Enterprise Bank

This Entry has been submitted.

Enterprise Bank

Kenya
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

A Bank that provides a savings scheme for entrepreneurs, provides venture capital for viable business ideas/plans acting as a share holder also providing and management expertise. After incubating the business to profit, the entrepreneur then either buys back the shareholding from the bank over time, or the enterprise is sold off to investors making money for both the bank and the entrepreneur.

About Project

Solution: What is the proposed solution? Please be specific!

Instead of just providing financing and banking services to businesses and sitting back, the Bank would be an actively involved partner in the enterprises providing business management skills and ensuring their success. The Bank would establish a separate division with qualified business managers to evaluate business ideas, select the viable ones, negotiate the terms of engagement and run the enterprises while providing training to the entrepreneur and ensuring return of investment. This I believe would ensure that the start-ups do not fail, while ensuring that the Bank fulfills a Corporate Social Investment mandate while still making a profit for its shareholders.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

With 1000 new and successful businesses each employing an average of 100 direct staff, the social impact would be immeasurable. The success of the new enterprises would have the domino effect of spurring innovation once the start-up capital barrier is eliminated.
About You
Organization:
Twenty Thirty Ventures Ltd.
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About You
First Name

Edwin

Last Name

Kiama

Your Organization

Twenty Thirty Ventures Ltd.

Country
About Your Organization
Organization Name

Twenty Thirty Ventures Ltd.

Organization Phone

+254202016677

Organization Address

P.O. Box 20760 - 00100

Organization Country

, NA

Organization Type

Non-profit/NGO/Citizen-sector Organization

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Your solution
Country your work focuses on

, XX

If multiple countries, please list them here. If your solution targets an entire region, please select it below

Easter Africa

Region(s) your solution focuses on:

Africa.

Range of turnover in your target firms, in USD

Less than $1 Million.

Average turnover in USD of your target firm

$ 250,000

Number of employees in your target firms

75-99.

Average number of employees of your target firm

100

Specify the size, average and range of expected loans or investments in each target firm

The Bank would only invest in viable businesses which it can safely take over and manage or sell of to investors should the entrepreneur be unable to actualize them. The bank would set up a separate business management division to run new enterprises. The Bank would be involved in day to day running of the enterprise until the entrepreneur is able to fully or partly take over the shareholding . The Bank would then dispose of its shareholding in full or retain part of it depending on the agreement with the entrepreneur. Since the Enterprise Bank would be involved providing most or the entire start-up capital and the day to day running of the enterprises, there should be no limit to the size of the loan as each business firm would be evaluated based on the potential return and success.

What stage is your solution in?

Idea phase

Innovation
How does your proposed innovation leverage public intervention in catalyzing private SME finance?

In my country Kenya and the East African region, we have a wealth of innovative business ideas. Finance however is hard to come by as most banks tend to concentrate on lending to governments and safe already established organizations, and charging of various fees to the clients to return a profit. Requirement for collateral is a major hindrance to SMEs accessing business finance. My innovation would eliminate the need for collateral while ensuring that viable business innovations see the light of day and that the innovators enjoy the fruits of their creativity. Should it then prove successful, it would act as a change driver in the relationship between banks and borrowers.

What barriers does your proposed solution address?

Lack of collateral, Lack of financial capacity.

If you checked any of these barriers, describe how your solution addresses them

1. The business idea/new business acts as its own collateral.

2. The Bank provides financial capacity.

Impact
Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact

The impact the Equity Bank Ltd. in Kenya has had on the banking industry in Kenya and beyond by making access to capital easier. Equity bank has rebuilt Kenyans confidence in banks with deposits and borrowing growing to amazing levels and the minimal loan default rate rate surprising most banking experts. A multinational like Barclays Bank who had closed most upcountry branches has had to open over 70 new branches just to try and curtail Equity Bank's growth which has risen to 80% of all bank accounts in Kenya!

How many firms do you expect to reach?

1000 New Firms in the first 5 years.

What is the volume of private SME finance you aim to catalyze?

$ 1,000,000,000

What time frame will be required to reach these targets?

10 years

Does your solution seek to have an impact on public policy?

Yes

What would prevent your solution from being a success?

1. Lack of capital
2. Lack of Capacity
3. Lack of a legal framework and
4. Resistance from regulators(Government, Banking regulations)

Sustainability
List all the funding sources that are required for the sustainability of this solution

1. Donor organizations
2. Philanthropists
3. Venture Capitalists
4. Shareholder funds

Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?

The uptake is likely to be phenomenal and the enterprise should be self sustaining within 5 years.

Demonstrate how your proposed solution will survive a potential loss of its largest private funding source

Profit from successful businesses the Bank invests in would be its biggest source of revenue.

Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation

Reputable business management and incubation experts.
Long term financing.
Government partnerships and guarantees.
Legislation.
Insurance.

Are there non-financial issues that could threaten the sustainability of your proposed solution?

Apathy. Lack of competences.

Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically

The idea aims to scale up through the potentially high growth new enterprise sector and then scale up regionally.