I had not known it was a public holiday. And so I proceeded as planned, business as usual. I noticed the unusualness of the day by the number of businesses that were closed.
Now, I was really curious. Why all these places had closed, I asked myself. I needed to find a place to scan and send a document not later than noon that day. Curiosity turned into anxiety. As if I had wondered out loud, the security guard replied anyways: “Oh, you mean you don’t know today is Asomusiyo.”
I didn’t quite register its English equivalence which prevented me from conducting a quick Google search for its meaning. However, that I had been raised in a family devoted to Catholicism meant that I could recall something about the day, but without the attendant details.
Assumption Day – thanks to media coverage – reminded me of something totally different: Entrepreneurship. Actually, it is probably difficult to think of many things in our context without linking them to that subject.
The reason being that the government has invested a lot of resources in efforts geared towards reducing poverty in general and particularly through reducing unemployment.
One of the things I immediately thought about was a story carried in this newspaper early last week that noted that attempts to create entrepreneurs in the country are facing difficulties because of something officials called a “charity mindset.”
Because almost everything – say, customer service –nowadays is blamed on this mindset, I paid attention. To face the problem of unemployment head-on, the ministry of Trade and Industry had, in 2011, thought of a programme that became very promising: “Hanga Umurimo.” It is an idea that made a lot of sense in theory.
It seeks to create ‘self-generating’ employment at the tune of 200,000 ‘off-farm’ jobs per year, according to the ministry website.
The programme sought potential entrepreneurs from across the country to turn whichever business ideas they possessed into a business plan. ‘Expert judges’ would select those projects with the potential to materialise into a business.
And given the reluctance for banks to provide loans to people without collateral, the Government of Rwanda – through the Business Development Fund (BDF) facility – would guarantee to the tune of 75 per cent of the business loan to successful competitors.
It is not surprising that the turnout was large. At least 16,000 people entered for the chance for self-employment. The judges deemed 487 of these to have viable proposals that could benefit from the programme.
Despite the government serving as collateral on the total loan, and for reasons and criteria that is not immediately clear, the banks decided they could provide money to only 242 loan applicants. Yet still, only 168 projects actually ended up getting funded to the tune of 2.2 billion francs, which averages to around 13 million Rwandan francs per project. Not bad for seed money.
A good idea goes bad
The problem is that 50 of the 168 the beneficiaries are defaulting on the loans because either the businesses are partly or fully closed, and are therefore not generating revenue.
Moreover, despite the 30 per cent default rate that these figures represent, the Ministry of Trade insists that the programme – in pilot or trial phase from 2011 to 2014 – has been a success because it “attracted more than 16,000 business ideas countrywide [which] revealed that ‘a strong demand exists,” according to the Minister for Trade and Industry. “It’s promising to see that entrepreneurship culture is really rising among Rwandans,” he added.
Clearly, this is a programme that was underlain with an assumption that everyone is a potential entrepreneur.
A charity mindset
Janet Kanyambo, the BDF fund manager, hold an alternative perspective. She points to a “charity mindset” or attitude that “threatens the whole idea of BDF and if we don’t work together to sensitise the public that BDF money is not for charity.” Without that, she warns, “the fund’s future is at risk.”
Clearly, therefore, there are lessons from the Hanga Umurimo programme. The first is about reexamining our assumptions about entrepreneurship. The second is in the targeting of the beneficiaries.
Third is that once the first two are done properly a situation shall arise where, instead of replacing a failed programme with another that yields temporary enthusiasms only to end up similar to the one it replaced, more transformative programmes will surface.
As a final thought, it is crucial that we unpack this blanket idea of ‘a charity mindset.’ Its proper understanding – given its widespread tentacles in explaining diverse failures in key programs and initiatives– will unlock transformative bottlenecks.
For this particular case here, it may end up that entrepreneurship is about a predisposition, not an idea to be funded, for instance.
Let’s suppose it as a lifestyle that values work (work ethic), one that is matched with an attitude that considers that one may not take off all the public holidays as declared, at least not to in the manner that a public servant would.