Excerpt Seven From A Recent Interview With University College London | State Of Social Enterprises Ecosystems In Kenya

Earlier this year, The Youth Café was interviewed by Eliana Summer-Galai, a Masters student with the Institute of Global Prosperity at University College London (UCL). This interview was to provide insight into her research on the Kenyan Social Enterprise Ecosystem. The research explores the actors across the ecosystem, looking at stakeholders from four stages of the entrepreneurial life cycle (entrepreneurial education, idea generation, funding, and growth), and the opportunities and challenges for local social entrepreneurs.

The questions asked and our responses form a series of 8 blog posts dissecting important issues with regard to the Social Enterprise Ecosystem in Kenya. This is the seventh post of the series on Do you think that the adoption of International standards/ ways of practice is right for the Kenyan SEE or does it need to consider local context?

Policy and legislation, finance solutions, infrastructure & human capital, and information & networks are among the four important dimensions required for Social Enterprise performance in Kenya, according to international norms. There are aspects in each dimension that serve as success indicators for Social Enterprises.

There are three elements under policy and regulations: policy strategy, regulation, and public-private collaboration. The government must acknowledge and promote the distinctive responsibilities of Social Enterprises in policy development, as well as establish sector-specific policies that encourage both private sector and Social Enterprise engagement in service delivery. Social Enterprises should be able to take advantage of legal advantages such as tax exemptions on important purchases for service delivery and preferred public procurement. Finally, as stated in the Public-Private Partnership (PPP) policy, the government should be open to collaboration with the business sector through public-private partnerships.

Grant funding, commercial lending, and consumer finance are the elements of financing options. Social Enterprises should be able to apply for grants from the government, philanthropists, foundations, and corporate social responsibility (CSR) departments. Social Enterprises need to be able to obtain commercial finance at affordable interest rates. Social Enterprise clients should have formal and informal credit options, such as collaboration with Microfinance institutions (MFIs) or village savings and loans, in consumer finance.

There are two components to infrastructure and human capital which are as stated. Where infrastructure should not only be adequately developed in rural and urban regions, but also inexpensive to the general public, and solutions such as mobile payments and Social Enterprise should be supported rather than discouraged. Human capital is defined as a situation in which the population's total skill level provides a sufficient pool of skilled labor and the educational system fosters entrepreneurial mindsets in children in preparation for a future in the Social Enterprise sector.

Finally, there are three key components to Information and Networks: capacity building, research and data, and coordination and advocacy. When it comes to capacity building, dedicated organizations should supply Social Enterprises with applicable technologies and management, as well as advice, monitoring, and funding. The government and other organizations should collect important data about low-income consumers and markets and disseminate it online in honor of Social Enterprises in research and data. Finally, a national Social Enterprise organization should coordinate operations and effectively advocate for Social Enterprise concerns in service delivery areas in terms of coordination and advocacy.

Creating and maintaining supporting ecosystems that allow Social Enterprises to thrive can be a good way to bridge service delivery gaps because ecosystems are complex and interrelated, facilitation and holistic planning are critical success factors. The government plays a critical role in providing services, setting the country's agenda, and providing necessary support instruments for the agenda's development. As a result, the government is crucial in supporting and advancing Social Enterprise ecosystems, but other actors, such as intermediaries, research institutions, and funders, also have a role to play. 

Therefore, the following recommendations can be made to improve the four dimensions critical for Social Enterprise success in these early and emergent ecosystems: Social Enterprises should be recognized as important players in innovative service delivery, and specific legal forms recognized by the government should be created and instituted to provide legal grounds for granting certain incentives and recognition, as well as to provide Social Enterprises with a general ease of doing business. There should also be progress in public-private collaboration and dialogues to create conducive environments for Social Enterprises to operate efficiently, as well as encouraging government capacity building in the Social Enterprise sector, which includes defining Social Enterprises, demonstrating a rationale for government support, and understanding of policies and regulations that support the Social Enterprise sector.

In terms of Financing Solutions; the government should provide seed and start-up funds to Social Enterprises and equip them with access alternative kinds of financing by piloting additional innovative financing solutions for Social Enterprises that reflect their hybrid character and social mission. Improve Social Enterprise access to commercial credit and microfinance, as well as leverage international impact funds that reward financial and social benefit toward the Social Enterprise sector.

Under Infrastructure and Human Capital; a positive image of the social entrepreneurship sector should be promoted to encourage new generations and youth to join the sector, introduce specialized programs and services focusing on social entrepreneurship, and promote its competitive salaries to expand connectivity infrastructure, including mobile money and IT, to provide alternatives to traditional consumer finance and help Social Enterprises succeed in rural and semi-urban areas.

Finally, increased availability of Social Enterprise-relevant online and face-to-face training and mentorship should be made available in collaboration with networks, consulting firms, incubators, and educational institutions to improve and standardize data and statistical systems in order to build solutions and show evidence of the economic value of Social Enterprises to governments, investors, and donors.

In order to move from individual interventions targeted at individual enterprises to a systems-level approach that takes into account Social Enterprises and related topics, local and regional research communities and networks dedicated to Social Enterprises and related topics should be formed, allowing for knowledge exchange, collective action, and advocacy.

Other than the above recommendations on the ways of practice for Social Enterprise Ecosystems, Kenyan Social Enterprise Ecosystems need to have high consideration for the local context in the aspect of responding to their community needs by creating employment, increasing financial inclusion, enabling small businesses create value, helping parents access better pre and post-natal care, addressing literacy levels especially in marginalized groups, helping farmers access better markets and farm inputs and helping young women access employable skills. 

The Youth Café works with young men and women around Africa as a trailblazer in advancing youth-led approaches toward achieving sustainable development, social equity, innovative solutions, community resilience and transformative change.

Contact us for any comments or suggestions.