Is Kenya Experiencing an entrepreneurship bubble? (part 1)
Kenyans have a tendency to attack new opportunities in droves. First, it was the stock market IPOs. Then came pyramid schemes, then various multi-level marketing schemes, then came greenhouse farming (remember the tomatoes in your friends’ car boot? or your boot?) , then the infamous and magical QUAILS . And now we have the unending land and property buying sprees, despite the fact that some of the property prices make no business or investment sense whatsoever. Some houses have their return on investment pegged on being enjoyed by grandchildren! But that is a story for another day.
We are always looking for what’s hot or for the “next big thing”, trying to catch it before everyone rushes in. We don’t keenly analyze the business opportunity and many times we will end up being conned or losing money in large quantities and then we begin to petition the government to step in and help us recover what was lost, while forgetting that our investment was based on decisions made out of poor judgement and a lack of background checks. As a rule of thumb, don’t invest in something you don’t understand or make sure you are advised by an expert with a track record and good reputation, but that is also another topic for another day.
So today, the buzzword is entrepreneurship. Everyone is talking about entrepreneurship, and everyone is now investing in entrepreneurs or becoming one. I might even say Kenya could be competing with a few countries in the world to become the WORLDs ENTREPRENEURSHIP HEADQUARTERS (whoever sets this up can appoint me CEO). And why not? The worlds’ most celebrated serial entrepreneur, Richard Branson, loves Kenya and is now doing a few side hustles here (google a place called Mahali Mzuri).
However, the truth is , according to this global entrepreneurship index, we have a long way to go to have conditions that favour entrepreneurship or providing cushions that encourage people to risk and venture into business more. We currently rank 86th overall. So much for our bravado as a nation.
Lets begin by listing those supporting entrepreneurs today.
First we have the Tech hubs, incubators, accelerators and venture capital funds , or combinations of all of them seeking to produce the next big innovators. Many hold competitions to attract those with great ideas in technology innovations, social enterprise, financial inclusion, agriculture and the best possible local and international ideas. This support sector has also seen the rise of compepreneurs! (entrepreneurs who jump from one competition to another and the prize money is enough to live off even without a viable business model ). The dust is beginning to settle with easy funding for such initiatives running out and people have begun asking hard questions as to which model of building entrepreneurs truly develops great entreprises. Oh, we even have an oil company and a beverage company running entrepreneurship competitions. It has become that popular.It’s getting harder and harder to find a corporate company that does not have a program targeted at supporting entrepreneurs . Even if it is just to fit in with the corporate crowd.
The rich have also thrown their weight behind entrepreneurs with noble intentions of recreating themselves, or at least making it easier for those coming after them not to suffer like they did. The Chandaria centres in the United States International University(USIU) and Kenyatta University hope to spur entrepreneurs to success largely through education and incubation. The Tony Elumely foundation is also running an Africa-wide competition to support small enterprises.
And then we have Banks! Can you believe it ? Banks love entrepreneurs! KCB has set aside a Ksh 50 billion 2jiajiri fund ,its small brother Chase bank Kenya before the grand scandal had announced a Ksh 60 Billion fund for SMEs (enough money to fund 12 counties ) ,Equity bank was given even more , USD 450 Million by OPIC . All these were announced during the global entrepreneurship summit held in Kenya in 2015. Barclays Bank followed suit with a Ksh 30 billion fund for SMEs. K — Rep rebranded to Sidian Bank and positioned themselves to serve entrepreneurs. No bank is being left out of the wave and each has a product now targeted at SMEs and an SME division. However, many are struggling to structure effective programs that will help them deal successfully with entrepreneurs. And that’s because entrepreneurs are not an easy group to understand.They are visionary, but they can also be very erratic. Value adds to entrepreneurs from the banks are questionable and that’s because its easy after all for banks to make money from entrepreneurs through loan defaults and late penalties or unfavourably high-interestt rates. Entrepreneurs are always desperately looking for money and will take it , however expensive it is without looking at the fine print, after all they have an empire to build!Why sweat a few percentage points on your loan? Other financial players like the Mastercard foundation are also funding a program for entrepreneurs .
Even Universities have joined the fray and now everyone is teaching entrepreneurship(Is entrepreneurship inborn or are entrepreneurs made? I can hear a professor say) . Some are doing it well, others simply have it in their curriculum because there is demand for the course. Programs like the Goldman Sachs 10,000 women at USIU stand out. Research shows that funding women entrepreneurs creates better outcomes for economies than funding men .
And To crown it all , Uncle Sam came to put the cherry on the cake, and he came with a big cheque, and friends with equally big cheques (after all who goes to shags and doesnt carry lots of gifts from the city when he comes with his friends?) . The US president Barrack Obama launched a USD 1 Billion fund targeted at entrepreneurs globally. Thats a lot of money, I wonder how its being spent. He also stressed that AGOA is still ongoing and he opened a centre to train young leaders and entrepreneurs.
So is the opportunity for entrepreneurship as big as its being presented to be? We analyse this in the next post next week, stay tuned!
Joram is a strategy and entrepreneurship consultant and MD atwww.wyldeinternational.com and blogs regularly oninspiringgreatness001.wordpress.com
