Rwanda: Model for Integrated Economic Development

Microfinance isn’t the panacea for ending world poverty. And as much as I believe in Karisimbi Partners, it isn’t the silver bullet either. I hope these statements are not surprising- no one approach to poverty alleviation will singlehandedly address the complex issues of development. However, the integration of economic development approaches can have a collective impact that is unparalleled in changing a nation. Nowhere is this more apparent than in Rwanda. Rwanda is a microcosm of the larger context in sub-Saharan Africa – a laboratory for development done correctly.

Rwanda has experienced significant economic growth, but organizations have emphasized the one tool in their toolbox to the exclusion of other necessary approaches. Simple savings programs, microfinance institutions and small and medium enterprise initiatives all offer a way to create a thriving middle class and provide opportunities for all to work their way out of poverty. Quick definitions of the various tools and approaches currently employed in Rwanda:

Savings and Credit Associations (SCAs)—SCAs can reach the 80% of Rwandans living on less than $2 a day. SCAs mobilize a community’s savings and helps start microenterprises, even in rural areas unreached by typical economic development. SCAs require no outside donors as SCAs are governed by local members who each bring an agreed amount weekly. From the joint fund, the members offer each other loans; thus the process is led by savings and the loans follow. When the loans are paid back with interest, the money is given to the other members. HOPE International’s work with the Anglican Church in Rwanda has seen incredible success mobilizing even rural communities to save and invest.

Microfinance Institutions (MFIs)—Because commercial banking is limited in Rwanda, MFIs—or institutions providing small business loans starting at $50—are a practical approach for people wanting to expand their businesses. By 2006, over 93% of the credit unions in Rwanda offered microfinance, signaling the incredible opportunity that exists to offer financial services to people previously thought “un-bankable.” Although MFIs do not typically reach the poorest people, they can help build the emerging middle class and help stabilize an economy. Urwego Opportunity Bank is showing that a profitable bank can meet the financial needs of the poor while keeping a focus on their Christian identity.

Small and Medium Enterprises (SMEs)—SMEs are small- to medium-sized businesses that have already become established. At this economic level, entrepreneurs have amassed the savings to provide a safety net for themselves, but commercial banks are not yet willing to offer loans to them. Therefore, there is a great need for SMEs in Rwanda. SME development is essential for a healthy middle class in developing countries. This is an area with huge potential in Rwanda and Karisimbi Partners is coming at an ideal time in Rwanda’s development to significantly expand management capacity and job opportunities available through SMEs.

Karisimbi Partners, particularly when creatively linked with like-minded MFIs and SCAs, has the potential to help transform a country. I, and many others, are waiting on the edge of my seat as this experiment unfolds.

Sincerely,
Peter Greer
President, HOPE International (and former managing director of Urwego Bank in Rwanda)

Employee Empowerment... Rwanda Style

Gerard Sina is one of the most celebrated of Rwanda‘s high-growth entrepreneurs. I first read about him in Steven Kinzer’s book A Thousand Hills. His formal education does not extend to Junior High, but he is a born dreamer… and he has a penchant for “adding value” to every business he touches. The hills and valleys of the Rulindo District where he was raised, like many other rural Rwandan communities, have been cultivated for generations by farmers who sought to grow what they could eat or sell locally. Sina believes this is no longer good enough…Rwandans should develop a competitive advantage by adding value to everything they sell. Since 1993, his solution has been to process raw fruit and sell or export fruit products instead. Today, Sina‘s company, Urwibutso, employs over 200 people and supports more than 3000 farmers, helping each to support their families and communities in ways previously deemed out of reach. Along the way, Sina has not only transformed the Rulindo District, he has become one of East Africa‘s leading producers of juice, jam, preserves, chili sauce, banana beer and banana wine (which I shared with Sina over goat kabobs last Saturday).

From left to right: Alex of Urwibutso, Carter of Karisimbi Partners, SINA Gerard, and Dano of Karisimbi Partners

It is tempting to think that Sina has a lot to gain from Western business practices. On my most recent visit to his office, however, I came away convinced he has already outpaced many Western companies as relates to caring for and empowering his employees. Sina has built roads and two schools in the area, and paid for each child’s tuition to ensure opportunities beyond those he had as a child. He has built fine new dormitories for employees from distant villages. Urwibutso has a number of nice gathering areas so employees can have lunch in a garden or overlooking a peaceful river. Sina is a proponent of new ideas and perspectives, so he has placed a televisions in places like the bakery and set each one to international channels so his employees who have not traveled can still see into other cultures. Behind his operations you can see a soccer field where his employees and the Urwibutso company-sponsored team play (and I’ve been assured I can play there on my next visit).

To say such practices are unique in rural African regions is a huge understatement. His employees seem to know this, and respond with loyalty. We must hope more employers choose to “add value” as Sina has to the products and people at Urwibutso.

Onward & upward,

-Carter

Thank You, Mr. President!

U.S. President Barack Obama gave Karisimbi Partners a significant boost this week. It seems rare indeed that a small start-up like ours can count on the support of one of the world’s most powerful leaders and orators, but such is our good fortune.

Amid high expectations, America’s first African-American President visited Ghana on July 11th, the day before I arrived in Rwanda. He came to personally deliver a message of partnership with America and hope for Africa’s future. On this stage and at this poignant moment, President Obama put words to a development philosophy largely consistent with what we have begun to implement at Karisimbi Partners:

“… Africa’s future is up to Africans”

“… the true sign of success is not whether we are a source of aid that helps people scrape by — it is whether we are partners in building the capacity for transformational change.”

“…history shows that countries thrive when they invest in their people and infrastructure; when they promote multiple export industries, develop a skilled work force and create space for small and medium-sized businesses that create jobs.”

“…we can broaden prosperity through public-private partnerships that invest in better roads and electricity; capacity-building that trains people to grow a business”

It is encouraging to know President Obama calling for solutions like that we are determined to provide. Perhaps it really is an issue of being in the ‘right place, at the right time’. There is a clarion call seeking to build the capacity of African people and businesses in order to ensure their dignity and self-sufficiency. We are thrilled to be among those that have heard this call and responded… even before President Obama pointed the way.

Onward & Upward,

-Carter

How Far We've Come (& How Far We've Yet to Go!)

I write this aboard the plane that represents the first leg of our move to Kigali, Rwanda. Somehow, this seems an appropriate time and place to take stock of how far we have come since we first considered living and working in Rwanda.

December 17^th-19^th The Dream Summit- Santa Ynez, California

February 5^th-7^th Introduction to Bridge2Rwanda- Little Rock, Arkansas

March 23^rd- April 7^th Preparatory Trip- Kigali, Rwanda

April Partners, advisory board and potential clients identified

May Houses sold- Santa Barbara & Seattle

May-June Send-off Gatherings & Events- Seattle, Orange County, Santa Barbara

July Karisimbi Business Partners formally established

My mind is racing with things to accomplish once I land in Rwanda. Karisimbi Partners needs to be established as a Rwandan entity with back account, address, and requisite Visas. I must secure at least one house, at least one car, and enroll many children in schools. Non-stop meetings will ensue as we continue to try to learn from and work with trusted advisors. And, importantly (as they are the justification for all this other work) we must begin the most promising client engagements we can find.

As I look out the window, I realize our plane has not even left the ground at the Los Angeles airport! This seems an apt illustration…. for while it seems we've come so far, it's clear we have a long, long way to go.

Onward & Upward,

-Carter

The Ranger & the Professor

It seems everyone responds differently when you show them your resume or describe your background… particularly when you’ve moved overseas. However, if you ever want to see which elements of your story resonate most, just wait until they introduce you to others…

When Dano and I visited a microfinance organization in Rwanda’s capital city of Kigali, the president of the organization introduced us to a large gathering of employees. Sure, Dano and I have held many roles over the previous two decades (as indicated in our bio’s), but somehow the salient point highlighted from Dano’s background was the fact that he had been a U.S. Army Ranger. Of my prior experience, it was my role as Business Professor our host found most worth mentioning. This despite the fact we have come to Rwanda to do something very different from that anticipated by our training in academia or the army. Further, we hope to earn a reputation in Rwanda that departs from that typically associated with such credentials.

Our introduction underscored the difficulty we face in 'redefining ourselves' in ways we feel will be most beneficial to the clients we serve. It also illustrated what a unique pairing Dano and I are! As I returned to my seat, I scribbled a note in my journal and passed it to Dano: “The title of the book that tells our story: The Ranger and the Professor” … and we tried to stifle our amusement while our host continued to address the crowd.

Onward & Upward,
-Carter