Dakar is one of my favorite cities in the world. Here I was able to make a substantial contribution through WOW for Africa, a venture created by four of us women, to help small and medium businesses thrive by lending them money and advising them on every aspect of how to run their companies.
We were inspired by Muhammad Yunus, economist and founder of the Grameen Bank, an institution that provides microcredit – small loans to poor people possessing no collateral – to help its clients establish creditworthiness and financial self-sufficiency. In 2006 Yunus and Grameen received the Nobel Peace Prize.
“Here we were talking about economic development, about investing billions of dollars in various programs, and I could see it wasn’t billions of dollars people needed right away.” – Muhammad Yunus
The traditional approach to international development usually doesn’t work. Development economist William Easterly is a prominent researcher on the impact of development assistance. Easterly has found that large-scale development assistance – the “billions” that Muhammad Yunus refers to – has no significant effect on economic growth. What does work is ‘searching’ – looking for one problem that needs to be solved, experimenting with what works, and evaluating its success. The ‘searcher’ model is WOW’s approach and its inspiration.
The Needs. Access to Capital, Markets and Business Advisory Services. WOW was created when a group of 300 Senegalese women requested help from a visiting group of 14 global businesswomen. In the small town of Thies, an hour drive from Dakar, the Senegalese businesswomen presented 50 business plans and asked “to be taught how to fish.” These businesswomen explained that they needed capital, access to markets, and business expertise to take their businesses to the next level. With that support, the businesswomen of Thies committed to building successful, high potential businesses. Follow-up meetings with the Thies and Dakar Chambers of Commerce, the President Wade of Senegal, and business and non-governmental organizations (NGOs), as well as extensive background research, confirmed the needs expressed by the businesswomen of Thies.
The name “WOW for Africa” was chosen, because WOW means “yes” in Wolof and because the 14 global businesswomen who first visited Thies wanted to state their strong support for growing African business – “WOW for Africa” is “Yes for Africa”. In the past three years, WOW for Africa has worked to build an eye-to-eye, investment plus advisory model that serves the needs of small and medium-sized enterprises (SMEs) in Senegal.
The Vision. Build fast-growing, profitable companies that create a commercial return and employment opportunities in West Africa. WOW for Africa will focus on Senegal in the near term, addressing the three major constraints that SMEs in Senegal face: the lack of access to capital, the lack of access to markets, and the lack of business advisory services that would allow them to accelerate profitable growth.
The Founders. WOW was founded in 2006 by a group of four global businesswomen – Linda Jenkinson (Managing Director), Alison Davis, Caroline Bailey and Natasha Quist – based in San Francisco and Senegal – who were inspired by the incredible entrepreneurial skills and energy of Senegalese women, and by the under-leveraged business opportunities in the region.
The WOW Model. WOW developed a service model that meets the needs of small and medium-sized companies in Senegal. Importantly, the model is scalable and could be expanded to serve SMEs throughout West Africa. It is also sustainable and adaptable – allowing the model to be ‘shrunk to fit’ its operating environment. Four key elements make up the WOW model: capital, resources, networks, and training.
Capital. WOW provides debt financing to portfolio companies at reasonable interest rates. WOW investment criteria includes:
- Small to medium-size company, with annual sales of $10,000 to $1 million
- Existing company with the potential to scale
- In one of our key industry groups, all of which have the potential for regional or global export: health and wellness, artisan and fashion, financial services, eco-tourism, and infrastructure
In addition, WOW companies must be 70% women owned or women led. West African women are exceptional entrepreneurs and present a lower investment risk than men. Therefore, they will receive a disproportionate share of WOW investments.
Resources. WOW provides a Silicon Valley-like business incubator adapted to Senegalese needs and culture. The business incubator aims to use eye-to-eye, respectful advisory services to build best-in-class companies. The WOW incubator offers:
- Hands-on management team coaching, development and interaction
- Account managers who provide day-to-day support and advice
- Expert advisors who offer industry-specific expertise during ‘expert internships’
- MBA interns from leading universities (Stanford, Harvard, Wharton) who provide support and mentoring to our portfolio of companies’ management teams
Networks. WOW offers networks of advisors that our portfolio companies can tap, for market access, business expertise, support and engagement. Networks include:
- Local entrepreneur network, which provides support in an ‘YPO’ like environment
- Local advisor network, which provides leadership and inspiration
- Partner network, which assists WOW companies in taking their products to market; includes Adina/Whole Foods (distribution), Aid to Artisans (craft expertise), ASNAP (fair trade and organic certification)
Training. WOW offers training in specific areas where management team in our portfolio of companies need or have requested assistance. The ‘WOW circles’ provide sector and functional expertise in areas such as marketing, upgrading of production facilities, and accounting.
The Impact. To date, WOW has reviewed over 100 investment opportunities, conducted due diligence on 40 companies, and funded eight consumer goods companies in urban Dakar and rural towns in Senegal. Total loan volume $105,000 since 2006. All eight investments have yielded 100% loan repayment, and are fully engaged in the WOW model.
Click WOW for Africa for the higher resolution video on VIMEO. (https://vimeo.com/94543222)