RE: “We need more private sector presence in ICT” (The New Times, March 18).
You are spot on especially on the funding part. I would call upon all local Rwanda venture capitalists to invest in some of these potential money makers. Long gone is when money could be made only from real estate investments or stock exchange.
I recently came across ikiraka.com which aims to match short-term assignments/ibiraka in Rwanda. This is probably similar to online work sites like freelancer, Kenya’s kuhustle.com, etc.
The potential for such a solution at casual glance is quite good given the high unemployment figures, and the good internet penetration in Rwanda. From the myriad business case, in the near future I foresee such a service as having good growth potential. Currently such young innovators are cash strapped and as little as 2 or 3 million francs would go a tidy way to help them scale up.
Going to the bank for funding of ICT applications/ideas is out of question as banks usually require physical collateral like land, house, and government contract to fund business capital funds. For such an investment, a venture capitalist can get a percentage of the business/profits etc which means that once the business is booming, one stands to make some good amount for money. Of course, it is risky, but also quite worth it.
Unfortunately, the Government is trying its best to woe international venture capitalists, but it’s up to us Rwandans to sometimes also jump in and take the lead.
KLab/innovation spaces should also focus on how to woo local Rwandan venture capitalists as the next step in order to bring them to the next level.
Lastly, The New Times mentioned 60 companies from kLab; can we have the full list? Who knows? One may be interested in investing in them.
Well put Kigali Girl. Will look up these companies for sure.
The other day I had a chat with one seasoned banker and asked him what is the point of lending someone Rwf100 million to build a so-called investment property when the monthly rent collected will not be more than Rwf600,000 yet his mortgage is at least Rwf1.8 million a month. The answer was flat and straightforward: “In case he fails to pay, we will put his property to auction.”
So where is the value creation? Yes one can argue during construction, labor, suppliers, engineers are paid… Now, I bet an investment of Rwf100 million into a software disruptive technology can probably generate Rwf1 billion over a period of three to four years and create employment for at least 50 people or more and be exported at one point.
Try to sell the idea to the same banker, the answer is, “Do you have a house as collateral?”
All the kid has to his name is a laptop and maybe a smart phone. That’s where some risk taking Rwandans with some residual income need to come in.