Investments in social entrepreneurship should have returns as part of the thesis
I was asked to be on a panel this past week that was put on by Accion. They asked me because of my connection to female entrepreneurs. Before the panel, Accion gave this years Claugus Award to Mike Quinn. The award is in honor of Edward Claugus, a skilled investor who was passionate about social change. Mike Quinn is the founder of Zoona, an African Fintech business that helps communities in Zambia and Malawi through mobile money transfers, savings accounts, electronic and agent payments. Essentially giving the poor communities in these two countries the ability to use a bank. The “bankers” are agents of the Zooma kiosks that allow let’s say the local tomato farmer to take her 30 cents that she made at the end of the day and deposit it into her account and then wire the money to her child’s school at the end of the month. That is one example but essentially as the kiosks agents succeed they get opportunities to open more kiosks and in turn, these agents become entrepreneurial business owners. Most of the agents are women, most of the people that agents hire are women and they are all roughly under 25 years old.
The long tail of Zooma is that families see women being business people, people ( mostly men ) can make money in the community so they don’t have to leave to go to the cities for jobs, and the families remain intact and the responsibility of both parents is shared. What Mike Quinn has built is incredible. He is changing the country and hopefully, this will bleed into the other countries around Zambia and Malawi. The downside is that the currencies in these countries are volatile but with cryptocurrencies, the impact could be even larger. Over $1 billion transactions have now taken place with 1400 agents and an active customer base of 1.5 million consumers. This customer base never had this opportunity before.
Accion is a non-profit that make investments, like Venture Capitalists, in social entrepreneurs who they believe are making a change, people like Mike. They operate globally and that means here in the US too. The other people on the panel were Deborah Drake, who is the VP of the Center for Financial Inclusion that leads the Africa Board Fellowship Program which is dedicated to strengthening governance and strategies for CEO’s and board directors in African financial institutions by teaching best practices. Also, Kojo Appenteng, who is the Director of Credit Suisse that leaves teams on micro-financing, he also grew up in Ghana but has lived here for 20 years.
There are many stories to Mike including that he had almost zero in his bank account, like most founders do at one point, and got his parents, two teachers, to mortgage their house and send him the capital to forge onward. His parents raised an incredible human and so they knew that they were making a good bet. Seriously impressive. What I like about these investments in social good is that the founders behind them are also Capitalists at heart. They are building companies in the land of opportunity that will change their country for the better and with success put capital into their own pockets. I would think that with that success they will give back as others have done before them to continue to support change. These businesses are not being run as non-profits but profit businesses and that makes all the difference in the world.