexandria, Virginia.”
Twenty-five years ago, Novogratz began her journey towards the Acumen project in East Africa, “when I was twenty-five years old, I stood in this same room in this same hotel. It was my first night in Kenya, and I remember walking to the Intercontinental via Uhuru Park as purple jacaranda blossoms wafted through the air, making everything feel so much more magical. It was a night that would change my life forever.”
She went on to poetically hook the congregation that included Dr Martin Oduor-Otieno of KCB, the Rothschild Foundation, Suraj Sudhakar, Blair Miller, Ramil Ibrahim, Biju Mohandas and Acumen team members among others with a flashback of how the room was filled with powerful women from across the continent. She said that the ladies looked “so beautiful” in their national dresses and she felt so small and drab in her blue suit, for she had just left her career on Wall Street to come to Africa.
“That night, I ended up speaking for a long time with a woman named Landrada about her country – Rwanda — a tiny “place of a thousand hills” – a nation I could barely find on a map,” she recounted.
“As life would have it,” she continued, she went ahead to spend months working in Côte D’Ivoire and with women’s groups in Nairobi’s slums – Kibera, Mathare, Pumwani. She ended up in Rwanda, “and my experiences there would have a deep and profound impact on my life.”
“My bet is that someone in this program will change your life, help you to look at things a bit differently, introduce you to someone else who will open a different window, reveal a new truth. That’s how life works,” the magnetic CEO of the Acumen Fund said.
Ms. Novogratz who is currently on the advisory boards of Stanford Graduate School of Business and Innovations Journal, published by Massachuttes Institute of Technology (MIT) Press, paused to tell the story of how Acumen came to be and why she believes the East Africa Fellows program is so important to the world.
“My experiences in microfinance in Rwanda, in working with low income communities in the slums of Kenya and working in global philanthropy and investing taught me, ultimately, that dignity is more important to the human spirit than wealth,” she said, adding “I had seen that the markets alone would not solve tough problems of poverty. I had also seen that aid and charity often delivered dependency rather than dignity.”
She said it was from this understanding that they created Acumen Fund in 2001. They sought a middle way. They called Acumen a “nonprofit venture capital fund for the poor.” They raised philanthropic money – charity – thus instead of giving handouts, they invested in entrepreneurs who dared to see low-income individuals not as passive recipients of charity, but as active agents who wanted to change their lives.
They called their approach “Patient Capital Investing” because it was clear that these entrepreneurs needed to experiment and fail. “They battle lack of infrastructure, corruption, distorted markets, a sense of fatalism at times and the mistrust of others among the people they hope to serve,” she said of the beneficiaries.
Acumen invests equity and loans for 7 to 10 or even 15 years. They work with companies to attract either more traditional capital or government partnerships to bring innovations to market. They reinvested any money that was returned to Acumen in new innovations serving the poor.
Said Novogratz: “It has been thrilling to see that Patient Capital works. Acumen globally has invested more than $60 million in about 60 companies in Kenya, Tanzania, Uganda, Rwanda, India, Pakistan and most recently, Nigeria and Ghana. Those investments have leveraged more than $200 million from co-investors and government directly into those companies, created more than 35,000 jobs and served tens of millions. And many of these innovations are changing the way basic services are created and delivered.”
Examples of companies that have sprout out of Acumen Fund across the East Africa region includes A to Z Textiles in Arusha Tanzania, which now employs 8,000 individuals to produce 30 million insecticide treated malaria bednets per year, accounting for 15% of global production.
Gulu Agricultural Development Company in northern Uganda, a cotton ginning company started by Bruce Robertson will buy top quality cotton from 50,000 farmers in this area ravaged by war for more than two decades.
Juhudi Kilimo, founded by Aleke Dondo, provides asset based financing to 8,000 farmers in Western Kenya. Aleke was recently selected as the Schwab Social Entrepreneur of the year.
Dr. Amos Kibata’s U-Heal extends high quality eyecare services to low-income rural populations in Kenya. And Western Seed is bringing hybrid seeds to farmers in Western Kenya, enhancing the agricultural productivity of 350,000 farmers.
However, Novogratz explains that money is not enough, “Patient Capital must be combined with management systems, the ability to execute, a rigorous sense of discipline along with creativity and courage. Patient capital must be combined with a new kind of leadership, one that has operational and financial skills and also what we call moral imagination – the ability to put yourself in another’s shoes, listen and build solutions from their perspective.”
Ms. Novogratz said they have a rooted belief in the promise of leadership. “In 2005, we established the Global Fellows program with a focus on selecting 10 extraordinary individuals from around the globe each year to create a growing corps of leaders with the tools, skills, and moral imagination to solve the toughest issues of our time.”
She said “we are in our sixth year and the Global Fellows are emerging as architects of the social sector”. Novogratz pointed out that “just in this room tonight Ram Hariharan is COO of Bridge International Academies bringing education to low-income students in the slums across the region, Josephat Byaruhanga is leading the charge for building agricultural systems for small-scale farmers in Uganda and Suraj Sudakhar. I cannot think of a better leader to lead our first Regional Fellows program here in East Africa.”