Mapping Social Enterprise Ecosystems

in 7 African countries

SEED 2015

By: Pallavi Shrivastava

Africa Social Enterprise Ecosystem

2

• 7 countries: Kenya,

Uganda, Tanzania,

Rwanda, Malawi, South

Africa, Zambia

• 4 sectors: Education,

Energy, Water and

sanitation, Health

• 3 levels: Country,

sector and service level

What characterizes

ecosystem for SEs?

What are drivers

and barriers?

What can donors and

ecosystem actors do?

What is best practice?

How can

countries/sectors

learn from each other.

SE Ecosystem Framework

3

4: POLICY AND REGULATION

7: F

INA

NC

ING

6: INFORMATION AND NETWORKS

5: IN

FR

AS

TR

UC

TU

RE

AN

D H

UM

AN

CA

PIT

AL

1: DEMAND SIDE

• BoP characteristics and

need

• BoP demand

2: SUPPLY SIDE

• Public supply

• Private supply

• Public private collaboration

3: Social

Enterprise

Examples of Ecosystem Questions

• Scale and type of grant

funding.

• To which degree can SEs

access to commercial credit

(banks, MFI for SEs, impact

investors).

• To which degree can is

consumer financing options

available for BoP for services

(MFIs or government).

• Do policies support SEs

directly or indirectly?

• Is there a legal form for SEs?

• What is the level of public-

private collaboration?

5

Policy and Regulation Maturity Matrix

6

Financing Maturity Matrix

Nascent Emerging Growing Mature

Grant funding None or very few. Not

SE specific. Public

grants depend on

donors, service

mostly NGOs. No or

few non-public grants

from sporadic CSR

initiatives.

Various grants

relevant to but not

targeting SEs, still

largely donor

dependent. CSR

budgets support SE

activity. Some

foundations provide

grants to pilot

entrepreneurial

approaches.

Government offers SE

specific grants, still

largely donor

dependent. Grants

from foundations,

banks and business

community exist.

Large CSR budgets

support SE activity.

Grants are

government funded,

SE specific and

accessible. Non-

public grants augment

government and cater

well to SE needs.

Impact

Investors

No local offices.

Sporadic investment

from impact

investment abroad.

Few locally active

impact investment,

funds not devoted to

SEs.

Small but active

growing network of

Impact investors,

gaps in ranges of

capital provided

Many impact

investors providing

funds for different

ranges of capital

Commercial

credit

Not accessible for

SEs, especially in

Start-up phase. High

interest rates.

Difficult to access

especially for smaller

SEs

Various institutes offer

credit at reasonable

rates for some types

of SEs

SEs of various sizes

and stages have

access to commercial

credit as reasonable

interest rates

Consumer

Finance

Do not serve SEs or

SE consumers

Exist, but bureaucracy

and interest rates are

challenging.

SEs frequently use

MFIs to access start-

up capital

Mature industry,

important for SEs

Fin

ance

Malawi

South Africa

Zambia

Rwanda

Uganda

Kenya

Example: impact investment

Nascent Emergent Growing Mature

No local impact investment offices

Local, active and growing impact investment scene

Three active impact investment funds

Kenya has well-known international impact investors with local branches increasing activity

Uganda has well-known international impact investors with local branches increasing activity

Few active impact investment funds

8

Infrastructure and Human Capital Maturity Matrix

9

Information and Networks Maturity Matrix

MatureGrowingEmergentNascent

Extract SE Ecosystem analysis - Capacity Building for SEs

Malawi

South Africa

Zambia

Rwanda

Tanzania

Uganda

Malawi WS

Malawi Energy

Malawi Education

Uganda W&S

Zambia Energy

Uganda energy

Uganda Health

Few, fragmented,

poor quality,

expensive

active donors (in

energy). Focus

on certain

technologies,

management

training limited.

Few, but with SE

focus

Example: Maturity of Southern African Country Ecosystem

(Working Draft)

0

1

2

3

4Legal form

Legal incentives

Public-Privatecollaboration

Grant funding

Commercial credit

Consumer FinanceInfrastructures

Skills

Capacity building

Research and data

Coordination andAdvocacy

Policy &

Regulations

Finance

Information &

Networks

Infrastructure

& Human CapitalMalawi ZambiaSouth Africa

• PPP Policy Frameworks

• Targeted SE Procurement

• Development Partnerships

• Multi-Stakeholder Dialogue

• Access to Finance

• End User Subsidies

• Tax Exemptions on Imports

• Other Financial Incentives

• Infrastructure and ICT

• Workforce skilling

• Conducive Regulatory

Environment

• Overarching Policy

Framework

• Quality and Standards

• Awareness Campaigns

• Data & Research

• Public Service Delivery

Planning

12

Policy: Where is it needed?

Rules &

RegulationsInformation

Public-Private

Collaboration

Public

Resources

Policy: Gaps and Emerging Solutions

Gaps Emerging Solutions

There is low policy recognition of

SEs.

Legal forms do no fit SE reality

and hampers hybrid models.

PPPs focus on large scale

infrastructure projects and rarely

BoP service delivery.

• Public push for market based

sanitation solutions enables

SEs in Malawi, but is not SE

specific.

• Public Benefit legislation being

developed in several countries

enables hybrid models.

• Uganda collaborates with

private water suppliers to

support public supply in rural

areas.

Example: Policy - Government push for market-based Sanitation in Malawi

Key Policy/Strategy

“Sanitation Marketing

Policy” (2008)

“Sanitation Marketing and

Hygiene Promotion

Strategy for Urban Low-

Income Areas in Lilongwe

and Blantyre”.

(Developed by the Malawian

government, with support

from the European

Investment Bank (EIB), the

European Union (EU), and

the World Bank)

Key enabling elements Influence

Claims that all sanitation

services in the country should

be based on market based

approaches.

Currently a nonbinding policy framework,

not yet a binding policy act. Needs to be

implemented and enforced, but shows

the future way in Malawi for sanitation.

Provides guideline for sustainable

implementation of any sanitation

and hygiene promotion activity in

Malawi, designed for Low Income

Areas that fall under the

jurisdiction of the two cities.

Focuses on sanitation marketing

to ensure that hardware provision

is combined with the appropriate

media mix and the required

enabling environment.

Adheres to minimum standards and

prescriptions of the “Sanitation

Marketing Policy” (2008).

Experts say the strategy has a positive

impact on private sector involvement.

Example: Regulation - Public Benefit Acts can create new legal forms

Key Policy/Strategy

Public Benefit

Organizations Act

South Africa, Kenya and

Rwanda have or are

considering PBO acts.

The acts are not SE

driven, but impact SEs

with more flexible criteria

forms of reqistration for

organizations with

reveneues and social

mission.

Key enabling elements Influence

Examples

Permits income generation

which must be used solely for

the public benefit purposes of

the organization.

Includes an income tax

exemption on income received

from membership subscriptions

and any donations or grants.

Provides preferential treatment

for value-added tax (VAT) and

an exemption on customs

duties in relation to imported

goods or services that are used

to further their public benefit

purposes.

Problem for many SEs, that legal forms

do not fit.

PBO form provides more legal scope for

social enterprises-

Increases use of hybrid models.

Can lead to for-profit SEs registering as

PBO to benefit from tax exemptions and

permission to generate income.

Experience from South Africa is mixed.

Kenya legislation is currently not moving.

Legislation will likely be passed in

Rwanda.

• What are drivers and barriers in an enabling

ecosystem for social enterprises?

• What can donors and ecosystem actors do?

• What are good practices to share or replicate South-

South?

Annex

Health WASH Education Energy Finance

1.Telemedicine

2.mHealth

3.Specialized

hospitals

4.Fortified foods

for child

malnutrition

5.Micro-health

insurance

6.Reproductive

health clinics

7.Community

health workers

8.Female hygiene

9. Decentralized

water treatment

and supply

10. Serviced

sanitation with

evacuation in

urban areas

11. Market

activation for

latrines in rural

areas

12. Delivering water

beyond the

pipes

13. Chain schools

14. Learning centers

15. Education

financing

16. Teaching quality

17. Education-

oriented

outsourcing

service providers

18. School

evaluation and

management

support

19. Electrification

through Mini

Grids

20. Grid

connection of

BOP House-

holds

21. Energy for

productive use

22. Solar home

systems

23. Agri Index

Insurance

24. Mobile

Banking

25. Entrepreneur

Finance

26. Finance for

BOP

consumers to

access

essential

goods and

services

26 business model approaches

Skills: Growing SE education – driver for SE capacity

Training Programs Country Description

True Maisha Tanzania Five-day SE training for current or future

entrepreneurs

BongoHive, Innovation Hub

Zambia

Zambia Business skills training, financial literacy

GIB’s Social Entrepreneurship

Program (University of Pretoria)

South

Africa

Seven-month course on social

entrepreneurship and sustainability

Centre for Social Entrepre-

neurship and Social Economy

(University of Johannesburg)

South

Africa

Courses in social enterprise management

and business leadership.

Uganda Martyrs University Uganda Masters in Global Business & Sustain-

able Social Entrepreneurshipability

Makerere University Business

School

Uganda Bachelors of Entrepreneurship & Small

Business Management

Beehive Centre for Social

Entrepreneurs

Malawi Four semester training on different topics

(including ICT, sewing, business skills) &

start-up support