WAKANDA Social Enterprise
Wakanda Social Enterprise is a not-for-profit impact investment fund that finances and develops commercial businesses and partnerships designed to overcome binding constraints to development in the communities and places we commit to serving over the long term.
As a not-for-profit fund we are able to develop purpose-driven businesses that offer our beneficiaries access to the products and services they need to achieve their potential.
Wakanda Social Enterprise is managing the 3% Fund, launched in response to an open call by Liebfeld electronics who tendered their CSR budget (3% of their net profits) to the open market. We are proud to have won this tender with an innovative business plan to bring solar power to Nigeria.
We are registered a Community Interest Company (CIC) in England and Wales, a vehicle designed for social enterprises. Our constitutions stipulates that we do not distribute our profits to shareholders.
Profits arising from operations are re-invested to meet the needs of our communities of interest. Everything we do is through a 'pro-development lens'.
THEORY OF CHANGE
Innovative pro-developpment Business Model
Lower Prices & loans people can afford
Access to essential products & services
For people in communities and places to develop, they need access to essential products and services. Poverty is a lack of access to basic needs such as power, water, healthcare and education. While these products and services are made accessible to people in lucrative markets who can afford to pay market prices and access financial services for loans, or well-governed and rich places who re-distribute value and regulate markets, large swathes of the global population are left out – they are excluded. They therefore find themselves in a poverty-trap, unable to access the products and services they need to develop their way out of poverty.
We bridge this capitalist red-line where the private sector chooses not to go - communities and places deemed unprofitable - by developing not-for-profit businesses that offer people access to products and services at a much lower price than the market price.
By allowing our customers to pay over a period of time at zero or very low interest rates, we essentially also offer our customers access to non-extortionate financial services, which again are not accessible to them through private sector banks and financial institutions, often forcing them to rely on extortionate informal lending or formal lending at double-digit interest rates. Default rates are minimised through innovative social engineering (through collective borrowing for example).
By including local businesses in our marketing, sales, distribution and maintenance networks (when applicable), we have the added-impact of creating good quality jobs with decent incomes.
We work closely with a reputable local NGO to co-develop a context-appropriate business model, to engage with the community and to maximise buy-in and trust and minimise risks.
Revenues and additional funds raised are re-invested to increase our market-share (aiming for 100% access to essential products and services in our communities of interest), to replicate our existing business models to comparable communities and places, and to develop business models in new 'sectors for development'.
While every context is unique, our approach is conceptual and applicable to diverse communities and places with whom we work closely to bring the essential products and services needed to overcome their binding constraints to development.
Funder: Liebfeld Ltd (Electronics Company that commissioned Wakanda Social Enterprise to manage their CSR budget, equivalent to 3% of their net profits)
Community of Interest: Delta State, Southern Nigeria (Community/place: Warri Corner)
Binding constraint: Access to affordable and reliable electricity
NGO Partner: PIND
We are launching our first pilot project in the Delta State of Southern Nigeria, and our target binding constraint is access to affordable and reliable electricity.
Our pilot project aims to electrify 1,000 households in our target settlement and develop solar systems for commercial use by over 500 SMEs.
• Low-interest loans (5% versus above 20% interest rates charged by financial institutions) to sell solar units to households in target community in Delta State.
• Support from PIND, our local NGO partner, for awareness-raising, training in O&M (as they have done before for GIZ) and creating credit-circles (common in micro-finance sector).
• Develop local retail, distribution and maintenance network through female cooperatives
• Consumers build-up their credit-scores as they pay for the units over time.
• Income from loan repayments go back to Wakanda Social Enterprise for re-investment.
• Higher credit scores unlock additional low-interest loans for microcredit.
Through this strategy we can target two binding constraints to development:
1) Access to affordable, reliable and sustainable electricity to 1,000 households and 500 SMEs.
2) Access to low-interest credit to households and SMEs with good credit history.
“Our partners share in our values and purpose - together we can
contribute to equitable and sustainable development across Sub-Saharan Africa”
Naji Makarem, MBA, MSc., PhD – Co-Founder.
ALIGNING FOR DEVELOPMENT
Today, more than at any other point in human history, we have the opportunity of aligning our personal goals with those of our organisations and society at large. We believe this can be achieved by designing our business and investment plan through a pro-development lens.
A pro-development lens at Wakanda Social Enterprise comes from our experience in international development (through academia and consultancy). This allows us to identify binding constraints to development and maximise impact while working closely with the people and communities we are committed to serving over the long term.
We believe that all businesses today would benefit from a pro-development lens. Such a perspective opens up business opportunities for entrepreneurs and investors and aligns the success of businesses with development goals.