Category Archives: Rockefeller

Getting Local Funding for ICTs in Kenya

Local funding for ICT’s is the genesis of a Report on ICT (PDF) released by Kenya’s Capital Markets Authority. It was funded by the Rockefeller Foundation and drawn by Strategic Business Advisors (SBA).

The CMA had set up rules for Venture Capital firms, but there has been little uptake despite the offer of 10-year tax holiday – and VC firms operate in the East Africa region, but many are based in Mauritius and other countries. In seeking other ways of enabling ICT’s to obtain local funding in the region, a taskforce was setup (chaired by Richard Bell of Wananchi) – and which comprised 25 people drawn from the government, technology, venture capital, private investment – and featured input from Kenya, Uganda, Rwanda, South Africa and Tanzania.

One of the solutions considered was impact investing which the Rockefeller Foundation has championed as a new asset class that will draw the private sector into making socio-economic investments that solve age old problems.

Some Findings:
– ICT’s do not attract local funding in East Africa and while it is easier for large Telco’s to get money, it is early stage firms who require funding the most ($10,000 – $150,000) – this is where most mobile software development firms fall owing to the low barriers to entry.
– Most ICT companies are Small & Medium Enterprises (SME’s) – who face the same challenges as other SME’s – including low collateral, skills, capital etc.
– Investors also face challenges such as difficulty doing due diligence, lack of sector information, red tape (it took 8 years to set up one particular VC firm)- and while there are angel investors, there is no angel investor network

How & why to get local funding into ICT
– Education and policy reforms with insurance, financial, and other investor groups in regards to the ICT sector
– Regulatory changes; easing of regulations for ICT firms to raise funding locally, and encourage more IPO’s. Many firms invest in Asia because it gives clear exit strategy through IPO’s
– Support technology incubation, mentorship and angel networks
– There will be a multiplier effect; once foreign investors observe the investments and returns that locals get, they will probably replicate that ten times over

Will this happen? Will local pension and insurance regulators relax their rules to allow the funds they oversee to be deployed in the risky world of local ICT? These same regulators have spent years tightening the screws to clean up wasteful spending in real estate, and loopholes through which retirement funds were lost.

The report is a start, and it lay out the path to local funding of ICT’s. These investments are very risky as is real estate which insurance, unit trusts, and SACCO’s are edging back in to.

Rockefeller helps Farmers cope with Climate Change

The Rockefeller Foundation involvement in Africa goes as far back as 1914 and one of their goals is to strengthen food security in sub-Saharan Africa.

Climate change is affecting food security and the current floods in Pakistan attest and African farmers are seeing wild swings in weather, coping with higher temperatures, less dependable rainfall, and experiencing longer droughts. In Kenya, the Rockefeller Foundation estimates that maize production could decline by 30% in the next 20 years.

Africa countries need to recognize their vulnerability to climate change as ½ billion people depend on agriculture for their livelihoods, yet some governments are instead selling off buying tracts of productive land to other countries who are themselves investing to enhance their own food security through geographic diversification

The Foundation has thus made agricultural investments improve their productivity of farmers by reducing the risks they face through key innovations including

– Developing new affordable insurance products for small farmers & pastoralists that are indexed to weather; this encourages farmers to increase land & agricultural investment with the knowledge that they may be compensated if weather conditions adverse affect their harvest

pastoralists & their cattle camp in Nairobi’s kileleshwa suburb during 2009 drought

– Funded the World Food Program to develop a software platform to predict most destructive elements; Known as RiskView, it can be customized or every district in every country in Africa and allows governments and aid agencies to when and where a drought will occur.
– Funded Kencall to implement a national helpline for farmers, staffed by a team of experts to answer farmer question on climate change, seeds, fertilizer, agro-dealer location etc – this will help overcome a challenge many famers don’t try new techniques or seeds because they don’t have enough information to take a risk. The information collected will become a research resource even outside Kenya.
– Partnered with Kenya-based Alliance for Green Revolution in Africa (AGRA), in a $50 million loan program through Equity Bank’s ‘kilimo biashara’ program in which the Foundation undertook some risk guarantee enabling the Bank lend to small farmers at below market risks who take up other products like fertilizer weather insurance, and use the help line.

read more