Supporting diaspora entrepreneurs – Zidicircle
Before the Kenyan entrepreneur Fridah Ntarangwi embarked on the journey of helping diaspora professionals to scale their start-ups, she had over 10 years of working experience in the financial sector. Yet, despite her academic qualifications and professional experience, when she decided to set up a platform to help SMEs in Africa to raise financial capital internationally, she ran into a proverbial wall. “It was really difficult to navigate this entrepreneurial ecosystem and to know how things work. I had to start from scratch and did not know any other African entrepreneurs to reach out to or ask to mentor me.” Based on an interview with Fridah Ntarangwi, this article tells the story of her journey and the resulting Entrepreneurship and Financing Platform Zidicircle.
From mentorship to partnership
Fridah Ntarangwi migrated to the Netherlands in 2014, where she first completed her Master’s of science in Finance before starting her own business. This proved a challenging endeavour as the support structures for a starting migrant entrepreneur like herself were not there – something Fridahhad not expected in The Netherlands, as it is ranked as one of the best countries for doing business in the world. Eventually, her participation in the start-up visa programme made all the difference for Fridah. Within this programme, she was encouraged to find a facilitator in The Netherlands, which led her to visit the website of the RVO, The Netherlands Enterprise Agency. “Luckily, [on this website] I pressed the right button and met Toon Buddingh’”, Fridah shares. “He was very welcoming and not only became my facilitator but also my mentor and in recent times a business partner. He opened up his network to me, looked out for me and became my guide.”
Learning from her own challenges and the mentorship that Mr. Buddingh’ provided her to overcome them, Fridah came to an important realisation: she was trying to help entrepreneurs operating in the African markets, while there are still thousands of African migrants in The Netherlands (and Europe) who are not succeeding in exploiting their full entrepreneurial potential. Fridah realised that these (potential) diaspora entrepreneurs are facing a variety of barriers – not knowing where to find relevant resources for setting up a successful business; being limited by language barriers, and lacking the much-needed mentorship and coaching Fridah herself found in Buddingh’. Further, she discovered, the existing ecosystem of incubators consists of a rather homogeneous group of people who do not look like her and other African diaspora entrepreneurs. As Fridah points out, this lack of diversity in the group of people who are there to offer support is not stimulating for diaspora entrepreneurs – they feel misunderstood and not represented. “At that point,” Fridah recounts, “I went to my mentor and told him: ‘despite all my qualifications, I still find it difficult to navigate this system’. What about those people who are facing even greater obstacles, like limited education and lack of network?” This realisation that members of the diaspora who have the ambition to set up a business need additional support, led to the conception of Zidicirle. Toon Buddingh’, her mentor, now became Fridah’s business partner and is now programme director of the platform.
Bootcamps for business
With Zidicircle, Fridah seeks to support diaspora entrepreneurs by providing them with the resources necessary to successfully launch their business either in their countries of residence, country of origin, or internationally. Through its Diaspora Entrepreneur Bootcamp (DEB Programme) – the first edition of which was realised in partnership with IOM’s ED4D programme – Zidicirlce provides, among others,
- training for diaspora entrepreneurs on all aspects of business, including business models, product development, pricing, customer acquisition, managing teams, financial administration, revenue projection and investor readiness;
- coaching by individual mentors who are connected to diaspora entrepreneurs; and
- monthly group coaching to keep diaspora entrepreneurs involved and covering various relevant subjects for their entrepreneurial journey, including financial administration and building remote teams (as a response to the corona crisis).
In addition to this training programme, Zidicircle looks for ways through which diaspora entrepreneurs can find investment for their business ideas and start-ups. The organization fast tracks funding opportunities by organizing pitching competitions and giving various funders the possibility to become either funding partners or investors of the diaspora entrepreneurs. The organisation is currently fundraising for its Zidi Diaspora Fund, with the aim to invest in diaspora entrepreneurs after they complete their training programme. “We want to fund diaspora businesses, or diaspora entrepreneurs, who have participated in our programme as there is a huge funding gap in this segment. Zidicircle also offers support to diaspora entrepreneurs launching in Africa by matching them with local SMEs in African countries,” Fridah explains. “When diaspora entrepreneurs set up businesses in their countries of origin, they sometimes miss a ‘soft landing’ and have a hard time navigating the local ecosystems. This poses serious challenges for their business, despite the fact that they have brilliant ideas and make use of new technologies. That is why we support building teams, mentorship and establishing partnerships with local SMEs, ultimately contributing to the social-economic development of all involved. This way, we can fund them together and help the entrepreneurs realise their ideas.”
Stories of success
Since its establishment Zidicircle has supported many diaspora entrepreneurs and Ntarangwi is proud to share some success stories. Ghanaian David Boeateng (from IOM’s ED4D program), for example, is running a successful business in solar energy: Solarboxxx. During one of Zidicircle’s pitch events, Boeateng was approached by a fellow-entrepreneur. Together, the partners approached a big institutional investor in the Netherlands and a commercial Bank in Ghana to provide funding for their business. Now, Solarboxxx is successfully providing solar energy to consumers across West Africa.
Another good example is Van de Dutchies farms, also in Ghana. After participating in the Zidicircle programme, Richard Dickens Agbenyo was able to launch his agribusiness. VdDutchies Farms is one of the very few mechanized farming corporations in Ghana that also trains farmers on technological templates that improves yield/harvest and quality of produce. What makes this enterprise particularly unique is the fact that Richard and his team have also been able to mobilize and train the youth and women into new farming technologies.
A final example is Bendera, an e-commerce platform for African products in Europe that Kenyan entrepreneur and former Zidicircle participant Olivia Decker will be launching in March 2021.
Surprises on the way
Although from her own experience, Fridah was already familiar with the kind of challenges and barriers diaspora entrepreneurs face in their attempt to conduct their business, she still encountered two surprises on her Zidicircle journey. First, she found that there is a persistent misconception about the diaspora’s financial capacity. “African governments, multinational institutions and the general population all assume that there is a lot of money within the diaspora community that is waiting to be invested in their countries of origin. But in reality, diaspora entrepreneurs struggle like everybody else and do not have extra money. That is why it is important to ensure they get the necessary skills to set up successful businesses. And once they have their business up and running, these diaspora entrepreneurs will be able to set aside some money and make small investments in others who are hoping to follow their lead.”
The second surprise that Fridah encountered is how much need there is, also internationally, for the kind of programme that Zidicircle provides. “I have people writing to me from the USA and Japan, telling me that there has never been a diaspora programme like this before and how excited they are about our initiative. I know, of course, how important our services are but hearing it from entrepreneurs themselves underlines how helpful it is. I am convinced every day that we are on the right path,” Fridah says proudly. This appetite for diaspora entrepreneurship programmes is further illustrated by the fact that Zidicircle will be conducting its Diaspora Entrepreneurship Bootcamp (DEB) not once but twice a year. Moreover, the event will even go international this year as, due to Covid-19, it will take place online (See Box ‘Covid-19 as a positive accelerator‘).
Covid-19 as a positive accelerator
In the previous two years, Zidicircle organized its diaspora entrepreneurship programme (Diaspora Entrepreneur Bootcamp – DEB) once a year. Due to high demand, the DEB programme will be organized twice 2021 – in March and September. Initially, this training programme was targeting diaspora entrepreneurs in the Netherlands. The corona crisis, however, created a surprising opportunity: the bootcamp could be opened up to an international audience as it was moved to the digital realm. Because physical meetings were impossible in 2020 as a result of measures to fight the pandemic, the entire bootcamp was conducted virtually. This enabled diaspora entrepreneurs from other European countries to participate and it proved a great success. The first bootcamp in 2021 will also be virtual and Zidicircle is already seeing diaspora entrepreneurs from countries such as the United States and Japan registering for the programme. Even participants from various African countries have also signed up. “We have gone global”, Ntarangwi confirms. “This means we are now the only global diaspora entrepreneurship programme – There is no other global diaspora initiative of this caliber. We are very proud of this achievement,” Ntarangwi continues. “And although Covid-19 initially affected us negatively, eventually it has brought a new business opportunity and enabled us to grow and create new partnerships.”
An inclusive ecosystem
In order to make the programmes accessible for a broad range of diaspora entrepreneurs, Zidicircle offers affordable, high level training programmes. This is enabled by the fact that Zidicircle works with partners to deliver the programme. The 2019 programme was sponsored by The International Organisation for Migration (OIM The Netherlands). In addition to finding partners, Fridah also works with a like-minded team of trainers. “Our trainers are top of the range, with experience from highly estimated institutions and are entrepreneurs themselves. And they also work with us because we share the same motivation,” Fridah shares. “Our programme is of a subsidised nature because I believe, together with my team, that this is needed to create an inclusive entrepreneurial ecosystem. In such an ecosystem everyone, no matter your background – whether you are a member of the diaspora, migrant or refugee – should be able to get the tools needed to run a successful business.”
This drive to create an inclusive entrepreneurship ecosystem is related to another one of Fridah’s main ambitions: fostering the accumulation of generational wealth in Africa. For her, supporting entrepreneurship is one of the ways to get there. “African governments keep borrowing because they do not have generational wealth that can be duplicated, multiplied or employed to create businesses and foster sustainable development.” Remittances of members of the diaspora to their families in Africa are not offering a real solution. Fridah believes that setting up businesses and making sound investments is the way forward for sustainable growth and the accumulation of generational wealth. If members of the African diaspora can access affordable training and funding programmes, this is a first important step towards becoming entrepreneurs and, thereafter, investors in their countries of origin. To that end, Zidicircle also organises workshops on investment, during which diaspora entrepreneurs learn that they too can become investors. Fridah notes that there continues to be a very one-dimensional image of the investor – one that is not relatable to many members of the African diaspora. In reality, Fridah notes, everyone can become an investor – it is not defined by how you look or how full your bank account is. “Even with 50 Euros, one can already become an investor.”
Among the challenges that Zidicircle faces is the fact that there are limited mini-subsidies available to support the kind of entrepreneurship programmes that it provides. With a few exceptions such as IOM The Netherlands, relevant organisations and institutions are not too eager to invest in diaspora entrepreneurship. For Fridah, that is one of the biggest disappointments so far. “At times this means that only those diaspora entrepreneurs who are able to afford the programmes can join,” she explains. As Fridah wants to ensure Zidicirle programmes are accessible to everyone, the organisation does provide some full scholarships. “But because of operational costs I cannot make the programme free for everybody,” Fridah notes. As a consequence, despite the high demand and the willingness of Zidicircle, the organisation still has to disappoint some potential participants. For example, the spring 2021 programme has received over 300 applications, but barely a handful can afford it. “However, I am happy to report we are talking with partners,” Fridah comments hopefully. “I hope the private sector or donors will understand that sponsoring such bootcamps is a small investment for a potentially large impact.”
In addition to the lack of financial support for Zidicircle, Fridah has also noticed that African migrants and entrepreneurs are often ignored by investors. “There is a lot of talk about diversity and inclusion, but there is still no level playing ground. If you are a person of colour or you have a migrant background, you will still be treated differently. I would like to see the entrepreneurship and investment ecosystem become more inclusive,” Fridah argues. According to her, this inclusiveness should start with an attitude shift. At this point, Fridah observes a persistent assumption that if people do not look a certain way, they come with a higher risk for investors. “I believe that they [investors] should look at the product that you [diaspora entrepreneurs] are building and the service you are providing, before looking at how you look and where you come from. Investors need to change their perceptions and understand that what you look like or where you come from does not determine your capabilities and should not determine your future,” she concludes.
Based on both her successes and challenges, Fridah hopes that the Dutch government as well as other relevant stakeholders will up their game where it comes to investments in programmes that support diaspora entrepreneurs. It is a pity that successful diaspora programmes such as ED4D by IOM The Netherlands do not get a second edition, Fridah notes. It is often argued that initiatives by diaspora entrepreneurs do not warrant extra financial support as they do not create sufficient added value. This conclusion, based on various example cases, is, according to Fridah wrong, because the comparison between ‘regular’ and diaspora entrepreneurs is not a fair one. “If there is no level playing field to begin with, it makes sense that you end up with different results. Diaspora, migrants and refugees do not have the same starting position as local and native citizens in Europe […]. With a limited network and support system, you cannot expect these diaspora entrepreneurs to generate the same results without creating the right incentives for them. This means that in the spirit of inclusion and diversity, it is high time to support programmes that focus on minorities and other specific target groups that have so far been left out. Diaspora entrepreneurs should be one of those target groups. At the moment, most of the existing vouchers, coaching programmes and policy frameworks are not accessible to or do not focus on these diaspora entrepreneurs. This is a missed opportunity.”
The way ahead
Fridah is optimistic about the future and sees many opportunities for diaspora entrepreneurs to build their businesses, support others and contribute to the development of their countries – the country of origin and the country of residence. As a closing remark, she calls upon the private sector to expand its horizon and partner with diaspora entrepreneurs. This, she is convinced, will eventually lead to a win-win situation. “The government alone cannot do everything. The private sector can play an important role in supporting diaspora entrepreneurs and start-ups. There is much untapped potential within the diaspora community, and by opening up, the Dutch private sector can develop sustainable collaborations. If the private sector provides diaspora entrepreneurs with the opportunity to work together, they can contribute to the creation of generational wealth in their own countries or in countries where it is much needed and at the same time benefit from a wealth of talent and ideas at the same time.”