Enhancing sustainable youth start-up eco-system in Malawi through a novel financing model
Explain your project in details:
The project aims at financing at-least 40 small and medium-sized enterprises (SMEs) and creating more than 1000 job opportunities through business partnership. Absence of collateral to access the seed capital and long term (5-10 years) on-business training, differentiate Enterprise Innovation Hub (EIH) from common financing institutions. The delivery of this project constitutes 4 key milestones: 1. marketing, 2. recruitment, 3. financing, and 4. monitoring and evaluation. To minimize the investment risk, EIH uses legal contract with the SMEs, employ a robust recruitment process (first online application, then two one-to-one interviews and end with field assessment), and ensure use of recommended financial accounting principles. To track progress, the SMEs are obliged to submit monthly technical and financial performance reports. Convenient communication system between SMEs and EIH is in place to facilitate identification of gaps requiring tailor-made capacity building interventions.
Impact of your enterprise on sustainable development
To date, EIH has financed and is mentoring 6 SMEs, in Agriculture (2), food processing (2), transportation (1) and e-commernce (1). Total number of direct jobs created 21. Within next 3 years of implementing, the key project impacts on sustainable development will mainly be the increase in number of SMEs and Job opportunities created. Specific measurable achievements will include: at-least 19 lucrative SMEs created by the year 2019, more than 95 direct and 210 indirect jobs for Malawians created by year 2019, market for over 500,000 Malawians, for selected products and services in industries such as agriculture, transportation, e-commence and health, created and/or enhanced annually, annual income of the direct beneficiary (young entrepreneurs) increased by more than 60% by year 2019 and increased access and utilization of capital to at-least 224 young graduates entrepreneurs annually by year 2019.
Sustainability and future plans
The key revenue stream for this project will be dividend from the respective SME to be and being supported. This revenue stream is estimated to contribute about 58% of the total revenue during the next 3 years. Additional revenue streams will be share issuing (16%), referral fees (15%) through our partner investor focusing on tech entrepreneurs, and 11% to be from grants and founders’ contributions. The grants and founders’ contribution are mainly the main sources of finance during the first year and second year. The current priority customer segment constitute graduate entrepreneurs estimated at 16, 000 in Malawi. The proportion of economically inactive population of tertiary graduates in Malawi is estimated at 1.4% and on average, a total of 1,860 students graduate annually. The EIH annual potential customers are within this 1.4% (224). EIH main target is 15% of the potential inactive graduates (35) per year. Until 2019, the specific number of SMEs to finance and mentor will be limited to at-most 6. The estimated number of lucrative SMEs EIH needs to break-even is 9 with an average contribution of $1,557 per SME. The two other customer segments to be targeted to grow the business including general entrepreneur’s startups and existing SMEs intending to grow their businesses. Our fundraising target is $25,000.
Your profile as an entrepreneur
Daniel Chiumia is a serial entrepreneur, a specialist in dairy cattle production and animal physiology. Currently pursuing a Ph.D. at ETH Zurich in Switzerland. He holds a certificate in business concept development from CTI Entrepreneurship – the Swiss federal training programme for startup founders. In 2015, Daniel was one of the winners of the NextGen in Franchising Global Competition, the Tony Elumelu Foundation Entrepreneur in 2016 and a participant in 2017 Adansonia Entrepreneurship Programme. For over a year, Daniel has been working with startups through a student club, ETH entrepreneur Club, and is fascinated to work and/or interact with entrepreneurial minded people.