The Democratic Republic of Congo (DRC) has been the backdrop for numerous civil wars and a major five-year long conflict, dubbed as the “Great War of Africa”. Recent statistics show that the Human Development Index ranking of DRC is one of the lowest in the world (186 out of 187 countries measured).This rating is dismal compared to the amount of natural and mineral resources the country has. DRC’s second highest ranking in the “Failed States” index is another disappointing statistic. Even with the help of international NGOs and development agencies, it will be many years before there is some semblance of development, accountability and good governance in DRC. In the meantime, the average Congolese takes the brunt of the failed state that is DRC.
The “Doing Business Project”, (an initiative of International Financial Corporation (IFC) and World Bank) measures business regulations and enforcements applied to local small and medium sized companies around the world. Variables such as dealing with construction permits, getting electricity, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency are measured 3. Once again, DRC ranked a low 181 (out of 185) in 2013, indicating an economy that is not very conducive to operating businesses 3. Despite all this, there are various financial institutions (e.g. FINCA, HOPE DRC, Kiva) in DRC that support micro, small and medium-sized enterprises in the region, and many Congolese overcome the political and socio economic barriers by making a living through these private enterprises.
In terms of a challenging business environment, accessing capital is a major roadblock for entrepreneurs in DRC . While entrepreneurs claim that the financial institutions lack transparency in the screening process and have rigid rules when it comes to providing loans, the financiers refute by saying that most entrepreneurs lack financial knowledge and management capacity 5.
In order to address this dissonance between the entrepreneurs and financial institutions , the German Development Bank (KfW Bankengruppe) has held two annual forums in DRC to bring together the do-ers and the givers (banks, credit unions, microfinance institutions etc) to discuss matters related to capital financing. It is through forums like these that both sides can communicate and develop a better understanding of the entrepreneurial landscape. Specific outcomes from the forum can be obtained through a published report available on the forum’s website (http://www.forum-aaf.org/) or here.
Having described the existence of eager entrepreneurs and the availability of resources to support them (albeit limited), the bigger question that needs to be answered is, what are these entrepreneurs trying to achieve in the long run?
Although these small enterprises contribute to the local economy by providing employment opportunities, sustenance is the primary focus for most entrepreneurs in DRC. For many, their business is viewed as a means to provide basic food, shelter and education for their families and nothing more than that. In fact, many entrepreneurs struggle with supporting their families with just one business, and run many businesses in parallel for increasing profits and/or reducing risk 5.
One of the main category of business in DRC is commerce5. There are many players in this sector to begin with, and more problems arise when the product-life cycles of consumer goods are shortened with the entry of similar companies selling the same products 5. Thus, operating a business becomes challenging when companies do not have a competitive edge to differentiate their products or services. Lastly, while there is nothing wrong in using business only as a means to earn a livelihood, one does not reach their fullest potential by just surviving.
Surely, the prospects look bleak. But, is there hope? The answer is a resounding yes.
There is hope when entrepreneurs think beyond their typical organizational goals and mission and establish social enterprises. Social enterprises are businesses operated with the dual purpose of generating income by selling a product or service in the marketplace and creating a social, environmental or cultural value. It may appear as being too idealistic to propose the development of social enterprises in a country plagued by war, poverty and corruption. However, only businesses with a social value can step into the role of the state, provide services to the public, and also be profitable. There probably isn’t a market with a greater demand for social goods than the DRC. Therefore, the entrepreneurs and people of DRC would greatly benefit from embracing the blended value proposition of social enterprises.
In a country with poor business infrastructure, establishing a social enterprise can be all the more challenging than starting a for-profit business. However, if: a) the customer demand is strong, b) risk is relatively low and c) financing is accessible, then the social enterprise is sure to succeed. Indeed, there are such social enterprises and entrepreneurs operating in DRC today.
Healthy Entrepreneurs is a Dutch-based initiative that provides affordable, reliable generic medicines for low and middle-income communities through a network of trained entrepreneurs. Access to essential medications is a pressing issue in DRC, with a large number of people displaced due to the wars. There is little or no access to medications in rural areas, and in many cases (including urban areas) the medications are substandard.
In the Healthy Entrepreneurs pilot social enterprise in Bukavu (DRC), local entrepreneurs are trained to sell drugs, and are provided with microloans to fund their own mobile pharmacy, called “Pharmacie en Boîte” (provided by Healthy Entrepreneurs and their partners) 9. The entrepreneurs not only benefit from the training and financing provided, but they also have a reliable supply of medications, which the community benefits from having access to. Part of the success of the Healthy Entrepreneurs initiative can be attributed to the support from international partners. Nonetheless, this social enterprise represents a sustainable business model where Congolese entrepreneurs can earn their livelihood, while addressing the communities’ immediate needs.
Other examples of promising entrepreneurial initiatives that speak to the Congolese people are the YES DRC Network and Synergie Simama. YES DRC is a social enterprise led by the youth, for the youth 10. Their programs and services include business skills training, livestock breeding projects, scholarships to attend international conferences and forums, and hosting a variety of entrepreneurship-related events 10. Synergie Simama is the vision of one determined Congolese, Kalongo Rwabikanga, whose organization provides vocational training, physiotherapy, surgeries and education to disabled people 11. The vocational training includes farming and sewing activities, through which people can make a living and also fund some of the services provided by Synergie Simama 11. All the social enterprises discussed here have the following in common: they are innovative, sustainable and profitable. For business-owners in DRC who struggle to differentiate the product offerings, a social enterprise could be an added value that sets them apart from their competitors. Thus, the opportunities with social enterprises are endless in a developing market such as DRC.
In conclusion, regardless of a failed state, the Congolese people have shown their resilience by engaging in entrepreneurial activities. In addition to providing microloans and financing to local entrepreneurs, development agencies should consider providing training and resources to encourage the growth of social enterprises. Partnerships with international companies will certainly boost the development of such enterprises, and provide Congolese business owners with the much-needed organizational support. Moving forward, perhaps it is time for the international community to re-evaluate their strategy for rebuilding DRC. While social enterprises are not the solution to all the problems, it will at least be a step towards changing the perception of the Democratic Republic of Congo, from an epitome of political instability to a country that is led by its people.