August 21, 2007
Africa, Gender, and Equity
Our next guest blogger is Joanne Thomas Yaccato, the founder and president of the Toronto-based Thomas Yaccato Group, a consultancy that specializes in helping companies create authentic products, services and business strategies that attract the attention and loyalty of women consumers. She attended our Atlanta deep dive, and has some strong thoughts on the topic of women in Africa, and the way the media portrays them. Feel free to comment and get some conversation going on this important topic.
I was recently interviewed for a Canadian newspaper about my work helping companies create an internal, wide-angle gender lens so they can better reach and keep women as customers. The specific focus of this piece was my latest endeavor with banks in Africa who are now waking up to the enormous economic influence of women. When the article came out I sat in my kitchen, jaw dropped, stunned to read yet another media account that missed the mark.
Believe me; I was painstaking in my care to describe the work. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, created the Gender Entrepreneurship Markets initiative in December 2004. The goal was to address economic inefficiencies and social inequities that happen when aspiring businesswomen aren’t able to realize their full potential because of gender barriers. I explained to the reporter that African women enthusiastically participate in entrepreneurship. In Nigeria alone, women comprise an estimated 50 percent of the economically active population. Yet they remain seriously under represented in the formal banking system. One of the first banks to join the GEM program was one of Nigeria’s largest, Access Bank Plc. Of Access Bank’s entire small and medium enterprise portfolio, only 5 percent of lending went to women-owned businesses. However the default rate in the women’s section of their portfolio is 0 percent, compared to 8.3 percent for their loan portfolio as a whole. This is a pretty typical global scenario.
The reporter was particularly fascinated to learn that even though African women are a powerful economic engine, the vast majority believe that companies do not treat them with respect. The Nigerian focus groups we conducted revealed that banks, some of the biggest offenders, demonstrate an over-reliance on husbands to validate women’s businesses. The women shared that there is dishonesty as it relates to the chances of loans and what it takes to get one. Opaque processes such as refusing to explain products, policies and procedures create an even stronger sense of their powerlessness.
The central point of my lengthy discussion with the reporter was that if a bank (or any company, for that matter), was to successfully reach women, they would need to be convinced that the company was serious. I cited IFC’s program of policy reform, investment, and advisory services that addressed this by providing pioneering local financial institutions with $40 million in financing and hands-on support from global industry leaders in the area of gender and business. My company was chosen to create the internal cultural shift necessary within banks to make this program successful.
I also spoke about GEM’s mandate to try and create a more stable middle class by targeting women professionals and business owners, people like Muni Shonibare. Shonibare owns a successful 150 employee furniture company in Nigeria with considerable growth potential. Her clients include Shell, Texaco, the Abuja Hilton, and others. With demand for her products high, she has considerable potential to increase earnings and create more jobs in the local economy. But something has always blocked her way. Male bankers in Lagos simply did not want to finance a woman-owned business with ambitious expansion plans. She could not speak the language of finance well enough to convince them. But with support from GEM, Access Bank gave Muni an $800,000 five-year loan (not exactly chump change) for her long-term capital expansion plans.
This was a good news story in every sense. But even though I stressed there were an enormous number of Muni Shonibares all over Africa, the journalist fell into the trap of the classic North American stereotype of “African woman”. The photo that accompanied the piece was the cliched colourfully-clad market women showing their wares. This incongruence confused me considering the story was about women professionals – lawyers, doctors and dentists - and business owners. There was “victim” all over the story. Half the piece was dedicated to “women’s life and death struggle with poverty”, “ramshackled villages”, and “buses with no doors.” My goal in this interview was to attempt to break down that tired belief that all African women live this appalling reality. But the journalistic lure of the conventional African drama was too great. The integrity of the article was damaged beyond repair.
For companies to put women at the center of its business they need to change the very lens or filter they use to see the world. This is where that wide angle gender lens comes in. The Royal Bank Financial Group got this in spades. Having recognized the economic potential of women, they came to us to create a plan. We conducted market research so they knew what women’s consumer and entrepreneurial issues were. All of their internal and external communications were audited through a gender lens. We undertook a 5-year training program to change the internal culture and educate the front line. One year into this, the bank witnessed a 10-point jump in marketshare (and this in an industry that dukes it out over a one or two point increase) and a staggering 29 percent increase in customer satisfaction levels of women with their account managers, the largest one year increase in bank history. But the unexpected benefit to the bank was this – focusing on what women want in a consumer relationship raises the bar for everybody. If you make something “women-friendly, you make it every-body-friendly”.
My advice to any company going into Africa is to heed the story of Royal Bank. Like Access Bank is currently finding out, women will come and more importantly stay as customers and tell all of their friends.
August 13, 2007
Is Microfinance a Bad Thing?
It’s time for some guest blogging, and our first participant is Elmira Bayrasli, the Director of Corporate Partnerships & Outreach at Endeavor, a New York-based non-profit supporting high-impact entrepreneurship in emerging markets. Before joining Endeavor, Elmira was the Chief Spokesperson at the OSCE Mission to Bosnia and Herzegovina. From 1997-2000 she was a Presidential Appointee in Secretary of State Madeleine Albright’s office.
Elmira was a participant in our Atlanta deep dive last month, and in it she engaged in a stunning discussion about the negative effects of microfinance. Here are her thoughts on that discussion.
Bono was booed recently at a conference on Africa, says Nicholas Kristof in a recent column in The New York Times. “Several Africans scolded him for demanding more foreign aid, saying that’s not what Africa needs,” he writes.
Exactly. Africa has tremendously talented minds. What the continent doesn’t have is fair access to opportunity, which prevents those minds from innovating and improving their quality of life. Aid has been a necessary measure in Africa. But as disease, famine and war become more widespread throughout the continent, it can not continue to be Africa’s only option.
At last month’s GIO deep dive in Atlanta, I was certainly energized by the many voices who spoke about the need for Africans to get away from aid dependence by supporting entrepreneurship. But I was blown away by the chorus who demanded that it was imperative for Africans to get beyond microcredit and microfinance.
Microfinance has enabled families throughout Africa, and beyond, to gain control of their own income. But these small loans haven’t “made poverty a museum piece,” as the Nobel Laureate Muhammad Yunus envisioned. These small enterprises yield 3-4 jobs at the most, and are rarely sustainable. Developing economies need to create sustainable businesses that will expand jobs and inject wealth into the community.
The Atlanta Deep Dive posed the question: “Why does innovation matter?” Innovation generates ideas, which creates new businesses, which leads to jobs. The real question should be, “How do we let innovation flourish? How do we allow bright minds to create new ideas and solutions that will address the issues of poverty, conflict and inequality?”
Innovation really matters because it leads to transformation. And this is what Africans need – individuals who will think big and put ideas into action that will lead to change.
Today, Africans are running businesses that produce world-class coffee and handicrafts and offer globally-competitive services. They’re using both traditional and technical means to make it happen, and have the potential to scale their endeavors. The obstacles they face, however, are enormous. Rather than aid, these entrepreneurs need mentors, access to networks and role models to get them to the next level.
There is no lack of entrepreneurial role models in the United States. From Steve Jobs to Bill Gates, young people throughout America find inspiration from their example. Young people throughout the world should “dream of being inventors,” as Thomas Friedman points out. It is vital that whether in Africa or Alabama, children grow up in a society which empowers and enables them to think big and believe in themselves.
That’s why innovation matters.
August 07, 2007
Shooting the Messenger
When it comes to Africa, the media, as always, is a convenient scapegoat.
It’s awfully easy to blame Africa’s struggle to attract foreign investment on the steady stream of bad news coming out of the African continent. Undeniably, Western opinion of Africa as a risky place to do business is powerfully shaped by magazine images of flies on faces, newspaper stories about 4,000 percent inflation, and Hollywood films about Africa’s darkest times (Last King of Scotland, Hotel Rwanda, Blood Diamond, etc.) But the issue is more complicated than that.
Everyone knows these stories do the continent a grave disservice. And many of our deep dive participants have lamented this so-called “CNN Effect,” or the image problem that 24-hour news channels create for Africa. “The brand of Africa is not a good brand,” said Patrick Muthui, the CEO of Virtual Services at RMB Private Bank in South Africa, at our Lisbon deep dive. “But in it are great stories of success.”
Mr. Muthui’s point is valid. There are many success stories coming out of Africa today, some of which we have experienced first hand throughout the GIO process. But the majority of the world cannot go to Africa to see these successes for themselves. And so they get their information from the media, which, despite all the talk of its demise, remains a powerfully influential force.
Combating the CNN effect is not easy. The stories they report on are real. And they are worthy of reporting. Corruption, genocide, and economic strife are stories of both human interest and global economic consequence. To not report on them would be considered morally irresponsible journalism.
The trick is how you can begin to inject some of the more positive stories into the tightly-packed 24-hour news cycle, or squeeze a few business success stories onto the prized real estate of the Wall Street Journal.
Hubert Danso, vice chairman of the African Investment Advisory Group at NEPAD, spent years shopping positive business stories around to the international media types. He got nothing but lip service. So he finally decided that if he wanted the stories of Africa’s burgeoning economic prowess and entrepreneurial spirit to reach the world, he was going to have to tell those stories himself. Danso is now the managing editor of Africa Investor magazine. It’s as slick as anything you’d pick up on a New York newsstand, has top-notch research, and relentlessly covers business issues in and around the continent. If you want to get the other side of the business climate story in Africa, it’s a must-read.
Other deep dive participants have broached the idea of a news portal that focuses exclusively on positive stories coming out of Africa. While the journalist in me bristles at the notion of such an explicitly agenda-driven news outlet, a closer look at the reasoning behind such a portal allays my concerns.
When you look at why international media focus on the disaster and disarray in Africa, it comes down to a few things. One, it is sensational stuff, no question. But also, it’s readily available. There are mouthpieces that are willing to offer up headline-grabbing quotes. Non-governmental organizations, by their very nature, need to sell the media stories of doom-and-gloom, as part of their fund-raising efforts and justification for their very existence. So the lazy journalist will follow this path of least resistance and tell the stories of starvation and civil strife.
But if there were an easy place to find compelling stories of business success, personal triumph, and economic progress, wouldn’t that also make for interesting journalism? So we’re talking about a media center, staffed with communications professionals, relentlessly scouring the continent for human interest stories, case studies, and trend stories that could be packaged up with quotable experts and fed to international news outlets at a moment’s notice. It’s called public relations, and it works for major corporations. So why not Africa?