PART 2: CIM's Investment Manager based in Freetown, Archibald Shodeke, talks about the lessons learned towards launching the West Africa Bright Future Fund (WABFF), the importance of in-house expertise and local presence, and the critical components to succeeding in the fragile environment.
In part 1 of the interview, we talked about biases surrounding investments in Africa, opportunities of investing in Sierra Leone and how we realize them in the newly launched West Africa Bright Future Fund (WABFF).
We are looking for a broader impact with the MFIs as well. We have ACTB, which lends money to ambitious entrepreneurs and does the essential job of boosting the private sector in Sierra Leone. Another example is Lapo: 80% of its clients are women, and the MFI is rapidly expanding its services to rural communities across the country. Moreover, they really target young entrepreneurs, empowering them to save money and study. Innovative products constitute a significant portion of their portfolio, such as loans for academic programs and clean energy facilities in partnership with another investee of CIM - Easy Solar.
We have fostered that collaboration, as we saw the opportunity for our investees to work in synergy simply by creating a forum. Easy Solar was piloting an asset financing product in collaboration with a few commercial banks. Our team in Sierra Leone realized that MFIs would be more fitting for Easy Solar's needs, as MFIs have more regional branches and clients in remote rural areas in desperate need of energy access. Plus, they can offer better prices and faster services than banks. Now the MFIs can offer a new sustainable financial product and attract more clients.
Absolutely, we are taking a holistic approach, always finding different ways to improve the investment climate. We believe in fostering dialogue between our investees so they can discuss common issues or inspire each other. Sometimes we undertake studies and promote knowledge sharing within the sectors of interest; for instance, we are now conducting a study around plastic waste management, particularly plastic recycling. We frequently provide technical assistance based on the needs of the specific investees: from value chain strengthening to staff capacity building.
First, we can not use a one-size-fits-all when designing and defining our investment model or approaches. Each SME is unique - and the issues around them are unique. Secondly, even though there are risks, we focus on the opportunities, and those often require patience and deeper insight. We've seen that some SMEs take time to grow and develop. One single investment might not do the job because the transition they have to make is enormous. We gradually build a relationship with our partners and only give them a loan they can handle.
And lastly, to build this partnership, you have to have a local team on the ground. We are more than familiar with the market and its challenges; we speedily find solutions and continuously update our in-house sector expertise. At some point in my life, I tried rice farming, so I know the challenges agribusiness faces from first-hand experience.
We are laying the ground for a much more robust and viable investment climate in Sierra Leone. We are seeing this growth trajectory with our investees already. I have mentioned Capitol Foods before: their growth is inspiring, and now, other businesses want to replicate their model of natural juice processing.
We'll see the number of jobs created increase. We'll gradually see a massive expansion in the services they offer or the products they make. And this will impact the communities and individuals, youth and women and help create a brighter future. When the WABFF is a success, other investors will follow.