Awards Honor Innovators In African Business
MICHEL MARTIN, host:
We're going to talk more about money now, but making money in Africa. Now, so often the headlines from Africa are about conflict and crisis and corruption, which probably makes it understandable that investors, especially global investors, have steered clear of the continent. But while the worldwide recession continues to hit developed nations hard, the data from the International Monetary Fund show that the continent's economic growth is on the rise. In sub-Saharan Africa alone, growth is expected to reach five percent this year, according to the IMF. That's double the rate of last year. And that growth rate is expected to continue to climb next year.
For African entrepreneurs this is encouraging news. But entrepreneur Pierre Omidyar, founder of EBay, wanted to do more to encourage that growth, so he and his wife founded the Africa Awards for Entrepreneurship. It recognizes innovation and entrepreneurial spirit by African companies. It awards a $350,000 prize. The third such contest was held this week in Kenya.
And we're joined now by Arjuna Costa. He is the director of investments with the Omidyar Network. That's the global investment firm that sponsors the awards. And Kamal Budhabhatti. He's the CEO of Craft Silicon, this year's winner. And they're both with us from the BB Studios in Nairobi. Thank you so much for joining us and congratulations to you on the award.
Mr. KAMAL BUDHABHATTI (CEO, Craft Silicon): Thank you very much.
Mr. ARJUNA COSTA (Director of Investments, Omidyar Network): Thanks, Michel.
MARTIN: So, let's start with you, Mr. Costa. Tell us about the contest, or the competition and why did your company decide to sponsor this competition.
Mr. COSTA: The Omidyar Network is a philanthropic investment firm and we're driven very much by a belief that we can sponsor entrepreneurs to unlock the power of the individual and empower the individual. And one of the things we like to do in addition to making direct investments is to help build the ecosystem for entrepreneurship.
And by sponsoring the awards, we thought this would be a great opportunity to really highlight the power of entrepreneurship, put a lot of - shine the spotlight on a couple of very successful African entrepreneurs and really put up on a pedestal some of the inspiring stories that we see coming out from across the African continent.
MARTIN: This is a very rich prize, if you don't mind my saying so. And I think it's also worth mentioning that this group was founded by the founder of EBay, Pierre Omidyar. The prize money is $350,000. What is your intention with that prize? What do you hope that the winners will do with it?
Mr. COSTA: What was fascinating was, in meeting a lot of these entrepreneurs -and we had 10 finalists here in Nairobi over the weekend - they went through an intense process of meeting with judges and talking about their businesses and talking about where they saw their businesses growing in the future. One of the constraints they found was actually accessing financing. And while the $350,000 was split, with $100,000 for the grand prize winner, which was Kamal, and five runners-up, so to speak, that each got $50,000, we believe that this would get reinvested in the business.
Beyond just the prize money, I think what's important to us is that we've created role models within the respective communities where these entrepreneurs operate. And by championing their efforts, we hope that in addition to the financial remuneration, they do see a growth in their business from just the additional recognition.
MARTIN: And Mr. Budhabhatti, congratulations on the win in this competition.
Mr. BUDHABHATTI: Thank you very much, ma'am.
MARTIN: Tell me about your business and tell me, why did you enter the competition and what will you do with the prize?
Mr. BUDHABHATTI: OK. So, what we do is we develop business software for commercial banks, for micro-finances, for electronic switching that drives things like ATMs and the (unintelligible) and the mobiles. We basically develop software. And these softwares are then sold to various customers, which could be either a bank or a micro-finance for their day-to-day operations.
MARTIN: Oh, OK, so you've developed this software that drives the operations of banks and other financial institutions.
Mr. BUDHABHATTI: Absolutely correct.
MARTIN: What does your product offer that others don't?
Mr. BUDHABHATTI: OK. Because we're coming from the emerging markets, you see, one of the challenges that are faced by the commercial banks here are different from what different challenges that the banks face in the emerged markets. So because we come from the emerging markets, we understand the challenges that the bank faces. Obviously that's one of the reasons. The other reason, obviously, the cost. Costs are also fine tuned toward bank and the emerging market can afford.
MARTIN: So, you're creating products that are more suited to the countries that they're in.
Mr. BUDHABHATTI: Yes, that's true.
MARTIN: And what will you do with it? What do you want to do with the - besides bragging rights, what do you hope to do with the prize money?
Mr. BUDHABHATTI: Obviously the money will be invested back into the business and we are hoping to use this money in order to do a serious marketing and sales campaign for our products, both in Africa, as well as the emerging markets around the globe.
MARTIN: Mr. Costa, talk to me more about this idea, if you would. And I'm sure for years activists have been saying trade not aid when it comes to Africa. They've been saying the important thing to really develop the continent is not to keep investing money in aid, but to build a middle class, to build an entrepreneurial class and to build kind of a civil society. And I understand that, but what role do you think that award plays in that? Because, I mean, it does seem as though the people who would be in position to compete for this award are already people who are doing well.
Mr. COSTA: Well, Michel, it's interesting. In this year's awards, we had 2,700 applicants from 15 countries across Africa. And what you see is that they're all coming up with homegrown solutions to local problems. These are small businesses that start self-funded, often get market traction, do want the recognition and really think that they have the power to change their surroundings, the communities in which they in and work. And hopefully by extension, you know, have a real impact on the broader society and the countries that they are in.
MARTIN: Finally, Mr. Costa, I'm going to ask, you know, obviously, you know, all startups involve risk. But is it your contention that the risks in Africa, the perception of risk actually outweighs the actual risk?
Mr. COSTA: I couldn't agree with you more, Michel. I've been, in one way or another, investing in Africa for close to 15 years. And I found that spending a lot of time on the ground, you do realize that there is a high perception of risk. And when you meet inspiring entrepreneurs like Kamal, and you see that despite, you know, often difficult operating environments, it is possible to create value to build sustainable businesses and build profitable businesses and be able to have an impact on the community I which you work.
MARTIN: Arjuna Costa is the director of investments with the Omidyar Network. That's a global investment firm, a philanthropic global investment firm. Kamal Budhabhatti is CEO of Craft Silicon, a financial services company based in Kenya. Mr. Budhabhatti's company was the winner in the Africa Awards for entrepreneurship competition. They were both with us from the studios of the BBC in Nairobi, Kenya. Thank you so much for joining us.
Mr. COSTA: Thank you, Michel.
Mr. BUDHABHATTI: Thank you, Michel.
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