Remit Fund: Harnessing the Power of Venture Philanthropy as a development tool in Africa
Remittances are on track to becoming the largest source of external financing in developing countries. In a 2018 report, The World Bank noted that remittances to Sub-Saharan Africa were estimated to grow by 9.6 percent from $42 billion in 2017 to $46 billion in 2018. The amount was projected to increase to $48 billion by 2019 and grow even further up to $51 billion by 2020. Why should this matter? Well, the more money the diaspora sends to the Motherland, then the more money transfer operators make and the more investments they can make to social enterprises such as RemitFund. With Venture Philanthropy becoming a viable social investment and way of giving back, impact-driven organisations are beginning to notice. RemitFund founder Grace Camara saw this opportunity and seized it.
Venture philanthropy is the application or redirection of principles of traditional venture capital financing to achieve philanthropic endeavorsInvestopedia
Grace, originally from Sierra Leone, is a Lawyer by profession but has always been passionate about International Development. As she worked with various organisations such as Oxfam, she found herself assisting diaspora led businesses and questioning the approach of development from a Western perspective. A series of events resulted in her embracing her niche and starting Remit Fund, a non-profit organisation that leverages funding from financial services providers and money transfer operators to empower Africans in the diaspora. The organisation approaches partners such as Western Union with a value proposition that enables the companies to reinvest their profits to support diaspora-led SMEs to scale. They invest in order to build and support sustainable impact businesses that foster development in Africa.
We aim to democratize access to finance for African-led businesses that strengthen local economies, thereby creating greater independence from foreign aid, while empowering more indigenous, culturally-informed development solutions.-Remit Fund
In addition to providing financial assistance, RemitFund has various programs that stemmed from the realisation that there has to be a host of other activities that support their central ideology. These include industry-specific Masterclasses and Facebook Live sessions that bring together industry professionals, investors, and startups in the diaspora. The organisation is also looking to implement an Accelerator Program because they understand that even revenue-generating SMEs need practical assistance in order to scale. Because RemitFund can only invest in 5 to 10 businesses every year, they have begun plans to launch an investment platform that will assist businesses at any stage to crowdfund. Their unique selling point for this platform is that once the enterprise reaches its target, its MTO partners will match the money that the enterprise manages to raise.
Partnerships have certainly been a major contributor to the success of RemitFund. Of particular interest is their recent partnership with the Mara Foundation, the philanthropic arm of Pan African multi-sector business services company, Mara Group. The Foundation will integrate into its Mara Mentor platform, a platform that matches Diaspora Entrepreneurs and Mentors who provide business advice and mentorship as a form of assistance.
With RemitFund’s focus on sectors that are SDG aligned and with the goal of job creation, the organisation is certainly contributing to Africa’s advancement and changing the narrative that has for so long resulted in the underdevelopment of the African continent.
Listen to my full interview with Grace in this episode: