Posts

GroFin helps GIA Bridals respond to COVID-19 crisis with new clothing line

COVID-19 has forced couples around the world to postpone or change their wedding plans. The virus has not only left many couples in tears – wedding vendors are just as heartbroken.

In Nigeria, the popularity of large and lavish weddings has created a million-dollar industry serviced by many small businesses. With Nigerians forced to put their wedding plans on hold due to COVID-19, many of these businesses – and the jobs they create – are now in jeopardy.

GIA Bridals, a GroFin client located in Port Harcourt, makes and rents bespoke wedding gowns to brides. The Aspire Small Business Fund (ASBF) invested in GIA Bridals in 2014 and 2017, providing the business with working capital and enabling the entrepreneur to lease and equip a larger space. Since ASBF’s investment, the business posted consistent increases in its sales and revenue.

But this year, GIA was forced to remain closed for three months during the COVID-19 lockdown in Nigeria and the business did not make any sales. Although GIA resumed operations in July, business is still slow. GIA’s owner, Ngozi Brisibe, says it would be devasting to her and her staff if her business was forced to close for good.

“We all depend on the business as our only source of livelihood.”

Ngozi Brisibe, Owner – GIA Bridals

GIA Bridals employs 11 people – 10 of whom are women. Chioma Patrick does the beadwork on GIA’s wedding gowns and has been working there for five years, supporting her mother. “This job has made it possible for me to earn my own money and I am not depending on or begging anyone to provide my basic needs. It makes me feel great and gives me confidence,” she says.

GroFin shared a customised Business Resilience Tool Kit – rolled out across the group to help clients respond to the pandemic – to help Ngozi analyse the impact on her business and especially its cashflow. “GroFin’s staff was consistently calling to find out how we were doing and providing advice on what can be done,” she says.

Ngozi’s biggest concern was whether she will be able to sustain the business until economic activity is fully restored.

“We suggested that she pivots her business away from only focusing on wedding dresses by using existing equipment for other products”

Charles Chikezie, GroFin Senior Industry Expert

Ngozi has responded by launching MyLadyUrban, a new line of women’s clothing. She says the new brand seeks to represent women as “both feminine and powerful” and will allow GIA to clothe its clients before, during, and after their weddings. “Although things seemed bad now, there’s hope for us with this new line of business,” Ngozi concludes.

https://www.instagram.com/p/CEHt95CJujn/?utm_source=ig_embed

Stop panicking, and start transforming instead

Applying the five lean manufacturing principles.

Measures to curb the spread of COVID-19 has not only directly impacted the ability of businesses to operate, but has infected them with something even more deadly: uncertainty.

Small and medium-sized businesses are the most vulnerable segment to uncertainty, and manufacturing has been one of the worst-affected industries. Although it can be difficult to stay positive during uncertain times, those business that hope to survive must look beyond the current crisis and focus on those things that do remain in their control. “SMEs should use this time to build more efficient and effective organisations. One way to do this is to apply the five lean manufacturing principles,” says Marten Stavast, Senior Industry Expert in Manufacturing at GroFin, an impact-driven SME financier. He reminds manufacturers of these principles:

1. Define value

Any entrepreneur will agree that the customer always comes first. Lean manufacturing takes this idea beyond customer relations to also put the customer first in the production process. The true value of any product or service is defined by what your customers are willing to pay for it. Your product may seem valuable to you because of the time and resources that went into creating, but its value is determined from the point of view of the customer.

Lean manufacturing begins by determining the needs of the customer. Interviews, surveys, demographic information, and web analytics are some of the tools you can use to determine what your customers want and at what price they can afford it.

2. Map your value stream

Once you know what your customers want and value, you can map your value stream. Use your customer’s value as a starting point and identify all the activities that help to create this value. The goal is to ensure that every activity in your production process adds value to your customer and can be delivered at the price point they want. If an activity does not add value to your customer, it is a waste. If you cut out any unnecessary processes that do not add value, you can reduce production cost while ensuring your customers still get what they want.

3. Create flow

Now that only necessary and value-adding activities remain in your value stream, you should ensure that each step flows smoothly to the next. Interruption and delays in production are no different to waste. A delay is more than just a bottleneck when one production step waits on another – it is any step that takes longer than it has to. You can improve the flow of value-adding activities by breaking down every step of the process and reconfiguring it as efficiently as possible, levelling out the workload, and training your employees to be multi-skilled and adaptive.

4. Establish pull

Stock sitting on your shelves or raw materials piled up in your warehouse is one of the biggest forms of waste in any production system and often places a big drag on cashflow for smaller businesses. This is even more true in the current environment.

A pull-based production system means that you only produce products based on the needs of your customers and only at the time and the quantities needed. Strive to limit your inventory and work in process items to only the materials needed for a smooth workflow. This approach requires ensuring some flexibility in your production process and the current environment, it might just give you the edge as a small business.

Stock sitting on your shelves or raw materials piled up in your warehouse is one of the biggest forms of waste in any production system, and often places a big drag on cashflow for smaller businesses.

5. Pursue perfection

The final step in implementing lean manufacturing is by far the most important. Lean thinking should not be a once-off exercise that you complete now, while times are tough. It should become part of the culture of your company in such a way that every employee strives toward perfection and constantly getting better at meeting customer needs and reducing waste. This will not only set your business apart during times when customers are themselves under financial pressure but also when things improve.

Mend your nets

When this pandemic and the uncertainty it brings have passed, those business owners who spent this time wisely will have built businesses that can remain competitive by increasing the value they deliver to customers. There is a saying that goes “when fishermen cannot go to sea, they mend their nets.” Now is the time for business owners to do this same by using their time to transform their businesses, not just to survive the current storm, but also to look to the future.

This article was first published in the August/September 2020 issue of Your Business Magazine.

GroFin supports SMEs through COVID-19 crisis

The COVID-19 pandemic is having a severe impact on economic activity and small businesses are bearing the brunt of this crisis in both developed and developing countries.

GroFin finances small businesses in some of the world’s most vulnerable economies. We are hard at work to increase the resilience of these communities as they deal with the fallout of the outbreak.

Our model has always centred on providing entrepreneurs with continuous support and advice. We realise that it is even more crucial than ever before during an unprecedented crisis like this. As such, we have taken several measures to continue assisting our clients despite the challenges presented by the virus and are responding as follows:

Ensuring we can continue servicing SMEs

The health and safety of GroFin’s staff and clients are our highest priority. We ensured a safe working environment for staff across our markets by implementing Environmental, Social, and Governance (ESG) measures to limit the possibility of infection. The majority of GroFin staff is working from home and we plan to extend this to all staff within the next week. All our core business platforms are available remotely so that we can continue operating and engaging with our clients using digital platforms.

Advising SMEs on measures against the spread of COVID-19

We have also focused on helping our clients to minimise contagion risk to their own employees and customers. GroFin’s Impact team developed a COVID-19 Environmental, Social, and Governance (ESG) framework, drawing on international best practise on this lifesaving issue. This ESG framework has been shared with our clients and the GroFin Investment team is providing them with support and advice to implement the measures it recommends.

Providing support to our clients

Unlike commercial lenders, we decided not to take a portfolio approach to assess the impact of the outbreak on our investees. In line with our focus on providing entrepreneurs with continuous support, we developed a toolkit to assess the disruption and impact on key business elements of each SME in our portfolio.

We believe this will allow GroFin to use our expertise to provide appropriate advice to each entrepreneur, while also giving us a view on the viability of each business during and after disruptions to their operations. The outcomes of this assessment will determine our actions to be taken per client. Where available, we will also link our investees to local relief options like government support.

As an organisation working with SMEs in some of the most challenging markets, we have always been amazed and inspired by the resilience, determination and ingenuity of the entrepreneurs who are our clients. They will need all these qualities to overcome this crisis but can rest assured that GroFin will be there to support them throughout it.

Brienne van der Walt

Chief Executive Officer, GroFin

Gold Box: A small business baking it big

I have always been entrepreneurially minded and when my spouse started developing an entrepreneurial spirit in 2014, I knew something good was in the offing for us.

Read more

Jordan SME grows while rebuilding lives of Syrian refugees

Arabella for Aluminium provides employment opportunities to refugees in one of Jordan’s poorest governates.

Former lawyer, Mohamed Darwish, is lucky to have a job on Arabella’s factory floor. Darwish is one of the estimated 1.5 million Syrian refugees presently living in Jordan. His family may have escaped the death and destruction of war when they fled from Aleppo in Syria, but building a new life is not easy.

With close to a third of Jordan’s private sector labour force employed by SMEs, the sector has a crucial role to play in addressing the refugee crisis. And with Arabella located just a few kilometres away from the Zaatari Refugee Camp in the Governate or Irbid, this SME offers a rare employment opportunity at a decent wage to both Syrians and local workers.

Under the Nomou Programme, Arabella is a GroFin Jordan SME client that specialises in aluminum extrusion, fabrication, decoration, and surface treatment & coating. In 2015, GroFin provided the company with financing to purchase equipment and complete infrastructure work at its new production site. But only a few months after it started operations, an unexpected halt in production could easily have seen the business fail.

When cracks appeared in three of the company’s extrusion press containers – which are crucial to its production process – it had no choice but to halt operations. Two of the containers were shipped to Thailand for repairs and while the third was repaired locally, the process still took several months.

Arabella was soon unable to meet its obligations to GroFin and would have defaulted under a traditional financing framework – likely forfeiting its assets and going under. However, GroFin’s model provides room to adapt its financing to the needs of the client and was able to devise an alternative payment plan to allow Arabella to overcome this difficult period.

“Not all business support is about increasing sales and revenue. It is also about helping the client to survive and overcome tough times.”

Wael Sunna, Investment Manager at GroFin Jordan, says small and medium-sized businesses are extremely vulnerable to shocks and the ability to overcome such unexpected setbacks is key to their survival. “Not all business support is about increasing sales and revenue. It is also about helping the client to survive and overcome tough times,” Sunna explains.

GroFin has also provided Arabella with further advice to improve its cash flow through negotiating better payment terms with suppliers and improving collections from clients through shorter payment terms. In 2017, GroFin provided the company with additional funding needed to boost its stock of aluminum pellets to meet higher demand for its products.

With GroFin’s support, Arabella has been able to continuously increase its production and sales. At the end of 2018, the company employed 84 workers, compared to 49 a year before, 20% of whom are Syrians. Arabella continues to grow and is expanding its production facilities even further through the addition of a new furnace for processing scrap aluminum.

“GroFin became our partner when banks refused our loan applications. In the beginning we were short of experience, but we found all the support we needed in GroFin.”

Mr. Sobhi Al Zubi, the entrepreneur behind Arabella, says he will never forget GroFin’s support and loyalty to his business. “GroFin became our partner when banks refused our loan applications. In the beginning we were short of experience, but we found all the support we needed in GroFin. They were there to help us with everything from planning to marketing and sales,” he says.

Sobhi says perseverance and determination were crucial to his success.

“I am always positive, despite the setbacks. I always keep looking forward – never back. You have to feel successful on the inside, then even people who start from nothing can become successful.”

Learn more about the The Nomou Programme and GroFin funding and business support for entrepreneurs and SMEs in the Middle East.

Nigerian entrepreneur paints it forward


Successful paint dealer now trains women to start their own businesses

My vision for the company is to become the leading coating company in the country and to create jobs for thousands of Nigerians.

Read more

GroFin Nigeria supports women entrepreneurs to ‘step up and scale up’

GroFin Nigeria (Lagos) recently hosted nearly 90 women entrepreneurs at a capacity building workshop in Lagos. The event formed part of GroWoman, GroFin’s Gender Lens Investing Initiative, and focused on equipping women entrepreneurs in business planning and strategy. Women empowerment is one of GroFin’s core impact objectives.

GroFin hosted the event in partnership with Sheba Centre, a GroFin client and events management company. Omolara Adelusi, the owner of Sheba Centre, shared her entrepreneurial journey and encouraged other women entrepreneurs “to step up and scale up” their businesses.

Women entrepreneurs from various sectors including agro-processing, education, healthcare, retail, and manufacturing attended the event and were inspired by its theme of ‘Breaking the Myth’ around gender roles which assume that women cannot – or should not – venture into the business world.

Bisi Onim, executive director and COO at FundQuest Financial Services, and Tope Orolu, managing director at TIS Capital & Advisory, spoke on the role of a business plan in a thriving business. The speakers encouraged entrepreneurs to develop their business plans holistically.

The learning sessions included practical guides to business planning which some of the participants even described as an “abridged MBA”. Attendees also testified to have garnered more knowledge on sustaining their business, building a proper structure as well as implementing the right strategies for business growth.

“The facilitators made the business plan very easy to digest. I am going to run my business as a system and leverage on resources outside of my immediate environment. I will further develop my business plan and would love to have more information on subsequent events of this nature.” said one attendee.

GroFin’s mission is aligned with the United Nation’s Sustainable Development Goal 5 (Achieve gender equality and empower all women and girls) through its focus on women–led businesses and women employment. GroFin has supported over 122 women-owned businesses and 30% of the jobs our investments sustain are held by women.

GroFin is partnering with the International Trade Centre (ITC) in SheTrades Invest, an initiative to increase investment in women-owned businesses in the countries where we operate. The SheTrades initiative aims to connect three million women to market by 2021. In addition, GroFin works with the Vital Voices Programme to help women entrepreneurs lead positive change in their communities. GroFin sponsored 12 clients for the VV GROW Fellowship, a highly competitive one-year accelerator program for women who own small or medium-sized businesses.

If you are a woman entrepreneur looking to grow your business, learn more about GroFin’s financing and business support. Or speak directly with a GroFin representative at one our local offices for more information.

GroFin receives high accolade at Nigerian Healthcare Excellence Awards

GroFin Nigeria won the Outstanding Healthcare Project-Friendly Financial Institution of the Year Award at the Nigerian Healthcare Excellence Awards (NHEA) 2019.

The award recognises banks and financial institutions that have created an inclusive innovative financing model for healthcare entrepreneurs or healthcare SMEs across the value chain. NHEA is an initiative of Global Health Project and Resources in Partnership with Anadach group and celebrates organisations who have contributed immensely to the growth of the Nigerian healthcare sector.

Felix Ezeh, Investment Executive at GroFin Nigeria, felt honoured that GroFin was recognised for this prestigious award:

“By this award, the public that voted for GroFin made a statement that they are appreciative of the work we are doing.  We heard them.  Our promise to them is that this award will only spur us to do more.”

NHEA’s recognition aims to stimulate quality improvement and innovation in the Nigerian health sector leading to improved service delivery & management of key health issues and the capacity of individuals to influence and set new performance standards in Nigeria & beyond.

GroFin’s unique model of combining finance and business support helps healthcare entrepreneurs and SMEs overcome challenges and improves their ability to manage the complexity of a growing business. GroFin has dedicated healthcare investment and business support expertise, both through its in-house healthcare “industry experts” and through formal partnerships with specialist healthcare partners like Medical Credit Fund (MCF).

GroFin’s healthcare portfolio in Africa and the Middle East consists of investments made in 41 SMEs, representing a total investment of US$ 16M, across the value chain of businesses in the healthcare industry including hospitals, clinics, dental facilities, maternal care and pharmaceutical outlets. Business support offered by GroFin includes a business planning framework, quality management systems, cash flow advice, medical waste management systems as well as operations and management expertise. And through its investments, GroFin has over 277,280 patients able to obtain medical care services annually and has helped sustain a total of 3,950 healthcare related jobs.

The NHEA 2019 brought further good news as a GroFin Nigeria exited client Healthplus Limited won Retailer of the Year Award, further helping to cement GroFin’s impact in the health sector of Nigeria.

About GroFin

GroFin is a pioneering private development financial institution specialising in financing and supporting small and growing businesses (SGBs) across Africa and the Middle East. We combine medium term loan capital and specialised business support to grow SGBs in emerging markets. By successfully combining medium term loans and specialised business support delivered through our local offices, we have invested in over 700 SMEs and sustained over 88,150 jobs across a wide spectrum of business activities within the 15 countries in Africa and Middle East that we operate in. GroFin has its headquarters located in Mauritius.

Media enquiries: Felix Ezeh, felix@grofin.com

GroFin and Shell Foundation: Harnessing technology for SME finance

From mobile money to blockchain and data analytics, fintech is not only disrupting the way corporate financial institutions operate, it also presents far-reaching opportunities for social enterprises and development finance institutions to strengthen their impact and efficiency.

Shell Foundation (SF) supports innovators to test new technology and enterprise models to help overcome two major global development challenges: access to energy and access to affordable transport. Its portfolio includes both social enterprises as well as market enablers – like GroFin – that accelerate the growth of proven sectors.

SF, a UK registered charity, has supported GroFin since its inception in 2004, when the two organisations came together to develop a unique model that combines finance and support to grow SMEs and drive inclusive economic growth. In line with SF’s focus to support businesses and intermediaries capable of delivering social change at scale, it also assisted GroFin in two projects aimed to enable the company to better leverage technology and increase the efficiency of its growing operations.

Mairi Tejani, Head of SME Growth at Shell Foundation, says financial technology innovations create a unique opportunity to redefine the SME lending ecosystem.

“We remain committed to supporting initiatives that increase the efficiency of the SME finance sector in emerging markets, and are pleased to partner with GroFin to test the use cases for financial technology innovations in SME funds.”

Increased efficiency

GroFin provides financing and business support to SMEs in 14 countries throughout Africa and the Middle East and has invested in over 700 businesses. The ability to provide effective business support to its clients is integral to GroFin’s business model. This requires the company to accurately capture and analyse financial and other data gathered from these SME businesses, or created through its transactions with them.

Until recently, GroFin relied on various internal systems and manually extracted the data it needs for analysis and reporting – a process which was both time-consuming and error prone. With Shell Foundation’s support, GroFin enlisted Altron Karabina, a specialist in helping companies digitally transform using the Microsoft platform, to develop a data warehouse and business analytics platform.

The data warehouse allowed GroFin and Karabina to develop automated reporting templates, eliminating the need to manual collate and update data for reporting purposes and greatly improved efficiency. For example, the project has allowed GroFin to slash the time spent on collating certain data for creating quarterly reports for investors from about two weeks to mere minutes.

GroFin is now using its own internal resources to extend the infrastructure and functionality created during the project to create a wider range of automated reports. Since the completion of the project, GroFin has already published more than 60 automated reports. The automation of reporting processes is freeing up time and resources within GroFin’s investment team, allowing them to spend less time on verifying figures and conduct the analysis needed to manage their portfolios and support their clients better.

A digital solution to capturing data

The need to maintain an efficient system of collecting data that is complete, accurate and auditable also led SF to provide GroFin with support to test and pilot a blockchain platform from BanQu, a US based, blockchain solutions provider. GroFin tested the use of a digital platform using distributed ledger technology (DLT) as a more effective and convenient means for its clients to submit the data required from them.

Philippa Massyn, IST Executive at GroFin, says the pilot project showed the great potential for development finance institutions and others engaged in impact investing to use digital platforms to collect data in the field.

“The project showed that a digital platform can not only make it easier for SMEs to submit their data, it can also be used to generate key insights through analytics.  We believe that if SMEs see this immediate benefit to submitting their data, they will be incentivised to submit again and on time.”

Serving SMEs better

Ashraf Esmael, Chief Development Officer at GroFin, says exploring new ways to capture and analyse data from SMEs, can make an important contribution to the development of the sector.

“Small businesses are vulnerable to shocks and therefore need to identify changing trends early on. The ability to capture and analyse data quicker and more effectively will help GroFin to provide better and more timely support to SMEs, and to do this more efficiently.”

Ryan Jamieson, CTO at Altron Karabina, says the company is excited to work with organisations like GroFin which have both an economic and societal impact.

“Altron Karabina helps companies to understand, manage and make decisions based on their data. In GroFin’s case this not only improved their own businesses processes. It will also help them to empower the SMEs they serve.”

Facing Jordan’s SME challenges & growing in frozen food market

Small and medium-sized businesses employ around a third of Jordan’s private-sector labour force. Yet, World Bank Enterprise Survey data shows that nearly 49% of small and 33% of medium-sized businesses in the country still cite access to finance as a major constraint to their growth.

GroFin allowed Al-Mutamayeza for Frozen Food Trading, which trades under the name Saboba, to overcome this challenge by providing the business with three successive rounds of financing. The company distributes high-quality frozen and processed meat and poultry products. Thanks to GroFin’s investments and continued business support it was able to expand into new geographical regions in Jordan, venture into new market segments and broadened its product range.

Raed and Mohammad Saboba founded the company bearing their name in 2007 in Zarqa, Jordan. They first approached GroFin in 2013 to finance the purchase of additional inventory to expand the distribution network of the business. GroFin also supported Saboba in the formalisation of its business plan and financial projections, equipping the entrepreneurs to monitor progress against the forecasted plan to better identify areas of improvement.

As Saboba grew, GroFin continued to work closely with the business to optimise its product range and pricing, as well as its brand positioning and marketing reach. In 2015, GroFin encouraged Saboba to explore new markets and provided the business with financing to introduce new products targeting hotels, restaurants and catering companies. In response to GroFin’s advice to diversify its product range, Soboba later obtained additional financing to acquire the right to distribute a global brand of powdered milk and other dairy products in Jordan.

Due to the success and improved profitability the company has achieved since partnering with GroFin, Saboba has acquired new premises and its brand is now well-known in Jordan.

“GroFin’s financial and business support resulted in extending our geographical coverage, increasing our number of products from 12 to 25, hiring new employees, and growing sales by over 15% annually,” says Raed Saboba, co-owner of the business.

Saboba currently employs 35 workers, compared to 21 at the time of GroFin’s first investment. However, the company’s growth has not only allowed it to create new job opportunities, but also to enhance the life and careers of its employees. Wafaa Tom is a female employee who joined Saboda in 2016 and heads up the company’s finance department.

“The growth in the company’s operations impacted my knowledge and enriched my career as I am currently dealing with bigger transactions related to a number of reputable customers.”

Alaa Al Faqeer, another female employee at Saboba, says she struggled to find a job with a decent salary as she did not have any tertiary education. All of this changed when a friend encouraged her to apply for a job at Saboba.

“Saboba paid for my tuition to enrol at university and I received a degree in Accounting, which helped me to further develop my career. When I got engaged, Saboba also generously participated in my wedding expenses, as my husband and I could not fulfil all of them,” she says.

GroFin Jordan - SabobaGroFin Jordan - SabobaGroFin Jordan - Saboba

At a mere 14.4%, the World Bank points out that Jordan’s female labour force participation rate is the lowest in the world for a country not at war. This is despite the fact that women comprise more than half of Jordanian university graduates. Gender discrimination in hiring practices contributes to this number, as well as to the country’s high female unemployment rate of nearly 24%. With GroFin’s support, Saboba has empowered Tom and Al Faqeer to overcome these barriers.