Launching Enterprise Incubation Fund
Social impact fund launched to directly benefit 100,000 Kenyan women micro-entrepreneurs
On July 10, business leader turned philanthropist Percy Barnevik launched an impact-first social investment fund from NGO Hand in Hand International at the Partners for Global Impact (PGI)® conference in Lugano.
Percy Barnevik and keynote speaker Sir Ronald Cohen (Chairman of Big Society Capital), together with conference partner INSEAD, challenged the 200 philanthropists, social entrepreneurs and development practitioners at the conference to find innovative solutions to some of the world’s most protracted social problems.
“As a businessman, I recognise good returns when I see them,” Percy Barnevik
Leading by example, Percy Barnevik, founder and chairman of Hand in Hand International, launched the Enterprise Incubation Fund (EIF) for Kenya. The aim of the EIF is to enable Kenyans living at the bottom of the pyramid to access much-needed loans to start their own micro-businesses and work their way out of poverty. The presentation of the fund met with great interest amongst the delegates and there are already discussions underway regarding investments.
Hand in Hand is raising Kenyan Shilling (KES) 250 million (US$ 3m) in loan capital for the EIF. A US$ 100,000 equivalent investment in the fund supports the creation of 11,500 jobs, helping to lift over 57,000 adults and children out of poverty. The fund pays a fixed 2% annual interest in KES over five years.
The fund is targeting micro-entrepreneurs who typically live on less than US$ 15 a week and often fail to be reached by classic microfinance. Most of these are women. Each loan recipient will be given continuous business mentoring – ranging from financial literacy to basic marketing advice – by Hand in Hand Eastern Africa.
Blending micro-credit and business mentoring has already proved to be a success outside of Kenya: Hand in Hand has helped to create 976,000 sustainable micro-businesses and over 1.4 million jobs. The bulk of these results have been achieved by Hand in Hand India which, since 2006, has facilitated access to over US$ 189m of credit for micro-entrepreneurs, with loan repayment rates of 99%.
Percy Barnevik said: “As a business-man, I recognise good returns when I see them. The EIF looks like one of the best philanthropic buys in international development available today. We only extend loans to those who have developed a viable plan for a micro-business with our support and this ensures very high repayment rates. Philanthropists investing in the EIF can be safe in the knowledge that their money is used productively to create long-lasting businesses and jobs.”