This week Rwanda welcomed the fourth edition of the ‘SME and
Banking Africa Forum’ at the landmark Kigali Convention Center. The theme of
this year’s forum, which brought together business leaders, financial
institutions, a selection of innovative start-ups and SME development experts,
was ‘Unlocking the potential of African businesses’. This theme was, I believe,
timely in nature.
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| Philip Amoateng |
The consensus that has been arrived at both the national and
continental level is that trade, not aid, will be the driver of our development
agenda and the various discussions at the Forum only reiterate this fact. One
of the topics that was tackled at the very beginning of the three-day meeting
was ‘How innovation and technology
accelerate SME growth’.
As a major player in
the local innovation and technology scene, we have seen just how linked SME
(small and medium sized enterprises) growth and technological innovation
is. As a company, we are dedicated to
two major goals, increasing digital and financial inclusion. Local SME’s
have been the direct beneficiaries of this.
According to experts, SME’s account for more than 95% of
businesses in African economies through job creation, employment, tax provision
and contribution to Gross Domestic Product (GDP). However, various challenges
hinder SME growth in our continent. These challenges range from electricity
shortage, lack of capital, poor management skills, inadequate information and
corruption.
While the Rwandan government is rightly lauded for its
support to SME’s (and bigger businesses such telecoms) through its Doing
Business reforms, there is still a lot of work that needs to be done in order
to allow SME’s to thrive in the country. And everyone has a role to play.
As noted earlier lack of capital, poor management skills and
inadequate information is a huge hindrance to SME growth. Thankfully, technological
innovations give us many solutions to these challenges. For example, as Tigo we
have made it our mission to ensure that not a single Rwandan is outside the
formal banking sector and we are doing this through our various mobile
financial services.
One of the solutions that we are particularly proud of is
the digital group savings solution. This platform allows unbanked local savings
groups (Ibimina) to digitize. Experience shows that these informal rural
savings groups often become SME’s, especially as they grow their membership and
working capital. In addition, because these Ibimina have a footprint in the
formal banking sector, they are able to access capital from formal financial
institutions because these institutions can see the group’s transaction
records.
I like to say that “if you want to know something, just go
to Google”. Many of the solutions to the challenge of poor management skills
and inadequate information can be found online. That is why we believe so much
in digital literacy. With just a 3G/4G handset a small business owner or farmer
is able to access whatever information they need to expand their business. Are
you a Rusizi farmer who needs to figure out what the price of maize in Kigali
is? You can find that information online. Do you want to take a short course in
project management? E-learning tools are ubiquitous online. Do you sell your
delicious homemade pili-pili sauce? Find customers online.
What our company aims to do is democratize the digital space
by ensuring that even the least among us has the opportunity to enjoy the
digital lifestyle.
In addition to the trickle-down approach to both digital and
financial inclusion, we realized that a more hands-on approach was also needed.
That is why we decided to fund startups through the Tigo Digital Changemakers
competition; this year three young innovators will win Frw 8.2 million each. We
came to the realization that many great ideas were perishing due to lack of
capital and we decided to step in a play an active role.
Through this competition that we organized with our partner
Reach for Change, local SME’s such as Family
Wallet and iSOKO were nurtured. ‘Family Wallet’ is a digital
application that helps informal workers save a portion of their earnings. It
also tracks their income and expenses to help them build credit, access loans
and create a better life for themselves and their families through access to
financial services. ‘iSOKO’ is a virtual marketplace to
help low-income workers not only to earn more income, but also to lay the
foundation for them to build credit so that they can access small loans to help
their families and send their children to school.
The writer is the
Chief Executive Officer, Tigo Rwanda
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