NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

I recently received an e-mail update from Acumen Fund’s CEO, Jacqueline Novogratz.? It is interesting to hear updates from Acumen, whose operations include offices in Pakistan and Kenya – two countries that have been in the news lately for all the wrong reasons.?

Often, those of us in the BoP community shy away from talk of failure or hardship, because we don’t want the BoP concept to be marred by such negative thinking.? But I think it is important for us to talk about the tough times just as much as we talk about the success stories. BoP ventures and initiatives, as with any other, do not have a 100 percent success rate.? Nor does everything go as planned.In that light, I’ll copy part of Jacqueline’s update below — it makes for an interesting and thought-provoking read as we begin the weekend.? Clearly, even when things don’t go as planned, it is possible to have hope and ambition…but as they say, vision without action is a daydream.

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Dear Friends of Acumen Fund

The beginning of a new year was marked by political crisis and violence in two key countries in which we work. On December 27th, Benazir Bhutto was assassinated in Pakistan, triggering riots, unrest and continued tension throughout the country, and a few days later, highly contested elections in Kenya set off a wave of violence that so far has left more than a thousand people dead and hundreds of thousands now living as refugees in their home country. Our teams, Fellows, advisors and the entrepreneurs we support in both countries are safe and working hard; however, some of the enterprises have been affected as have their customers who are among the world’s most vulnerable. To them, we send not only our thoughts and prayers but also a recommitment to this work which has never felt more relevant or important.

In Pakistan, the war against extremism is being fought most effectively by extraordinary civil society leaders and entrepreneurs like Roshaneh Zafar and Sadaffe Abid who run Kashf Foundation, the microfinance organization serving more than 300,000 clients; Tasneem Siddiqui of Saiban (low-cost housing) and Dr. Sono Khangarani of Thardeep Rural Development Programme, who continues to experiment with selling drip irrigation to farmers in the Thar desert in Sindh, the province worst hit by violence since Bhutto’s assassination. These institutions have continued to grow and must be strengthened for the long-term. Through our continued interaction, we also have been reminded of the fundamental meaning of patient capital. We need a twenty year perspective, one that works with a great sense of urgency while recognizing we are building the leadership and institutions to serve not just this but the next generation.?

The short-term situation in Kenya is more complex. Unlike Pakistan where our investees have seen slow-downs in their operations but have not taken major hits, some Kenyan investees have been significantly affected. Jamii Bora (a microfinance organization that has expanded its operations into low-cost housing development) estimates that 40,000 of its 150,000 members have been seriously affected by the violence. I recently visited the slums of Kibera which suffered some of the worst damage, and was deeply moved by Toi Market–a place which, to me, had always captured the best of Kenya’s entrepreneurship and vitality, color and hope. The market of three thousand stalls, each one representing a chance for upward mobility, mostly for selling profitable second-hand clothing, was completely razed to the ground. Nothing remained but a few pieces of charred corrugated iron roofing, broken pieces of wood and random materials on the burnt earth.??

And yet, before the violence had been fully quelled, individuals began rebuilding. I met an unforgettable man named Charles Onyango who had started out with nothing a few years ago using microfinance loans and his own determination to expand his business selling children’s clothing in three stalls, so that he could afford to put his children in good schools. I met him as he was trying to reconstruct his stalls, having lost his entire life’s savings in the fires of a single night. He had an uninsured loan outstanding for $6,000, and no way to repay it for he had nothing to sell and no money to begin again. I asked him how we could help. He looked at me, always smiling but with tears in his eyes, shimmering with grace and dignity, and said, ?If they could manage to forgive my outstanding loan, I could take a new loan and buy stock again and then rebuild my business. But please, just don?t let me be a beggar ever again.? (The journal of my trip can be found here.)

We–all of us–owe Charles and the millions like him, not only in Kenya but around the world, the opportunity to be all that they can be–and, definitely not beggars. Jamii Bora is seeking to raise $4 million to shore up their disaster fund that will pay out the outstanding loans of those who have lost everything, and to inject additional capital into their loan fund, to help re-establish the affected businesses. We also need to consider new and better ways to provide insurance that protects the very poor from ?shocks? that include violence and terrorism as well as health and weather–for it is these shocks that keep low-income people locked forever in the cycle of poverty. Emergencies like the ones we are facing provide real opportunities for creative, imaginative thinking–and experimentation to help societies recover from crisis and conflict in ways that strengthen them for the future instead of simply keeping them on life support. Our offices in Nairobi and in Karachi will help lead that kind of support, and we seek examples of real innovation that has worked in other parts of the world.

We will continue to invest and rely on the determination of the investees we support and the customers they serve to contribute to build the world we dream. We promise to consider risk and act prudently, while also recognizing the opportunity–indeed, the obligation–to serve those that face these daily uncertainties. Thank you for standing with and being part of our extended community.

For more, visit the Acumen Fund web site.