Author: Sam Floy

Training rats to save lives (no joke) in Tanzania, with Georgies Mgode from Apopo

Overview

Humans are good at a lot of business functions, but one where animals have got us beaten is at sniffing things out.

Rats have the best sense of smell of all mammals and can detect landmines and turburculosis to a much higher accuracy and in a fraction of the time of the best detection technology that humans can manage.

Apopo trains rats from birth and then sets them out to do the job of detecting things which humans struggle at.

Georgies and I discuss the applications of Apopo rats, the school program that they go through and how it’s easier to train the Giant African Rat rather than a dog.

This one is a lot of fun and so I hope you enjoy.

 

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Here are some of the key quotes:

“Apopo is part of a university department”

I’m a professor at the university, and the department I am in is all about training the Giant African Rat for useful purposes.

“Rats detect land mines and turburculosis (TB)”

We train the rats to find solutions for problems that are difficult for humans to solve.

“The rats go to school”

Some are at kindergarten. Others have graduated. They progress through different classes learning along the way until they can off into employment.

“We use the Pavlovian method”

From when the rats are born they are trained in the laboratory to get them used to humans, then obeying command, then identifying a target. Typically it takes 6 months to do the program.

“Rats have a super developed sense of smell”

They have the most olfactory receptors of any mammal which means they can discriminate whether a sample has TB microbacteria or not incredibly quickly. 120 in 20 minutes vs 20 in a day for laboratory technicians

“TB is detected by a spit sample”

These are collected anyway when a patient goes into hospital and once there is enough, the rats sniff them out. 40% of the time rats identify samples which humans missed. This is because rats can smell the microbacteria of TB, rather than the actual TB present in spit sample which can sometimes not be present.

“It takes 200 miliseconds to detect”

The rat spends 3 seconds scratching at the spit sample to indicate when it finds a positive sample.

“Rats scratch at the landmines”

It sniffs out for TNT in a field and when it finds a place, it stops. Because it is very light, it does not set off the landmine.

“They live to about 8 years old”

In the wild things are more competitive, though after eight years they start to wind down the amount of work that they do.

“Apopo customers are anyone interested in saving human lives”

We are a humanitarian organisation whereby we are hired by organisations such as the World Health Organisation. The major beneficiaries are people in areas of high levels of landmines or TB.

“Individual donations are accepted!”

There are many ways for people to support what Apopo is doing, such as adopting a rat. More details at the bottom.

“You could also train wasps and worms”

These are other animals with a good sense of smell. It’s possible to train dogs to sniff out cancer, however it takes a long time to train a dog which somewhat makes things more difficult.

“Taking our rats elsewhere”

The next few years will be spent training rats and applying them in areas of Tanzania where there is a high probability of TB, such as prisons and refugee camps.

Social Media Follows etc.

Pavlovian conditioning

BBC article on Apopo

Adopt a rat: www.apopo.org

Facebook: www.facebook.com/heroRAT

Twitter: https://twitter.com/HeroRATs

Uber for ambulances. Why most Africans can’t call 911 and how Flare solves this, with Caitlin Dolkart

Overview

There are some ideas that, when someone tells you about it, your first reaction is surprise that there even needs to be a business

I had this reaction about Flare, which is improving how people get access to emergency care in Kenya.

Described as “an Uber for ambulances” it is consolidating the 50 companies that exist in the country so that there is one place for patients to call to get fast emergency care.

Essentially making a something akin to 999 (or 911 in the US).

We discuss the current state of the emergency healthcare market across Africa, the stepped process in which they are deploying the app and educating the population that this is a service that can actually exist.

It’s one of the most interesting conversations I’ve had and so I hope you enjoy

 

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Here are some of the key quotes:

“We saw a supply and demand imbalance”

Working in healthcare across Africa for several years, my co-founder and I saw a need to bring people closer to the sparkling new hospitals that are being built in the region.

“Our first focus is emergency response”

In Kenya, and indeed across the region, there is an abundance of ambulances

“There is no equivalent of 911”

Each of these private healthcare companies exists independently and has its own unique phone number. There is no centralised number to call.

“It takes 2 hours to get an ambulance”

Whereas in New York its 7 minutes. Flare is here to really improve upon this latent inefficiency.

“Most people don’t even consider calling an ambulance”

The process is so painful (identifying location, negotiating price…) that people will typically call their friends, a taxi, or other means with which to get them to a hospital.

“The ambulances look similar”

They have sirens and can overtake traffic and contain all of the supplies that are typical in an ambulance in the UK or the US.

“Ambulance companies are for profit”

They look to generate revenue from the call outs they make to cover their costs. Though in 20% of the time they will take someone in, say, a roadside emergency and not charge.

“$55 per trip”

The cost of a trip in an ambulance is between $30-$100. The spread is owing to time to get there, but also the sophistication of the equipment in the vehicle.

“Flare with stitch together all of the companies”

Right now there are 50 different phone lines. As a customer I would contact the nearest ambulance to me.

“Customers will download the app”

The main benefit for this is the geolocation of patient. It makes things easier in terms of matching with the closest ambulance.

“Flare is for profit”

We will take a percentage of each trip. Right now demand is really suppressed and so we think that by creating a better user experience, we can really grow out the market for emergency care.

“We see a public-private partnership”

At the moment, the state doesn’t have the resource to offer this service. Flare are carving out the portion of society who can pay for the service with a view of extending it later, probably with the help of the government.

“To start, it will be like Uber on the back end”

Our first phase in rolling out Flare is to manage the behind the scenes logistics of deploying the correct ambulance. Patients will still have the same experience, but things will be more organised.

“India does something similar”

The benefits of launching in a developing market is that there are no existing systems to compete with. You not need to unwind current behaviours, you can jump straight to the solution.

“It’s not just Kenya”

The market structure of many small ambulance companies (where Flare gives most value) is present across other sub-Saharan countries, meaning there is a room to expand.

“You need a neutral stitcher”

Having no affiliation to a particular ambulance company means that Flare are in a good position to be organisation to consolidate the players in the industry.

“No one realises there could be a better way”

From customer interviews I’ve been surprised to see people think through how they would be get to a hospital in an emergency. People don’t think it’s possible to call an ambulance.

“There are ways to shortcut people using the app”

It could be in terms of educating people, or having the app pre-downloaded, or linked to the “Emergency” features that many smartphones have in-built.

Social Media Follows etc.

Blog: blog.capsule.co.ke

John Oliver on 911:

Inuka Pap uses mobile money to help low-income savings groups, with Waweru Kuria

Overview

Cash is risky business, and in Kenya, mobile money is big.

People living in rural areas are liable to have their life savings lost if it is kept under the mattress.

Many engage in lending co-operatives whereby a community organisation acts as a bank for people who need money in an emergency.

This is, however, pretty archaic and inefficient meaning people can’t get instant access to cash when they need it quick.

Using a digital platform that connects mobile money to these rural co-operatives, Inuka Pap is making it possible for people to get access to the funds in an instant.

Waweru and I discuss what the lending landscape looks like, their social mission of providing free insurance, and the blurred lines around whether they themselves are a bank or not.

As a side note, the day after I interviewed Waweru he pitched Inuka Pap at Seedstars, a global start up competition, and won the title for Kenya! You’ll see that he has knack for storytelling.

Also, a car alarm goes off in the background right at the end, so apologies for that…

In any case, I hope you enjoy!

 

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Here are some of the key quotes:

“The dream started many years ago”

I have always worked with ways of improving people’s lives, through churches and other organisations. Inuka Pap started properly in January 2016.

“We don’t save money in banks”

In rural Kenya, where I grew up, people do not put their money into an actual bank account. Instead there are savings co-operatives (SACCOs) which communities are a part of.

“Getting a loan took 2 days – 2 weeks”

In a moment of needing a loan, it would take time to actually get the cash you need. This is due to the logistics of issuing cash and travelling to the SACCO head office.

“Inuka Pap means…”

Rise up, instantly.

“Our platform does mobile money for lending co-operatives”

Mobile money penetration is >90%. The infrastructure works whereby even in deep rural areas, someone who is sent money can withdraw cash from a kiosk and pay for services immediately.

“We don’t deal with who gets what”

Co-operatives are in the business of knowing how much each farmer can and should receive. Inuka Pap isn’t directly involved with who gets what, it simply makes the payment of these transactions much more efficient.

“A cash environment is risky”

When people keep physical notes stored in their house for emergencies notes are liable to go missing to drunken husbands or hungry rats. It also makes it harder to get a credit history with the co-operative because all of these savings are kept centrally.

“People don’t care about Inuka Pap…”

They care about their co-operative. Once the co-operative uses Inuka Pap individuals feel comfortable accessing their money much quicker.

“Our user base is now 12,000”

In less than eight months. Many individuals are using the service through their co-operatives across the country.

“Some co-operatives have been around for hundreds of years”

For example one that is based around a coffee planting community. The running of these co-operatives has been in the family and so they are deeply set on how to run them and are very comfortable with how they live. This means they are less open to Inuka Pap, at first.

“Small co-operatives take it up quickly”

They are less set in their ways and are generally forward looking when it comes to running their co-operatives.

“We are paid 15% of what co-operatives make”

Co-operatives make money on the interest that they charge to individuals. Inuka Pap earns 15% of this amount.

“The loans are high interest”

They’re not for 12 months but instead are more like a 30 day emergency loan. Being through a co-operative, all of the money goes back to the group which has benefits.

“There are 16,000 co-operatives”

Serving 13 million people. And so we are confident that the market size is massive.

“After 5 million people we’ll move out of Kenya”

There is pent up demand not just in Kenya but also around the rest of sub-Saharan Africa. We’ll move on there afterwards.

“Talent is tough”

Attracting the right people to work at the company is difficult. Our CTO works remotely from South Africa.

“We’ve kind of made our own co-operative”

Individuals can access loans directly through our app which, because we own the money being paid back, is pretty profitable.

“Direct savers can get free medical insurance”

Using the retained revenue we are paying for users of the platform to have free medical insurance. We’re the first in Africa to do this.

“A lot of businesses fail because someone got sick”

In an emergency when a family member has to go to hospital the only way to access funds is to take capital out of the small business that someone runs.

“Are we a bank? No idea!”

We think of ourselves as a platform that helps people save and access money. The government are on our side, but we’re not sure whether to consider ourselves a bank or not.

“There’s a big opportunity to partner with telcos”

In every country the mobile providers are looking to push their mobile money platforms. If we can have close ties with these services then it can get Inuka Pap to a wide ranging audience very quickly.

“We are good to learn from others”

At Inuka Pap we are very open to feedback and are wanting to learn from others. If there are individuals or organisations who want to come to the office and show us what we can do better, we’d love to hear from you!

Social Media Links etc.

Website: www.inukapap.co.ke

Twitter: @inukapap

Email: [email protected]

Inuka Pap wins Seedstars Nairobi

Treasure from trash: how The Recycler creates value/ maggots from waste in the booming Dar es Salaam

Overview

One of the by products of a country’s development is the amount of waste that is produced.

As populations grow the number of, say, plastic bottles that are consumed increases.

It’s costly both financially and environmentally to transfer these materials to dumpsite and Matthew from The Recycler wants to change this.

His business is all about creating value out of products that would otherwise be thrown away to increase the amount of recycling that occurs.

We discuss why Tanzania is the prime location for this type of business, the applications of waste, and how he is growing maggots as a much more sustainable form of chicken feed.

 

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Here are some of the key quotes:

“We’re a waste management and recycling company”

We collect a wide range of items for big organisations, and then sort it out into recyclables.

“We also grow maggots”

This is about adding value to organic waste.

“Most people took waste to the dump”

At such volumes that they were going twice a day. We now save them money by sorting it and reducing the number of trips they need to make.

“Our waste goes to local companies”

The whole philosophy is about giving value to materials that would otherwise go into a landfill. This means selling white paper to an envelope factory etc.

“It’s a great way to create jobs”

You’re literally making jobs out of things that people were throwing away.

“So… maggots”

60% of waste in Tanzania is organic. The conditions in Tanzania are perfect for these types of maggots to grow.

“Chicken feed”

The maggots are used to feed chicken. It’s much more sustainable than soy or fishmeal. And it’s also what chickens have been eating forever.

“We have commercial and individual products”

As well as a large scale process for these maggots, we have also developed a bin that can be used by families. They keep their organic waste separate and soon maggots start appearing.

“Make bins accessible as possible”

We want to make it as affordable as possible. People might then be able to sell the excess maggots for chicken feed. Rough sums are a two month payback.

“Dar es Salaam is the third fastest growing city in Africa”

The place is projected to grow rapidly in the next twenty years and so with that waste is going to be increasing.

“The Tanzanian recycling market is undeveloped”

In Nairobi, the price for recycled materials is up to 5 times as high. The industries are much more used to tapping into a recycling infrastructure.

“Next, we’re looking to informal collectors”

The citizens earning the least in society are typically those collecting up plastic bottles for resale. If we can create value from other products, we can pay people more.

“Shredded plastic bottles are turned into T-Shirts”

Informal collectors pick up recycled products, sell to middlemen who then ship it to China so that it can then be turned into (polyester) T-Shirts.

“My experience of business in Tanzania has been very positive”

It might not be the case for everyone. A lot of people cite that Tanzania is one of the worst places to do business, however I haven’t felt that.

“Our prices differ”

In some instances we have a weekly pick up service, in others we give rebates to companies where we can sell on the waste.

“Glass is incredibly sustainable”

The bottle deposit system of returning a glass bottle once you’ve finished your Coke is one of the most environmentally friendly methods. There’s much more resource involved in recycling plastic bottles.

“Zero waste”

It’s a new movement which is anti-recycling. It’s about designing products in such a way that we don’t throw things away.

“How can separation occur naturally”

If people have an incentive to separate their organic and other waste because there is value in it, then that saves a lot of effort.

Social Media Follows etc.

WWF article: soy bad for the planet

Zero waste movement

Website: www.recycler.co.tz

Facebook: Recycler Tanzania

Escaping the rental poverty trap: how Tugende gives motorcycle taxi drivers the ability to own

Overview

A recurring theme across East Africa is how owning an asset is a path out of poverty.

It’s a bit of a chicken and egg problem, as banks typically require an asset as collateral before giving a loan.

Tugende gives people their first step on the ladder.

Starting as a side project of some bikes that Michael bought for his motorcycle friends, Tugende has now grown into an organisation that thousands of drivers use on their path to ownership.

Michael and I discuss the issues of the rental poverty trap, the process around how they mitigate risk, and how he sees is customers as micro venture capitalists.

It’s a very insightful about the financing industry in Uganda, and across the region. I hope you enjoy.

 

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Here are some of the key quotes:

“Tugende means ‘Let’s Go’”

In both Luganda (the local Uganda language) and other East African languages it’s a common phrase.

“Motorcycle taxis are very popular”

The 100,000s of motorcycle drivers in Uganda can’t get access to credit, and therefore end up renting their bikes.

“The rental poverty trap”

This is where all money is being spent on renting an asset and there’s none left to save to then progress.

“I bought three bikes”

Tugende started when I financed three friends so that they can own their own motorcycle. It was very much a side project which turned into my main endeavour in 2012.

“Customers know their economics better than we do”

Some people have several motorcycles which they buy, own and then sell on for cash.

“Payments go towards ownership”

The weekly payments are about 15% higher than when they pay a landlord, though the light at the end of the tunnel is that these are all going towards them owning the asset.

“Motorcycles are the lifeblood of the economy”

They move agriculture, people and goods in a quick way, and provides employment and earnings for a large swathe of the population.

“They’re a good asset”

Motorcycles are fairly durable and can have fairly regular/ predicatble cash flow. It helps us mitigate against the risks involved.

“We don’t fear running out of customers”

Exact numbers are difficult to gauge but our best guess is 400,000 motorcycle drivers in Uganda.

“Almost every driver is male”

In Kampala there was one female driver who was well known. She know works for Tugende…

“We have a robust screening process”

This is to cover for not having a collateral asset and some of the other constraints that banks have. We look for “responsibility and roots” – will other people vouch for you? Benefit of the doubt is given.

“Buying bikes isn’t our gig”

Drivers will find a bike that they want to buy and come to us. We don’t bother with sourcing motorbikes and leave that to the customer. We’re brand agnostic.

“Micro Venture Capitalism”

Our customers know their communities better than we ever could. The cash they earn from selling a second-hand bike is like a seed fund.

“We hire for problem solvers”

A big part of our business ethos is resilience and being prepared for the unexpected. People who work for Tugende might not have the best academic results, but they’re great at acting under uncertainty. A lot of people have been hired from the boda boda community.

“Tugende is an economic opportunity company”

We don’t look at ourselves as a motorcycle leasing company. We’re in the business of giving people assets for them to own and leave the rental poverty trap.

“Insurance is a growth area”

Looking forward, as well as offering different asset classes we will also look to extend our insurance partnerships to our customers.

“Helping people help themselves”

This is our mantra. We’re about finding people who already know how to make money, they just need some help unlocking the opportunity. This isn’t bound to just motorcycles.

Social Media Follows etc.

Facebook: TugendeDriven

Website: www.tugendedriven.com

Creating linkages in agriculture to improve farmer incomes, with Maria Biswalo from Ninayo

Overview

A big issue in Tanzania, and indeed the rest of East Africa, is connecting agriculture buyers and sellers.

The fact that produce goes bad because it can’t find a buyer is a real problem
in terms of the incomes that farmers can receive.

Ninayo is a marketplace where farmers can list their produce, giving buyers a place to search for goods.

Maria and I discuss how the marketplace is being built, the plans for making revenue and how they are using Facebook to their advantage.

We were in a cafe and so at some point you can hear people in the background. We’ve done our best to edit this out, but apologies if you find it distracting.

 

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Here are some of the key quotes:

“We’re an online trading platform for agriculture”

It’s about connecting food supply and demand for the people of Tanzania. There are avocados going rotten in some parts of the country and people paying high prices in another. We are the bridge between them.

“Farmers are already seeing better prices”

People are using the platform and having the connection between buyer and seller has meant many are getting value from transactions that were previously costly.

“You access via your smartphone”

Farmers log on to the website, or through Facebook, and then follow the steps through to listing the produce that they have.

“We’re pre-revenue”

At the moment we just put people in touch with each other for free. In time we will look at ways to extract value from the arrangement.

“There’s a big discrepancy…”

In what is being produced, and what is reaching the market. A lot of produce is going off as it can’t find a buyer.

“Currently it’s middle men”

The main route between buyer and seller is to go direct, or to a middle man who has power over what price they will buy at which often means farmers lose out.

“There are different means of monetising”

One could be to take a percentage of the sale. Another could be to sell the data that we’re collecting. Also advertising agricultural products.

“The service is developed in San Francisco”

I am currently heading up the operations in Tanzania, with Jack the founder relocating out here in the new year. The tech team are based in San Francisco.

“A partnership with Facebook means it’s free to go on our website”

The internet.org project means that access to Facebook is free from a smart phone, even if you do not have a data plan. Ninayo has just been accepted as one of the “Free Basics” meaning there is no cost to visiting the site.

“Tanzania has good infrastructure…”

… but not the services. The government is looking to help push services which can help the country develop, such as Ninayo.

“Our funding comes from Expa Labs”

Their remit is to help startups that are improving livelihoods through access to technology.

“Trust is key”

Similar to anything that involves a behaviour change, people need to be able to trust what they’re doing. We need to make sure that farmers and buyers feel that they can rely on the Ninayo platform.

“Ninayo means ‘I have it’”

In a marketplace “Does anyone have mangoes?” “Ninayo!”. I have it, come get it.

Social Media Follows etc.

Internet.org: (Facebook’s Free Basics)

ExperLabs: programme details

Website: www.ninayo.com

Facebook: Ninayo

How Lynk is building a “TaskRabbit for Kenya”, with the founders Adam and Johannes

Overview

A huge amount of employment in East Africa exists in the informal sector.

People often working on an ad hoc basis with little record of what they do.

This means that it is difficult for workers to build a reputation, and for customers generate trust.

Adam and Johannes at Lynk see a great opportunity to use technology to bring value in this broad sector.

We talk about how the founding story of their services marketplace above a hardware store, the processes around matching customers and workers, and their vision for how data can bring benefits to whole sector.

It’s a super interesting episode, and I hope you enjoy

 

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Here are some of the key quotes:

“80% of workers in Kenya are in the informal sector”

We can add a huge amount of value in this sector where payslips and mapped career progression aren’t really a thing. Like LinkedIn for the Linked Out.

“TaskRabbit for Kenya”

Is how some people think about what it is that we offer.

“We used to live above a hardware store”

We would spend the day talking to these informal workers, and then at night time go and do coding to build around the product.

“700 interviewed, verified workers”

These are people who we have on Lynk and that customers can choose to hire. They are across 150 different categories. An informal worker is known as a “fundi”

“We’ve gone broad as the market is bigger”

It would have been easier to pick, say, one category/ industry to work in, however we didn’t feel that there were that many, say, plumbing requests in Nairobi each month. Our way is harder, but bigger.

“There are lots of processes needed”

The job isn’t an easy one, as it’s not just a classifieds site. We’re ensuring that customers and workers have a great experience.

“Most requests are reactive”

Customers are always coming to us and saying that they want X done. Our vision is to be able to suggest Y to them.

“Marketing is tough”

Word of mouth is really the main way that fundis get work, or they hang around by hardware stores to see if they can help. Adam and Johannes used to live above one of these hardware stores.

“We met at university”

Adam was finishing up at Google and Johannes had just finished his Masters. They were looking at doing an idea in Nairobi and a service marketplace seemed to be a big problem to solve.

“There are some behaviours we wish to change”

For example, timeliness. For a fundi it’s low on their priorities, however it’s something that customers really value. Teaching fundis about this is an important aspect to the business.

“… and others we will adapt to”

Like how fundis want to get paid. We identified a series of behaviours where we would adapt to the market, and others where we wanted things to change.

“We manually deal with each request”

Currently when a new request comes in we will clarify a few things with you and then contact the best three fundis who could do the job, and ask them for a detailed quote.

“A full service solution”

We don’t put up a big list of providers for customers to scroll through as we don’t think that’s the best user experience, and there are also issues with scheduling. Instead, a customer comes to Lynk and has a relatively high level of service.

“Payment flows through Lynk”

This gives protection for both customer and fundi. Customers can pay in a variety of ways, and we pay fundis through mobile money. Lynk’s commission is 10%.

“Most communication is through SMS”

Customers and fundis receive phone numbers when a job is booked and then communicate from then on. Depending on the complexity, Lynk may stay involved. Either way, fundis don’t all have the phone/ data package to want to communicate through an app.

“Being cut out is inevitable”

It will never be fully avoidable. Ensure that there are limited disincentives to using the platform, and just generally that there is value from the service. We’ve found that we’re being “cut in” more.

“The data is amazing”

We’re interested in providing a good service for a fair price. Going forward, we’ll be collecting lots of rich information which can be used in other areas.

Social Media Follows etc.

Facebook: Lynk Kenya

Twitter: @LynkKenya

Website: www.lynk.co.ke

Game-changing technology that allows those with low-income to purchase goods on credit

Overview

If you don’t have much money there are lots of things that you can’t buy.

This might sound simplistic, but in a country where a high proportion of the population have low disposable income it means that, as a manufacturer of products, there is a huge number of people who you can’t access.

Unless… you could just give it to them have them pay you back over time.

This is the opportunity that Angaza has seen, and they have developed a software platform to allow manufacturers to switch off devices if credit payments aren’t paid.

Doing so puts products in the hands of people who otherwise couldn’t afford it.

Lindsay is the Head of the Africa office and we discuss the history of the company, considerations for giving products on credit and applying their technology to a range of different products.

It’s also similar, but different, to BBOXX who featured on an early episode called “Solar Systems”. You might be interested in listening to that too.

 

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Here are some of the key quotes:

“Angaza is focused on Pay As You Go”

The challenge we’re looking to address is how to provide solar products on credit so that people don’t have to pay them completely upfront which blocks out a lot of the market.

“A software platform for PAYG products”

We began with a solar powered lamp and soon felt that the real value comes from being able to allow other manufacturers the ability to offer their products on credit. We partner with manufacturers and distributors.

“25,000 loans already”

This has come from working with 5 manufacturers and 30 distributors

“Everyone becomes a customer with PAYG”

If companies are only able to sell their products for cash they can only access a small percentage of the market. Angaza helps to grow the market.

“We can switch off products”

Using a broad range of technologies a device can be remotely switched off if, say, payments have not been made.

“Our partners pay us a licence fee”

In exchange for building PAYG products for manufacturers and distributors they pay a fee.

“The idea of credit has been around for a while”

Microfinance Institutions (MFIs) have been long been providing credit for an end-user. Traditionally once a loan has been given to an end user, the person is repaying the MFI and not the distributor.

“Tracking with pen and paper is tricky”

It’s laborious to can track of end users paying back for a product, especially as it will work regardless of whether the person stops paying back or not.

“Our innovation is switching off small devices”

A lot of the devices which can be turned off remotely are the larger solar home systems. Angaza has developed proprietory technology to bring this capability to a small solar lamp too.

“Angaza integrates with mobile money”

We can automatically switch off a product if a payment is behind based on whether payments have come in, such as with M-Pesa.

“Pay As You Go is a new space”

It’s far from obvious what is the best way to go about building a system for a PAYG product. We have a good idea, but haven’t yet written a bullet-proof playbook for manufacturers and distributors.

“It sometimes takes longer to payback”

Most people are paying back, but I have seen it taking longer than expected. This is for a number of reasons (head to 22:00).

“Is it Pay As You Go?”

Often it’s actually a fixed term loan and so that can cause some confusion. “Product loan” and “Lock out loan” are alternatives.

“We translate to local languages”

The founders speak English but we’ve designed the software and the platform to the language which agents are speaking.

“Considerations of connectivity”

The product offferings need to be related to the type of telco connectivity that exists in the environment of the end user.

“Angaza means enlighten”

In Swahili. Which was important for the founders in their starting market.

Social Media Follows etc.

Website: www.angaza.com

Facebook: Angaza Design

Twitter: Angaza Design

Why lack of working capital chokes the Kenyan food industry, and how Umati Capital solves this

Overview

Working capital in East Africa is tough to get your hands on.

Umati Capital are looking to help, using technology to give credit where banks won’t, typically through giving food producers an advance when a big order comes in.

Ivan and I talk about how the legal environment means issuing credit is tough, how they evaluate their clients, and their vision to professionalise the supply chain across the continent.

It’s similar to the SME Financing episode with Bakka from Patasente, so give that a listen too if you find this interested.

I also should note that the only room available in their co-working space was quite echo-y, and so the audio quality for this interview isn’t great.

A couple of answers get lost and so I’m sorry about that.

Nevertheless, I hope that doesn’t detract from what is a very interesting interview

 

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Here are some of the key quotes:

“My background is in banking”

I worked for Citibank across Africa. My co-founder has a background in Management Consulting.

“Banks require collateral to access capital”

This is a real blocker for small businesses looking to finance their operations. We’re using technology to open this up.

“We are working capital providers”

Our typical customers are food producers and we give them bridge financing when they receive an order.

“Supermarkets take 3 months to pay”

Imagine you are a cheese producer. You buy milk from farmers, turn it into cheese and sell it to a supermarket. The supermarket will accept it, but not give you the cash for 3 months. The farmers can’t wait that long and so the cheese producer has to find the money from somewhere.

“… and so a lot producers stay small”

If faced with the choice between small and regular payments or 10x sales through a supermarket, most will opt for the former as otherwise they’ll go out of business. They are thus bound to stay small.

“There’s a multiplier effect”

Not only does getting an advance smooth the operations, it also allows businesses to grow their business by constantly producing more of what they make.

“Cash flow based lending”

This is a concept in developed markets. If you can know with good probability that cash will come into a market then banks will lend based on that. That doesn’t happen with African banks, partly because there’s less trust that the courts will intervene.

“We make money by…”

Charging interest for the duration of the money being given. Typically this might be between 4-8% over 56 days.

“It might seem high”

Annualised you might think 24% annually seems expensive. However if access to this capital means you can grow your business by more than the interest you pay, it makes sense.

“There a multitude of checks that we make before releasing money”

When onboarding a customer we look into how many invoices have been unpaid previously due to quality issues etc. Then we look at the buyer and undertake a similar exercise.

“Buyers can find us pesky”

This is because we are holding them to account and essentially professionalising the industry. Our response is that professionalism yields a more stable supply chain.

“There are legitimate and illegitimate reasons for slow payment”

Sometimes the buyer is a middle man and so is waiting on their payment before passing it on. Sometimes though, buyers will choose to retain the capital within their business for other projects they are looking to finance.

“If the quality of the produce is bad…”

Then the responsibility sits with the producer. Umati Capital have a series of mechanisms whereby they reclaim the value in these instances.

“We’re going downstream”

The next phase of our growth is to work with our clients, and turn them into buyers. In the cheese example, it would mean providing finance for the milk producers.

“Technology is at the core of us scaling”

As we look to expand our offering to thousands of small-holder suppliers, we will use technology to keep things efficient and robust.

“Our money comes from…”

A variety of sources who are all looking for a short term return. These are institutional investors, high net worth individuals, and even crowdfunding..

“Clients assess us”

Small businesses may come to rely on financing from an organisation like Umati Capital.

“The market is huge”

Viewed as “SMEs who want credit” it’s massive. Agriculture concerns 25% of the economy and so Umati Capital has chosen here. Competitors have looked at other industries, but there’s place for plenty.

“Our vision is pan-African”

We see similar demand and demographics across the continent and so will be looking to expand our offering elsewhere.

Social Media Follows etc.

Get a Google News alert: (for Umati Capital)

Website: http://www.umaticapital.com/

Where does your tea come from? Toby Theobald from Chai Tausi in Tanzania explains

Overview

Tea is an product that has a strong industrial base in East Africa.

It’s been going for years, meaning that many companies have emerged and there is a pretty competitive landscape.

In this episode I speak with Toby, Operations Manager at Chai Tausi in Tanzania

We discuss the supply and sales network that they have in place, the best conditions for growing tea across the region and the considerations when it comes to making their blend.

I’ve spoken to a lot of high tech companies on my tour in East Africa but this is a proper old school business that we chat about.

I hope you enjoy it as much I did

 

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Here are some of the key quotes:

“We’re a tea packing company”

Based out of Arusha in Northern Tanzania. We blend and pack in Arusha and then distribute across the local market.

“Increasing costs led us to move”

We were originally in Dar es Salaam, but found that costs (financial and time) were getting high and so relocated the processing plant upcountry.

“Our tea comes from one area”

All of the tea comes from our sister company which ensures we have a steady supply. If we need more tea we can always find other producers in that region.

“Tea can be picked throughout the year…”

but it’s best to do it at certain times, especially after rainfall. It means there are peaks and troughs of supply over the year.

“Shelf life of 3 years”

This means it’s possible to stockpile to buffer for the variance, however this can be difficult with tight cash flow.

“Kenya and Rwanda have better tea quality”

In Rwanda this is owing to the geographical conditions. In Kenya, there is still good geography but there is also a learning aspect of having grown it for years.

“Tanzania has a less competitive market”

Which means that, as well as having lower costs, we are able to make the most of being close to the market. We’re really competitive on price.

“Tea is drunk differently in Tanzania”

In a big pot the tea, milk and sugar is boiled up and then drunk throughout the day. Often it is eaten with bread for breakfast.

“Quality comes from…”

Colour, aroma and taste. Our factory manager checks the quality every morning by tasting samples that come in.

“Blending is key”

This is all about mixing high grade and low grade tea. Costs can come down by combining the grades meaning we get a good quality tea at an affordable price.

“Tea prices vary”

And so we’ll adapt each blend based on the price and availability of the tea that we have available.

“The factory runs Monday to Saturday”

The set up takes the tea leaves through the production line where it gets jumbled together and then put into packets before being sent off.

“The machinery is all from India”

Which we get second hand and means there is a good market for spare parts which is an important consideration.

“Depots around the country”

We send our tea across Tanzania to sales agents who then go out and sell to wholesalers around a region. The orders are generally consistent each month.

“Our indirect competitor is phones”

Income is a big determinant of sales. There’s a real opportunity cost when money is spent. Other factors are the weather and the price of sugar.

“We’re looking elsewhere in Africa”

The factors we’re considering are whether there are local producers of tea, and what are the current tea prices. DR Congo is looking promising though the key is getting a good distributor.

Social Media Follows etc.

Website: no need…

Facebook: Chai Tausi