‘We provide patient capital for social entrepreneurs’

Business

Acumen is about 13 years old. We started it in New York and spread to India, Pakistan and East Africa. Our presence in West Africa is about two and half years old. We provide patient capital to entrepreneurs that provide goods and services to the poor. We combine philanthropy and market intervention because we believe that charity alone is not sufficient to solve the poverty problem in the world and the traditional financial market is not framed to serve the poor.

So we raise philanthropic money from people who buy into our vision and module; we invest it in businesses that are commercially viable and sustainable but they must provide critical goods and services to the poor.

So, we are looking for entrepreneurs in agriculture, healthcare, education, water and sanitation, low cost housing and energy. These ones provide services and goods that people at the bottom of the pyramid need. If any entrepreneur provides these, we are prepared to have a look at their project.

Challenges

People assume that we are a charity organisation, so we have to constantly deal with that.

Some entrepreneurs at certain stages of their business take the wrong kind of capital, such traditional capital is not patient and it cripples the business. They do not take enough time to find the kind of capital that would work for their business at the stage it is in.

Operations

We are long term investors, we do not do give short terms loans of two years or less. We give for seven years or more. We also provide equity; in that case we hold the position long enough for the business to consolidate its position before exiting.

Investments

Globally, we have invested $85 million in 75 projects in our 13 years of existence. In West Africa, within two and half years, we have invested $6million, two businesses in Nigeria and two in Ghana. In Nigeria we have invested in PAGA, a mobile payment platform and in Fproxil. In Ghana, we have invested in a rice production company.

Prospects

Nigeria and Ghana are our anchor countries. By 2015, we should have invested about $50 million in business projects in these two countries, so we are scouting for opportunities and entrepreneurs that align with what we are looking for. Nigeria is key to our growth plans. So if an entrepreneur has a good business model in our sphere of operations and needs investors, they can approached us.

The business must have started and it must have a proven revenue model that is sustainable. We come in with co-investors to help achieve the business objectives. On interest rate, we do not do one- size-fits-all. We are driven by the social impact story first, and if it is also commercially viable. We then design the commercial instrument to back the project.

Our funding support is between $250,000 (N40 million) to $2 million (N320 million). When we give the support, we also give capacity building support and help the entrepreneur grow the business.

Guarantee

If we provide equity to a business, the growth of the company is what we are betting on. If it is a loan, the company cash-flow must be able to meet the debt repayment schedule. We are not the traditional institutional lenders; so what we want is a proof of the social impact of the business, we then test the commercial viability and sustainability of the project. If we are convinced, we would negotiate and see how we can support the entrepreneur to grow the business.

Repayment

We understand that companies go through phases, some of which are very challenging, so we provide smart money and stand by them to work through the process to achieving the social objectives in a commercially viable way. We have been getting repayments on debts that are due.

Staffing

Globally, we have the one of the most qualified groups of people who could have worked on Wall Street but they choose to work with us because it is more of the heart and spirit; they are highly qualified but they have joined us to create a world beyond poverty. Businesses that we have invested in can be researched to see the transformation.

Background

Prior to this role, Godfrey was chief investment officer in the African Development Bank, based in Tunisia. He also worked with Standard Bank in South Africa and Tanzania as senior manager (Strategy and Special Projects) and head of Retail and Business Banking and Barclays Capital in London as an investment banker in the Mining and Metals Team.

He has over a decade of experience in investment banking, commercial banking and development finance. Godfrey has a First Class Honours degree in Mining Engineering from the Kwame Nkrumah University of Science and Technology in Ghana and an MBA from the University of Hull Business School in the UK, specialising in financial management. He is also an Associate of the Chartered Institute of Bankers (UK).