Enablis promotes local business creation by focusing its attention on the entrepreneurs rather than merely on their businesses. This NGO identifies the founders of the most promising SMEs and supports them as they grow their enterprise. As members they enjoy all the advantages connected with an international network based on sharing experience. As well as providing training and mentorship programmes, Enablis supports entrepreneurs as they seek financing for their businesses.

For local entrepreneurship to thrive both in Africa and in other developing regions it is vital to promote a wider environment that supports the private sector and especially to put mechanisms in place to support emerging businesses. Yet as well as providing support to the organisations concerned, it is also vital to support the entrepreneurs – viewed as individuals – through all the various stages in the life of their companies. These entrepreneurs should be offered opportunities for training, should ideally be enabled to join a network based on peer-to-peer experience sharing, and should be assisted, where necessary, to access the finance they need to grow their SMEs. All of these forms of support can prove crucial to their success.

The Enablis entrepreneurial network is one of the very few organisations to be interested above all in individuals, in the entrepreneurs rather than merely in their businesses. Created in 2003 to combat poverty by supporting local business creation, Enablis opened its first office in Cape Town, South Africa, in 2004. Ten years on, the NGO now has eleven local branch offices across the continent: in South Africa and now also in Kenya, Rwanda and Tanzania, as well as in Ghana in West Africa and Argentina. At 1st January 2014 the network had a total of 2,476 members – more than a third of them (34%) women.

Identifying talents, organising a network

Enablis is a non-profit organisation that seeks to stimulate economic growth by giving selected entrepreneurs the support they need to create and grow their businesses. By becoming members of the network they can access all its resources – especially those which promote the sharing of experience, peer-to-peer assistance and the generation of collective intelligence. The expertise Enablis contributes resides primarily in its ability to identify the most promising entrepreneurs, who will be able to derive maximum benefit from the network’s support. The entrepreneurs selected are not just those with a professional profile that indicates high potential but also individuals with personal qualities matching the core values advocated by the network –  respect, integrity, professionalism and sustainability. Members are recruited mainly through dedicated competitions (the Business Plan Competition or BPC) or by a process of election.

The competitions have proved especially popular – the last BPC held in South Africa attracted more than 1,500 applicants. Organised with the support of local partners (universities, financial institutions, media partners, etc.), they are designed to select candidates who may or may not have already launched their SME. A panel of judges selects one winning business plan for each category; candidates are assessed on the viability of their business and its potential for growth and job creation. The winners receive a financial sum to launch or to support their businesses and automatically become members of the network. Election to membership is based on a series of interviews designed to assess the candidate’s motivation, the level of maturity their SME has attained and their financing requirements. Whatever the pathway by which they are selected, all members are officially accredited at a ceremony during which they undertake to abide by the Enablis core values.

Network members are divided into three categories corresponding to different stages of business development and different levels of experience. Members belonging to the Bronze category are potential entrepreneurs who possess the requisite competencies to launch their business; Enablis helps them to structure their plans more effectively. Silver category members can belong to Stage 1– their business is in its first 18 months of existence and their key priority is survival – or to Stage 2, when the business has entered the stabilisation phase, having been in existence for between 18 and 36 months. Gold category members, who represent around 30% of the network as a whole, have an established SME business (in existence for more than three years) with several employees and significant potential for further job creation. ¹ The members in this category run workshops or act as judges assessing membership candidates.

Training, mentorship and other benefits for members

This division into categories has a dual benefit: the training offered to members can be tailored to the real-life needs of their business as it grows, while at the same time offering them a pathway for progression within the network, with the aim of helping them move up to the next category. Training is provided by network members or by external consultants and aims to build relationships between individual members and the wider network and to grow their entrepreneurial competencies. Every year, each member is assigned a “road map” identifying his or her strengths (to build on) and weaknesses (to remedy); training priorities are determined accordingly.

International mentoring, which is reserved for Gold category members, is a key component of the resources offered to the network’s entrepreneurs. Mentors are recruited at fundraising galas held on behalf of the Enablis Foundation in Canada each year. Each international mentor – generally an executive in a major corporation – selects from a number of candidates the individual entrepreneur he or she will advise at least once a month over a period of two years. This programme is also a way of raising funds for the Foundation which are then channelled into Enablis. The Foundation is also charged with finding “sponsors” – mainly companies for whom this is an opportunity to fulfil their duty of corporate social responsibility – to pledge $15,000 to support each mentor-entrepreneur pairing.

In addition to international mentoring, Gold category members are able to access the “E-Circle” programme. ² This programme brings members together on a regular basis in groups of eight to ten – individuals operating in different activity sectors, and not connected by client-supplier or similar relationships. The members involved in this programme work together to find a solution to a specific challenge faced by one of their group. Linking the members of the same level allows them access to the core value of the network, the one which is created by sharing experiences.

The final resource available to aid member development is a web portal called GENIE (Global Enablis Network Information Exchange), initially developed with assistance from Microsoft, and later comprehensively remodelled by an SME based in the suburbs of Johannesburg. GENIE is used for training event registrations, for organising E-Circle meetings and facilitating networking among members both locally and internationally.

Supporting members in their search for financing

It is well known that access to financing remains one of the key difficulties encountered by SMEs in developing countries and elsewhere. Microfinance may have generated a good deal of enthusiasm, but investment platforms for projects on a scale larger than a few thousand dollars are still few and far between. For traditional banks, meanwhile, financing SMEs is often regarded as being both too risky (lack of visibility regarding the projects concerned, inadequate up-front capital) and too expensive.

The NGO’s financial arm, Enablis Financial Corporation (EFC), operates at the heart of this segment, halfway between traditional banking and microfinance – a segment categorised as “mesofinance”. In order to fill the financing vacuum suffered by SME start-ups, EFC grants loans to entrepreneurs, applying specific criteria to determine their allocation. First of all, the financing needs to be provided at the right moment in the company’s life cycle: it is mainly Gold category members who are eligible for this type of financing. EFC’s investment committee examines the loan appli
cations, which need to fulfil predetermined financing criteria. The viability of the business and its potential for creating local jobs are assessed, along with the member’s track record within the network (length of membership, commitment to training). The investment committee – whose members include representatives of partner financial institutions and SME finance consultants – examines all loan applications submitted.

EFC has set up agreements with banks and other local, private and governmental financial institutions, in South Africa ³ and in East Africa (Kenya, Tanzania and Rwanda) – with a preference for partnerships with market operators looking to grow their portfolio of SME investments and improve their offering of financial products for businesses. For its partners, EFC offers the advantage of submitting applications from entrepreneurs who have already been preselected and for whom it provides a guarantee (covering 50% of the agreed loan). In addition to this preselection and loan guarantee, the training provided by the NGO, in the form of peer-to-peer support and the international mentoring programme, also provides the banks with clear evidence of quality and professionalism. To minimise the risk of default, post-investment monitoring is maintained throughout the repayment period: monthly meetings are organised with all entrepreneurs who have been granted a loan to monitor their financial performance.

Even though EFC does provide loans to entrepreneurs within its network (see box), above all Enablis seeks to give its members the skills and resources they need to access financing more easily on their own account. The training provided – including training in the preparation of financial statements, for example – prepares entrepreneurs for putting together funding applications compliant with bank requirements.

The Enablis investment funds in South Africa

The loans provided by Enablis in South Africa are managed by two funds. The Khula Enablis Loan Fund or KELF was launched in 2004; with a capacity of $4.5 million, it was closed to all new loans in 2011. The Khula Enablis SME Acceleration Fund or KESAF has a capacity of $6.25 million; it was launched in 2006, and closed to new loans in 2012. The loans take the form of equity shareholdings or debt. KELF is a loan guarantee fund enabling entrepreneurs to access financing at preferential rates – to date it has guaranteed funds totalling $2.7 million. KESAF focuses on high-potential growth sectors and finances loans of between $2,200 and $227,000; in all KESAF has issued loans in excess of $3.1 million. Twenty-nine of the 64 members financed by one or other of these two South-African funds have already repaid their loans in full – and in the process they have created 317 jobs.

After ten years of existence the results are highly encouraging. In East Africa, more than 70% of the network’s members – in an independently conducted survey – stated that they had attracted new clients and improved their offer of products and services thanks to the support from Enablis. Internal studies have also shown that each member has directly created an average of eight jobs since joining the network – which means that the network has directly created nearly 20,000 jobs in Africa. Enablis opened an office in Buenos Aires, Argentina, in 2011, its first move into South America, and is planning a launch of its operations into French-speaking Africa by 2015. The network’s growth model for the future is based on a federation-style organisation structure, its federated members being its local bureaus using the Enablis methodology to train their entrepreneurs. In this way, each one will evolve as an independent non-profit organisation which will both benefit from belonging to the federation and directly participate in its management and development. This new development model will also facilitate still greater enrichment of the Enablis methodology, drawing on the experience and best practice shared among the various member organisms.

Footnotes:

¹ A survey in South Africa, based on self-assessment, undertaken in February 2013, revealed that the majority of Gold category members were planning to employ between one and three additional staff members during the following year.
² Based on a program of Young Presidents’ Organization (YPO) which brings young business leaders together in an international network. Founded in New York in 1950, the YPO brings together nearly 21,000 business leaders from more than 125 countries.
³ Including FNB (First National Bank), for example, and the government agency SEFA (Small Entreprise Finance Agency).