Pamoja Digital and Mhogo Food in Kenya
Pamoja is a Kenyan digital credit microfinance startup whose goal is to transform farmers and business people by financial inclusion. They were doing very good in traditional group meetings, but Covid-19 forced the company to reduce as much physical contact as possible. They thus decided to digitize their processes. The company participated in crowdfunding in order to improve its system to transform people from using firewood to Clean energy.
Mhogo Food adds value to cassava tubers by processing them into affordable and nutritious cassava flour for the low income people in Kenya. Currently the company is working with around 4000 Smallholder farmers (SHFs) who do not have enough dryers to dry their cassava tubers. So participating in the 2SCALE crowdfunding aims at raising money to help getting solar dryers for SHFs.
For both Pamoja Digital and Mhogo Food, like in the other countries, the biggest challenge in the beginning was to convince people to believe in why they were doing crowdfunding. But confidence comes when relatives, friends, unknown persons start to contribute. CEO of Pamoja Digital said:
The 2SCALE crowdfunding gave us confidence to approach people that we wouldn’t approach if we were doing it as individuals. At the beginning we did not believe in ourselves. The moment that we received our first supporter, seeing the first person that actually gave us some money we were very happy, and that really helped us to keep pushing. When we got the 50% we even went to celebrate, we didn’t believe we were going to make it.
According to Elizabeth, the CEO of Mhogo Foods, it was also surprising for her when people started to contribute. As it was a new platform she did not expect that people would contribute. The very first surprise was her own father.
Initially when I started the business, he said do not start the business, it is too risky, why can't you just stay in employment? But now throughout the years he has been one of my biggest supporters. He is the one who actually contributed the most. She added.
At one moment during the campaign, Elizabeth thought that she made a mistake of having a huge target of 700,000 shillings.
From the initial deadline I was already giving up. I thought that I would never ever raise that amount of money. But when 2SCALE extended the deadline, I put my all. I started to put some money on Facebook promotions, I did some short videos until we reached the target. It was a good feeling because we reached the target and we don’t have to get money out of our pocket to go and fulfill the dream of our farmers
ENGRACED Touchstone Nig LTD and Cato Foods in Nigeria
ENGRACED Touchstone Nig LTD participated in the crowdfunding campaign to be able to take several ₦10 products to the millions of households in villages and cities in Nigeria starting from Southwest Nigeria who need access to quality foods and beverages at low prices. The CEO CHUKS AJALI found this a unique opportunity to raise funds for his project.
The easiest way for me to gather funds for the projects that I needed if it was not some sort of miracle then it has to be crowdfunded. When I saw the opportunity of 2SCALE crowdfunding, I was excited to jump at it!. I knew I had no other option but to push through and raise the funds. And the theory about life is: when you burn all the bridges and there is no other option then you have but to succeed, then your success is closer! So I burnt all the bridges and I gave it all that I could have and I hit the nail on the head.
Cato foods is an indigenous food company in Nigeria that uses staple crops (bio-fortified cassava, maize and sweet potatoes) to produce nutritional value added food products and make them available, accessible and affordable for consumers at the bottom of the pyramid. They also give support to smallholder farmers that can supply them with the required raw materials. Cato foods could not miss this opportunity to achieve their goal of supporting 100.000 SHFs. On top of that, the platform also adds more credibility to what they are doing in Nigeria.
When people see that an international organisation is supporting and giving us the platform to raise funds, then it is easier to sell the story. The funds that we raised will go a long way in supporting smallholder farmers because currently the impact of the COVID 19 pandemic has been massive especially in the rural farmers.
For both ENGRACED Touchstone Nig LTD and Cato Foods, the main challenge was to convince people to contribute, since the 2SCALE website was not very popular. But in such circumstances, all means are explored to achieve its goals. In churches, military barracks or in the streets, nothing was left to mobilize contributors. Many things stood out for CHUKS AJALI who shared his story in his church and in a military barrack.
I went to the military barracks and I shared my story with the military man, first of all he loved the fact that I had the audacity to come into a military zone. When he saw me do that He said -because you have only done that, you have earned my respect- then he said -I will support you, but I will not just support you- so he got a couple of additional friends and people to support me. The military doesn't allow public support publicly – He did it anonymously. For me I was excited with the whole experience entirely.
In the church, even the pastor was involved. The day before the final day the pastor picked up the microphone and said:
I have a son in this House and that this son of mine has been consistent. I believe in him and I think everyone should put in their power to support him and I’m just talking of ₦1000 now would not be bad. On that day many people went to the platform and gave about ₦1000.
One of the interesting outcomes of the campaign in Nigeria is that the contributors were from various backgrounds. Entrepreneurs also had the intelligence to use all means to raise funds. Even the farmers for whom SMEs seek funding have contributed. So many pleasant surprises! Pelumi Aribisila, the CEO of CATO FOODS said:
There was also a time when we shared with SHFs that we were trying to source funds for, when we shared the history with them, they came together and said OK, if you are trying to do this for us, let us put a token into the crowdfunding. That was also very surprising for me. I can’t seem to erase that memory. Even these people appreciate what we are trying to do for them.
KEITALA NEGOCE and UTC in Mali
In Mali, unlike Kenya and Nigeria, the campaign was initially more complicated. The concept of crowdfunding is quite a new thing and not well known by the population. For many people, it is seen as a scam. Despite all the critics, the SMEs involved in the campaign did not give up.
Keitala Négoce is a woman-led company founded by Ms Dialia Keita .The company processes and markets agri-food products, especially soybeans, processed into several high-nutrient by-products. It had always worked with partners from abroad who purchased their products. With the border closure because of the Covid-19, the market was stopped. The company was greatly affected. Miss Dialia explains:
There were 13 permanent employees in my Company, but currently we are only five. Even my manager resigned. So, I explained all this situation to my partners and friends. Then people understood my pain and decided to support me.
From this pandemic crisis, Dialia learned that she made the error to have always focused on the external market. She realized that she should have developed the local market first. That is why currently, she is in the process of seeing how to position herself on the local market and develop it. When Dialia shared the message with her contacts, she realized that there are always people who care about the success of her business.
What really moved me was when companies competing with mine have paid their contributions in my account. I saw the names of some of them, and others did not want to display their names. That really surprised me.
The second successful company in Mali is the cereal processing unit (UTC).
UTC shells paddy fonio and husked fonio. The company currently has a production capacity of 700 tons / year. It sources fonio from Smallholder farmers. UTC was indirectly affected by the Covid-19 pandemic, as export companies could no longer come out with their products. The company was failing to pay its employees. Sidy Coulibaly i the CEO, in the very beginning was wondering why 2SCALE didn't give directly the money if the reason is to actually help them, instead of going through this campaign. Then he realized that this form of subsidy to which they are too accustomed is not always sustainable. The most surprising think for him is when his wife decide to mobilize people.
What I really liked, my own wife did more mobilization by informing all her brothers and relatives to contribute. Civil servants, community leaders, the mayor of the town, even my staff, everyone made a symbolic contribution. Imagine people working for you and you pay are willing to support you in turn. It was something that moved me a lot.
Like in Kenya, Mali and Nigeria, for SMEs that participated in this first crowdfunding campaign, it was a real success. It required a lot of effort to do the crowdfunding campaigns. Telling people the true story and being ready to dedicate some time and resources help to gain confidence of donors.
Although the starting of the campaign was with some challenges, one of the successful lessons shared by all the entrepreneurs is
never give up, everything is possible