U.S. startup finds new way to finance African businesses
October 5, 2018
Ovamba co-founders Marvin Cole (left) and Viola Llewellyn are helping small businesses in West Africa access capital. (© Ovamba)
Emmanuel Neossi is so good at his job, exporting cocoa and coffee beans from Cameroon, that some call him “Monsieur Cocoa.”
Neossi founded Producam SA in 2012 with just a couple of warehouses in Cameroon’s western region. By 2017, his business was growing so rapidly he could not keep up with demand. He approached Ovamba, a U.S. financing company that helps small businesses like Neossi’s grow, but in a different way than traditional banks.
Ovamba connected Neossi with three foreign investors ready to finance 10,000 tons of cocoa for export. Within a year, Neossi closed on $500 million with an American private equity firm to begin cocoa processing in-region.
“Banking falls short,” said Viola Llewellyn, Ovamba’s co-founder and president, of the difficulty entrepreneurs in African nations face in finding financing. “The ‘missing middle’ of Africa’s growing middle class can’t get business services.”
That “missing middle” is a rising portion of populations across the continent that earn too much to qualify for government services or assistance from nonprofits, but not enough to invest in their own advancement, whether by paying university tuition or by funding a new business venture.
John Sedunov, a professor of finance at Villanova University, says many banks in Africa are hesitant to take the chance on small and medium-sized enterprises like Producam because they do not have the traditional data sources to assess an investment’s risk that larger businesses do.
Ovamba has custom-built dozens of software programs for the company’s clients in Cameroon and Côte d’Ivoire. These programs collect data on clients’ businesses and transactions to build a robust risk assessment for investors, as an alternative to traditional documents that banks use.
Llewellyn and her business partner, Marvin Cole, started Ovamba in 2013. Both had years of experience working on finance in sub-Saharan Africa, but they were frustrated by the foreign perception of investment in the region as small and charitable. They wanted a way to “make capital available to African businesses that is authentic [and] meets their cultural needs.”
Llewellyn’s message to small and medium-sized businesses is: “We can help you grow. We’re going to let you know when you should buy more at a rate you want, so the money in your bank account stays there.”
“We want to reach those people who are almost ignored by the corporations,” says Ovamba’s chief technology officer, Prashant Mahajan.
*Source ShareAmerica
Nkemnji Global Tech
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