entrepreneurship peer-to-peer social enterprise start-ups

Entrepreneurs tackling SA’s development challenges

Here’s a link to my presentation at the GIBS Economic Outlook 2016 conference: Entrepreneurs tackling development challenges

Some key takeaways:

  • A new wave of entrepreneurs is emerging in South Africa which addresses pressing social problems, directly and indirectly
  • Business models that build bridges across the ‘two-speed’ economy have the best prospects for tackling unemployment and inequality
  • Also need to build models that apply to agriculture and manufacturing
  • Some financiers have come to the party (see SweepSouth), though far more could be done to strengthen the entrepreneurial ecosystem, particularly to enterprises with high social impact
  • Solutions to developmental challenges are necessarily multi-sectoral yet in the big business/big labour/big labour configuration, civil society and entrepreneurs are relegated to the margins
peer-to-peer small business social enterprise start-ups

Transforming capitalism to bridge our divides

Capitalism, like all systems, is constantly evolving. For centuries, it has faced criticism, with intellectual and social movements calling for its complete annihilation, or hoping for it to be superseded, or more modestly, to be reformed. Milton Friedman may have railed that the business of business is business but that hasn’t stopped generations of thinkers and entrepreneurs to come up with ways to achieve both profit and social impact.

We’ve seen corporate social responsibility as an early attempt by businesses to formalise their charitable efforts. The sustainable development movement sought to ensure that private sector companies internalise the impact of their activities on the environment and society. Then businesses were to be measured on their triple bottom lines. And more recently, social entrepreneurship put forth the idea that social good can be embedded into the business model, as opposed to being a happy consequence of profit-making activities. It is undeniable that the way business is conducted has changed. But many of these developments have been co-opted in ways that risk making them mere buzzwords without making a fundamental change in society. The disjuncture between company social reports and the experiences of many mining communities is a case in point.

South African businesses have often been eager adopters of these capitalist mutations. But it’s hard to argue that the country has provided intellectual leadership on this front. This is quite strange, given the way in which the role of business in society was interrogated throughout the struggle against apartheid. Add to that a diverse country, with prosperity rubbing shoulders with dire needs, and a vibrant democracy with healthy debate and one begins to expect more than followership. This country should surely be the world’s laboratory for new ways of thinking about the future economy.

finance peer-to-peer social enterprise

Adventures in peer to peer microlending

I have been fascinated with Kiva for quite some time. It’s a quite an audacious idea – it started as a platform for ordinary citizens in the US to extend loans to micro-entrepreneurs across the developing world. Imagine the effort involved in finding suitable entrepreneurs to finance across the developing world, developing a payment mechanism to transfer funds to them, creating systems to avoid fraud, running a marketing campaign to find development oriented lenders, applying the legal finesse to deal with financial regulation…much respect to the Kiva team.

So the other day I tried to see if I, based in South Africa, could support an entrepreneur from another African country using this platform. The process was mind-blowingly simple. It took about ten minutes for me to sign on to the system and to make a US$25 loan to a trader in South Sudan. Being able to do something like this is a reminder that we are living through one hell of a revolution – this type of global connectivity has never existed before. The opportunities to reach out and effect change in the world are immense.
The micro-entrepreneur in question required a US$450 loan and it became fully funded on the day I made my contribution. The total amount will be used to fund clothing inventory, which the lady will then on-sell in her business. The term is seven months and Kiva’s field partner in South Sudan, BRAC, will collect repayments from the entrepreneur and report on progress on the Kiva site. I will post some updates on how the loan is doing.