Thanks to a loan from OVO, entrepreneur Leonard Shayo can start producing pre-cooked beans in Tanzania. "It's fantastic to help develop a project like this," experienced Hugo Van de Voorde, the volunteer who prepared the investment for OVO.
With a 50,000 euro loan, Entrepreneurs for Entrepreneurs (OVO) completes the financing of Tti Pre-cooked Beans. This Tanzanian startup is preparing pre-cooked beans using a special environmentally friendly process, which improves the nutritional value of the beans.
The financing completed, Leonard Shayo can realize his project. The OVO loan will be used, among other things, for the installation of machinery that cooks beans, using a vacuum process. The financing comes from a number of “business angels”, who also volunteer at OVO, and from the Acceleration Fund. This investment fund was set up by OVO in cooperation with the King Baudouin Foundation in order to support the growth of African companies.
The story actually begins in the Ugandan capital Kampala. Tti Pre-cooked Beans participated end 2019 at the SusTech4Africa, a selection process for starting and growing companies with sustainable technology organized by OVO in Uganda, Rwanda, Senegal and the African diaspora. During that multi-day boost camp, participants receive advice and questions about their business model and financial plans from a team of volunteers consisting of seasoned entrepreneurs and students. Those who pass the selection receive intensive guidance and the prospect of a loan.
"Shayo specifically flew over from Tanzania to Uganda", remembers entrepreneur Hugo Van de Voorde. "The project was still in its start-up phase, but he was already an experienced manager. Shayo previously had a bakery with three to four branches and was able to sell them. You immediately noticed that he was experienced.
Van de Voorde took over the file as lead screener at OVO. "Shayo's project became very quickly concrete. He could immediately present a business plan and a financial plan. Of course, we discussed thoroughly all details. But important to me was that he was receptive to our ideas and suggestions".
Knowledge and expertise
Due to the corona crisis, which is also paralyzing the African economy, the project has been somewhat delayed, but in the meantime the construction of the production site has started. "On a technical level, we helped with the design of the site, for example by making suggestions for food safety. And we also helped thinking about how best to organize the operation", says Van de Voorde, who himself was a consultant in the horticultural sector and afterwards had his own company with plant materials.
"Our role was mainly to spar with Shayo and share our experience. That way we try to transfer our knowledge. For example, we helped out a little with the organization chart of the staff and the timing of the start-up. A number of OVO people who are very good in figures helped with the financial plan. That plan was there, but it was critically reviewed and adjusted", says the lead screener. That is the person at OVO who takes the lead of a team of volunteers who supervise an investment dossier. If the evaluation is positive, the file can be submitted for a loan.
A special feature of Shayo's project is that it buys its beans from 800 local farmers. They are united in two cooperatives supported by the Belgian NGO Rikolto, formerly Vredeseilanden. "For the farmers who grow brown beans here, a long-term cooperation with a buyer who offers good and stable prices is extremely important. This allows them to invest in quality improvement and more sustainable cultivation methods", explains David Leyssens, who as regional director for East Africa for Rikolto, calls from Tanzania.
The product itself also has a major impact. Leyssens: "Beans are a protein-rich alternative to meat, which is often too expensive. And pre-cooked beans are also ecologically interesting. On a charcoal fire, beans have to cook for hours, while the deforestation for that charcoal causes a lot of damage to the environment. With an industrial process, that impact becomes much smaller".
All these elements are also very important for OVO, Van de Voorde believes. "Of course, you invest first and foremost in an entrepreneur and a company. But indirectly also in an entire chain. By working together with the entire cooperative, you draw a few hundred farmers into the story".
It was Rikolto who brought Shayo in contact with OVO, which eventually brought him to Kampala. "That boost camp helped him a lot to sort out his business model and figures," says Leyssens. "And that loan is, of course, a gift from heaven. It is extremely difficult to find capital here, and only at very high interest rates. I have seen few interest rates below 20 percent. So an affordable loan makes the difference between realizing dreams or not".
OVO grants loans of up to 50,000 EUR and usually applies an interest rate of 7 percent. Leyssens: "Many financial parties are looking for investment opportunities in East Africa, but often they only look at large projects. What is lacking is a financing for projects that fall in between, too small for large financiers and too large for microfinance. That is exactly what OVO does.
The collaboration makes me want more. "We see this as a very successful pilot project. The idea is to send other companies, with whom we think we can make a good partnership for the farmers, to a SusTech4Africa," says Leyssens. "Big donors are asking that NGOs work more together, and in theory there is a lot of talking about that, but here it has also succeeded in practice".
Also the OVO volunteer Hugo Van de Voorde wants more of these experiences: "I have been an entrepreneur myself. I remember what it was like to be 22 years old and looking for money. I know how important it is that somewhere you get opportunities. It's fantastic to be able to help develop a project like this".
"I would warmly recommend this to other entrepreneurs," he concludes. "Of course, it takes time. I won’t lie about it. But it is very satisfying to see someone get a chance to grow. I strongly believe in entrepreneurs. For me, entrepreneurship is the way to a more sustainable future in Africa."