Interview with Sapna Shah
By Ian Hadden
Sapna Shah is a portfolio manager in Acumen’s East Africa office. I was lucky enough to catch up with her in London a couple of weeks ago when she gave me some fascinating insights into life on the ground with Acumen in Africa.
Welcome back to London! Could you introduce yourself to the London+Acumen community?
I was born and grew up in Kenya and moved to London for university. After getting my degree from the LSE I began a career as a banker in corporate restructuring. A couple of years ago, my husband and I decided to up sticks and go back home to Nairobi – I realised that I was at a crossroads in my career, that I wanted to create impact at a deeper level.
I wanted to put my corporate experience to good use, so when the opportunity at Acumen’s East Africa office came up I jumped at it. It was the perfect way to use my banking skills to help make the impact I was looking for. After a pretty tough assessment process I was lucky enough to be offered a post as a portfolio manager. And here I am.
What elements of your UK experience have helped you, and what have you had to learn afresh?
My experience from my base in London has been mainly helping turn around companies that have gone through some sort of financial difficulty. Anyone who’s been in that situation knows one thing that’s crucial – cash management. You can be generating revenue, you can be making profits, but if you run out of cash it’s all over. It turns out that this is just as important for the companies that we invest in too. But it’s equally important to plan well ahead too – you’ll not be surprised to hear that it always takes a lot longer than you think to land the next round of funding!
Another area where my experience from London comes in useful is in building and sustaining relationships. Life as a social entrepreneur in East Africa can be a pretty rough ride, and there needs to be some solid trust on both sides of the investment equation. That’s one of the reasons we can take quite a while before we invest in the first place. From the very beginning we need to have honest and frank conversations about what Acumen is in the deal for, and how this is supported by the core purpose of the enterprise.
As for what I’ve had to learn afresh, it’s getting under the skin of what social impact means and how we measure it. How is the business we are investing in directly serving the poor? How are we measuring impact? Are there any differences with consumer behaviour at the bottom of the pyramid?
What practical difficulties do social enterprises face in East Africa?
There are some challenges that all businesses in East Africa face. Infrastructure – transport, electrification, sanitation, communications etc – is a huge problem. Governance is often weak, so for example contracts can be hard to enforce. And security can be patchy. These are long-term problems that aren’t going to be fixed within the timeframe of a typical Acumen investment.
Unfortunately, social enterprises sometimes face these problems even more than a typical business would. For example, distribution is an enormous challenge for a company whose social purpose is to serve the rural poor. How on earth do you get your solar lantern out to that last mile – or even that last 100 miles – when transport is so poor? And when, as a result, there are very few agents or distributors that can stock it?
We find that the companies that are doing better are those that are thinking about innovative ways of solving these problems. So, can a micro-finance company disburse their asset-backed loans to smallholder farmers instantaneously via mobile phone payments instead of physically sending cheques? Or can a solar lantern company partner with rural schools to use them as a distribution hub? Or can a service provider build loyalty by using existing networks of trusted agents to convert mobile payments into cash when needed?
What are you looking for in a social enterprise in East Africa?
We are looking for a package of things.
The first is what I talked about above – innovation. Our most successful investees don’t only solve problems for themselves, but they also generate the new thinking that catalyses entire new markets for others to build even further.
Secondly, marketing is crucial. Have they really thought about how they are going to convince their customer to buy their product or service? For pretty obvious reasons, people on very low incomes are highly risk averse, so they need two things to persuade them to buy. Firstly, they need to understand that the problem that the product is trying to solve is real; for example, it will be hard to persuade people to buy a clever water filter if they don’t see the link between dirty water and disease. Secondly, they need to see that the product or service will actually solve that problem and that they can afford it.
Another crucial part of the package is exceptional human capital. That’s a fancy term for talented, motivated people. This can be difficult because the social enterprise sector has a pretty low profile in East Africa and pay is usually not competitive with the corporate sector. So for example the typical route for a talented East African university graduate is a major multinational, not an early stage social enterprise. This means that when we see a company that knows how to attract great people that’s a huge plus for us as investors. Juhudi Kilimo is a great example – it has managed to communicate its mission so effectively that it has attracted very experienced professionals from major corporations who are looking for ways to put more meaning into their work.
Any advice for someone in London who wants to help tackle poverty?
Why not dig around a bit and find out more about the market-based organisations that are out there – I mean the ones that really pushing on the boundaries? I think the key questions to ask are: are they genuinely serving the poor, what are they doing that is different, and are they truly market-based with revenue that can sustain their business long term? And you know what, the people running these sorts of companies are pretty smart and have great stories to tell! You can certainly contribute financially (either directly or via an aggregator like Acumen) and we would absolutely encourage that. But when you start talking to people out there you might be surprised by other ways you can contribute, even if it takes a while to figure out your niche. Get emailing, get talking, and see where it leads.
Also, if you’re a very senior person with a successful career behind you, you can make a big difference with a small amount of your time. Have you been a board member of a large company? Have you been responsible for large-scale operations? If so, your experience will be very relevant to social enterprises anywhere in the world. Can you provide mentorship for entrepreneurs, or even for Acumen staff? If that sounds like you then please get in touch – we would love to hear from you.
And finally – what is there about your job that makes you smile?
I smile a lot at work! What’s been wonderful for me is coming back home to see it in such a vivid new light. When I was growing up I was very much a Nairobi girl, but since I came back I’ve seen not only my own country but its neighbours in ways that are so rich, fascinating and touching.
And that really makes me smile!
Well, us too!
Sapna was a speaker at the London+Acumen event Opportunities and Challenges for Social Enterprises in East Africa. Along with two other outstanding speakers (former Global Acumen Fellows Shane Heywood and Tamsin Chislett) she shared valuable insights about her journey in Kenya. To find out more about the event, get in touch with London+Acumen or click here to view the event pictures on our Facebook page.
About the interviewer: Ian Hadden works with organisations, from the financial services sector to central government, to help them define and deliver long-term change. Ian is also a writer and sometime photographer.