APPROACH AND METHODOLOGY
Enterprise Zimbabwe's approach is to catalyze partnerships between investors and social development and SME and entrepreneurship organizations that have specialist knowledge to undertake work on the ground. The key measure of Enterprise Zimbabwe's success is the amount of funds, in-kind goods, and human resources leveraged to support Zimbabweans rebuild the socio-economic fabric of their society.
Social enterprise partners will take responsibility for monitoring and evaluation of each social investment based on impact criteria specified in partnership contracts. Enterprise Zimbabwe will build a database and issue reports on investment opportunities, due diligence, and impact analyses for investment partners.
IMPLEMENTATION, TIMELINE, AND DELIVERABLES
- Three founders join with initial investment: ,000/year
- International investor connection trip
- Preliminary research to shape concept; pilot investments scouted in programming niches
September 2010-February 2011
- Launch: 21 September
- Register Enterprise Zimbabwe as a legal entity with executive board, business plan, and systems
- Two additional founders commit ,000 each, reaching target of million
- Establish Global Advisory Board
- Recruit core staff
- Media announcement and communications products: 1-pager, investment booklet, website
- Make pilot investments: social development and SMEs/entrepreneurship
International roadshow, high-level speaking engagements, and connection trips: Engaging donors with ministerial-level officials and social initiatives to catalyze partnerships and fundraising (continuing annually)
March 2011- February 2012
- Over million in new investment to be committed and mobilized
- Based on growth and performance, additional founders to be secured/renewed
- Research and impact reports on investments in SMEs/entrepreneurship & social development to be published (increasing yearly)
- Match-making database to connect external investors with local opportunities
- Enterprise Zimbabwe contributes to positive perception of Zimbabwe as investment destination
- Over million in new investment to be committed and mobilized
- Demonstrate successful new model for rebuilding in post-conflict countries
- Position EZ as Zimbabwe's leading non-profit partner to international donors & investors
Just emerging from a complex, intersecting, and multigenerational crisis of governance, human rights, economic and humanitarian issues, spanning more than a decade, Zimbabwe is at a point of opportunity.
The economic meltdown has destroyed huge numbers of jobs and livelihoods. Unemployment is now 95% ('Zimbabwe,' CIA World Fact Book, 2010: <https://www.cia.gov/library/publications/the-world-factbook/geos/zi.html>) and 81% of the working-age population struggles to get by in the informal economy. ('The informal economy, SMEs and the Missing Middle in Zimbabwe: Some Observations', Working Paper #9, Comprehensive Economic Recovery in Zimbabwe Working Paper Series, UNDP, 2010: <http://www.undp.org.zw/images/stories/Docs/Recovery%20Paper%209.pdf?3a1e...).
By late 2008, half the population needed food aid, water supplies had broken down, a cholera epidemic had claimed thousands of lives, public schools and hospitals had closed, and economic mismanagement and hyperinflation of more than 230 million per cent had brought the economy to a halt. Life expectancy decreased from 60 in 1980 to 34. ('Zimbabwe' country profile, The Elders: <http://theelders.org/initiatives/zimbabwes-crisis>).
Some of the key characteristics of this period that have come to be widely accepted as the 'Crisis' in Zimbabwe include:
1. Steep declines in industrial and agricultural productivity. In the last seven years, Zimbabwe's agriculture has shrunk by half while large-scale commercial farm output has shrunk between 50 and 70 per cent. (Source: 'Zimbabwe Agriculture on its Knees,' New Agriculturist: http://www.new-ag.info/developments/devItem.php? a=421 <http://www.new-ag.info/developments/devItem.php?%20a=421>).
2. Hyperinflation of historic proportions reaching 251%.
3. Loss of trust in institutions of economic governance and management
4. Deep informalization of the working class and high unemployment
5. Internal human displacement and high levels of outward migration - what is generally referred to as the Diaspora
6. The emergence of deep pockets of vulnerability among citizens, especially women and girls
7. Land disturbances, nutritional and food insecurity, hunger and related illnesses
8. Strained relationship between the Government of Zimbabwe and in particular Western Governments, partly due to concerns over human rights
Following this, within Zimbabwe livelihoods have become precarious as general purchasing power has shrunk with the collapse of much of the formal economy. With the domestic informal economy saturated, many Zimbabweans have left, or rotate in and out of the country. (While the data is not comprehensive, it is broadly estimated that as many as 4 million Zimbabweans, or as much as a third of the population, have moved into The Diaspora, taking up legal and illegal or refugee status in their host countries. The last official population census in Zimbabwe had set total population at 12 million people.)
Enterprise Zimbabwe believes it can harness and support the people of Zimbabwe's tradition of entrepreneurship and vibrant business and trading spirit to support Zimbabweans in re-building their communities and enterprises.
The role of the Committing Organization
While large-scale humanitarian assistance projects are currently underway, there is little or no economic development aid flowing into Zimbabwe at the moment. The role of Enterprise Zimbabwe in addressing these problems is to facilitate the flow of philanthropic and commercial investment into the country. EZ will act as a matchmaker between investors and front-line social initiatives, catalyzing investments that will stimulate Zimbabwe's economy and contribute to long-term socio-economic development. EZ will operate primarily in Zimbabwe and apportion one third of its outreach efforts at the regional and global level, leveraging the networks and relationships offered by the The Elders, Enterprise Zimbabwe's Founders and Advisory Board.
Enterprise Zimbabwe's activities will focus on:
1. Matching providers of capital with implementers in the development sector, specifically supporting SMEs & entrepreneurship and social development investments
2. Engaging members of the business, philanthropic, and investment community with the positive steps being taken, and opportunities that remain to contribute to socio-economic development
3. Arranging meetings between global leaders with a common interest in taking decisive action to improve conditions in Zimbabwe
4. Undertaking due diligence and audits of existing SME and social development initiatives that investors can access immediately
Enterprise Zimbabwe will focus on two areas of investment:
1. Entrepreneurship & Small- to Medium- sized Enterprises (SMEs)
2. Social Development
AREAS OF INVESTMENT
1.Entrepreneurship & Small- to Medium- Sized Enterprises (SMEs)
The goal of the first area of investment is to boost the long-term economic growth of the country by creating opportunities and resources for small- to medium- sized enterprises. The role of Enterprise Zimbabwe is to match providers of capital (donors, funding institutions, investors) with implementers in the Zimbabwean SME space (including fund managers of SME finance institutions and individual enterprises).
Zimbabwean entrepreneurs who attempt to start up or grow businesses face the problem of lack of access to finance. SMEs are often deemed too large for microfinance yet deemed too risky an investment for banks, development institutions, and venture capital because they lack collateral and track record. Enterprise Zimbabwe will focus on directing resources toward this part of the economy.
Financial institutions in this space operate under a range of mandates, including profit generation, poverty alleviation, and social investment. Enterprise Zimbabwe will aim to channel capital to each type of institution, yet is committed to maintaining its non-profit status and will not undertake activities aimed at commercial gain. While the trust will maintain separation from any commercial profit-generating enterprise, its value will be in bringing deals to high-quality entrepreneurs.
There are multiple SME financing vehicles throughout Zimbabwe but not all of these are active and not all of them target SMEs - some are pure microfinance players. The problem with most institutions that focus on SME funding is that the size and terms of their loans tend to be small, ranging in size from to approximately ,000 and in term length from one month to a maximum of six months. This is insufficient to foster any significant growth in SMEs; it merely allows them to maintain their status quo. It is likely that Enterprise Zimbabwe will look at either new funds being established in the country by Zimbabweans, or at regional and international funds. This may involve engaging with these funds to encourage them to enter the Zimbabwe market if they are not already active in the country. The role of the trust will be to support the efforts of these funds in Zimbabwe by helping them to raise capital for their funds and programs. Additionally, Enterprise Zimbabwe will establish a screening process for selecting the fund managers.
In this area the trust will also explore models to facilitate direct investment and cultivate entrepreneurship, building on experience from the Branson Center of Entrepreneurship in South Africa.
Investment in Social Development is the second area that Enterprise Zimbabwe targets. Working closely with relevant government departments and existing NGO initiatives, the trust will play a role in directing philanthropic donations towards social projects. The key differentiator between this role and current NGO initiatives is that the trust's focus will be on development and sustainable projects, rather than immediate humanitarian assistance.
Enterprise Zimbabwe will act as a conduit for donations and grants. Its role will be to gather, collate, and undertake due diligence and audits of existing social development initiatives that investors and donors can access immediately. Donors can disburse funding and may also contribute their time or support to specific initiatives. The trust will work closely with the established NGOs to ensure no overlap of work occurs and to coordinate the process of auditing the beneficiary organizations.
The Social Development program will focus on the following sectors:
Healthcare - Examining what projects are underway to improve the healthcare system in Zimbabwe, their targets, what is needed to reach those targets and how donors can get involved.
Education - Learning the current challenges holding back educational development, what resources are needed to unlock those challenges and how donors can get involved.
Women's economic empowerment - Mobilizing advocacy and economic empowerment groups to ensure that women's issues and concerns are raised and ensuring that women's organizations have sufficient funding to meet their objectives.
Agriculture - Understanding what projects are underway to promote small scale farmers, what equipment is needed and how resources can be directed to meet these needs quickly and effectively.
Seeking: Financial Resources, Implementing Partners, Best Practice Information.
Offering: Financial Resources, Implementing Partners, Best Practice Information