Building market opportunity and women’s networks in MENA and Africa

By Madeleine White

Reflections on Trade+ Impact summit, in Ifrane, Morocco 19-23rd September 2016

Designed to increase the impact women-led social enterprises have in their communities, the inaugural Trade +Impact summit in Ifrane, Morocco  focussed on addressing 2 key sectors: Craft/textiles (by hand) and Agribusiness for cosmetics. The idea of an event that linked real business being done and investments being made to wider discussion around inclusion and theory was an exciting one – and indeed had been 5 years in the pipeline.

I was delighted to be contributing to discussion around the importance of Impact investment and social enterprise within wider economic development, based on Challenges Worldwide role within the ACRE consortium, and Challenges Capital role as syndicate manager.

Says Kathleen Holland, founder of Trade +Impact:

“We were keen to establish a new way of collaborating, evidencing practical outcomes to discussion points that have been part of the Women’s Economic Empowerment discussion for several years. We picked Trade, Social Impact Investment, Skills Development (with a focus on technology), Networking and Advocacy as the pillars at the heart of this summit, as we felt they most closely addressed the challenges faced by women in these regions and sectors.”

Sponsored by the Moroccan government’s trade and investment arms, Invest in Morocco, as well as educational partners Al Akawayn University and trade partners Handicraft from Morocco -Trade+Impact saw over 150 women from across five continents gather to explore their role in making change happen.

The idea behind targeting the sectors was that both agribusiness and craft sit amongst two of the top employers for women in Africa and the Middle East. Indeed, they are most often run by women-led social enterprises that positively impact their employees and communities. In West Africa alone 16,000,000 women collect and harvest the Shea nut, 10% of which goes directly into cosmetics. Morocco was a great place to launch this concept and trade fair, as it straddles both the MENA region and Africa, two regions that are seen as having significant potential but are also still challenged by real barriers to growth, particularly in terms of equal access to economic opportunities for women.

As Microsoft Social Media lead Miri Rodrigues shared in her impassioned speech,

“We are all actors in creating a reality that people can understand and use. Own your story and use it to take your work to the world.”

With that clarion call echoing in my ears I set to putting the final touches to a panel discussion and workshop around my own area of expertise, linking economic growth with social purpose and knowledge share (in terms of access with finance and investment) to intelligent design around innovative investment solutions.

However, as ever, it is important to contexualise the challenges from the outset. This was done throughout the event, but was discussed with particular focus at the panel I participated in, which focussed on Social Impact investment.

The environment:

Invest in Morocco shared the point that in order to achieve the UN’s  Sustainable Development Goals (SDG’s) by 2030, the amount of investment made globally must triple – to around $2500 billion. The panel then aligned this to job creation figures King Abdullah of Jordan highlighted a couple of years ago; that the 25% youth unemployment in region  needs to be met with 51 million new jobs by 2020 if countries in the MENA region are to develop and progress as per their potential.

A world in which women have the same opportunity as their male counterparts to design and implement business solutions that create wealth and ensure the sustainable prosperity of their communities, is seen as critical, if global growth targets are to be met. The 2015 Mckinsey report estimates that if women participate identically to men in the economy, by 2025, the world’s economy (annual GDP) would expand by US$ 28 trillion, or 26%.

So this equation applies:

Investment = Jobs = Women’s Economic Empowerment 

= Community Impact and Socio-Economic Growth

But in order to work out how this might work, it is essential that the right kind of evidence and measures are gathered. Therein lies the first key barrier within a traditional approach to development funding – and inversely the key reason for the increasing importance of impact investment and social enterprise in the development landscape.

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Traditional NGO and development funding is reported in frameworks and LFA’s dating back to the seventies. By making the reporting backward-looking it is very difficult to create forward-looking, sustainable programmes. Basically it’s like saying to a married women with children;

“Yes, you are welcome to start a high powered job, but make sure you still do all the housework and childcare … and PS, also ensure that you report on both but with particular focus on the innovation you have introduced in your new role.”

It can be done, but it is very difficult. How she reports and how her success is measured will have a direct impact on her performance. She is much more likely to experience success if she is able to look at the picture as one, getting in the help she needs and working hand in hand with husband, colleagues and family to come up with a solution that allows her to thrive in all aspects of her work.

In other words, a whole new approach is needed; one that is flexible enough to showcase efficiency in terms of time and scale but recognises the underpinning structure as being critical to ensuring long term sustainability.

Moving back to the world of socio-economic growth, fuelled by new approaches to investment and enterprise support – we can see a need for a similar kind of approach emerging. Hybrid structures, such as represented by Challenges ( NGO + social enterprise), or ACRE, (NGO consortium + investment syndicate)  are much more likely to be able to embrace a wider range of participants and outcomes. The measure of success is to what degree new style of interaction allows long terms sustainability.

How do we make this happen?

At the forefront must be the fundamental desire to make change happen. This means that collectively (investors, NGOs, enterprises, educators and development funders) want to build greater understanding for the role of social enterprise and impact investment. If we are all to become actors within an environment that is able to support sustainable growth, there must first be a way to unify our aims. Trust can be built between stakeholders by using the kind of digital or online infrastructure the Challenges Group is able to offer through its marketplace technology (evidencing the importance business interaction even at micro level).

The kind of evidence that is built over time by tracking enterprises and investment performance, is driven by regular monthly reporting. Enterprises report on traditional financial key performance indicators (KPIs), but also identify socio economic ones – (as defined for example by IRIS). These might include training opportunities, number of marginalised suppliers etc, whilst recording the number of women owned companies or the impact of all this on employment and community growth.  These value-added metrics are able to show the difference between the return on investment (ROI) in terms of impact investment versus the more traditional investor driven ROI measures.

Technology must be part of this, with engaged individuals at the heart of driving this narrative – and the evidence that proves development. Transparency means that if an enterprise that has been invested in is struggling, intervention comes before it is at crisis point. Ongoing collaboration also means opportunities might emerge that had not been thought of in the past.

Education – of both investors and those looking for investment, is important in narrowing the gap. Very often investors are not aware of the social impact looking at things slightly differently can have. The language of investment is very different to the language of entrepreneurs, even though both desire the same outcome – sustainable profitability. By creating a digital frontline infrastructure that looks at bridging understanding through evidence and regular reporting, investors can be educated in what they should be looking for also.

For those looking for investment, education is also a critical factor. The World Bank Group for example established that the link between solid accounting standards and effective service delivery is clear cut. It is common knowledge that SME’s in general struggle with this aspect of business management and studies have shown that women owned business in particular can lack financial literacy skills focus.

Increasingly NGO’s are offering technical assistance (TA) to help enterprises become investment ready. However there are also great online resources. Organisations such as ACCA via ACCA-X offer an educational technology platform that builds a greater understanding of fundamental financial reporting needs, with the International Trade Centre and indeed Challenges College offering great create content around doing business generally. These kinds of platforms offer practical insights and educational pathways as well as the necessary capacity building tools. They support understanding in terms of the role of connected supply chain and markets and why these are so critical in supporting women owned businesses, from micro to multinational.

We also discussed the importance of on physical networking and storytelling. Whether online or in person, this is a form of mentoring. It is evidenced that sharing experience strength and hope between individuals, communities and regions makes it possible to bridge some of the gaps of confidence as well as understanding. However, once again there are also great online platforms. Nina-iraq, is a prime example of this in action as is UN Women’s Empower Women platform.

Finally – empowerment is of course the motor behind it all. If individual entrepreneurs are empowered through KPIs relevant to them (both financial and social are critical) growth will happen in a way that is both relevant and innovative. Individuals are empowered to take responsibility for what they feel they can deliver and become stakeholders in their own performance. In turn, regular reporting (through live digital reporting) empowers investors – as they can keep a careful eye on the portfolio of organisations they are supporting.

This kind of interaction allows enterprises to move from fear driven survival to opportunity driven growth. At the same time living relationships are able mitigate investor risk and therefore allow for exploration of more innovative approaches on their part.

ACRE, Challenges Investment

Hajar, 22

A final word from 22 year old student volunteer Hajar:

“Equality is not a given, it is a task to accomplish.”

And we individually and collectively have a responsibility to make this kind of scalable growth happen, showing that women are at the heart of making socio-economic transformation of nations a reality.

 

For those of you who want to dig a bit more deeply a great report launched by FSG, which ACRE contributed to can be viewed here . Focussed on East Africa it looks at how market-shaping interventions could transform the impact investment is able to have in transforming economies.