No Money No Growth!

The Role of Capital in Community Enterprise Development

Summer Reflection From Smart P. Baitani, COSAD Inc.

October 2009

Last summer, when I visited New York, Sean McNamara, founder of Intrade.com and a COSAD Board member and chair of the Board’s executive committee gave me a copy of a book which I consider to be one of the most relevant books about Africa called “Dead Aid”. For some of us who have been who have been consumed with an insatiable desired to promote the book clearly provides a key answer to a fundamental question: “How do we turn our chronically-depressed communities into an inspiring miracle of dazzling economic growth?”

Answer: “The determination of Africans, and genuine partnership between Africa and the rest of the world, is the basis for growth and development”.

When I think of the best example of self-determination of the people of Bukoba, what comes to mind are a handful of hard working young entrepreneurs who put in over 70 hours a week to support their families and make a difference in the communities. What would be a genuine partnership to such persons?

Most people we are supporting in Bukoba, Tanzania are talented, entrepreneurial, and creative. Their values and dedication to community and family are the same as ours. They just need to be connected to the global community and supported by people like us. Tanzania is endowed with vast resources and strategically located to potentially become the hub of economic success.

Yet these hard working young men and women are among the 2.5 billion people in the world who have no access to financial services. Library of evidences have shown that better access to financial services can fuel economic growth through increased investment in small and medium enterprises.

Working men and women, like Habakkuk Ngaihywa, a iron window maker and Grace Kahindoa, owner of a tailoring shop (who will train the “Sewing Singers”), are among the members of the 26 community groups which are a part of COSAD’s TACE (Tanzania Community Enterprise Initiative). In the last 5 years since these groups were first identified, only two groups have been given a $1000 each as part of the Mount Olivet’s annual benevolent fund. In other words, it will take over 20 years to give each group a $1000.00. For a person like Habakkuk who badly needed investment capital of around $25,000.00 to buy equipment , the $1000 per group is only a skin dip experiment, in his own words, designed to “make us feel good without solving the fundamental problem” of creating sustainable solutions to poverty.

TACE is an innovative market-based micro-enterprise model, which focuses on harnessing the social capital of community groups to build successful businesses toward sustainable economic development. Identifying the values and the strengths in the group as well as well as the potential its members is critical, but is only half of the equation. Providing tools, in terms of capital, training and market access is another part of the equation. The later requires a genuine partner beyond COSAD.

The partnership between RISE (Resources and Innovations for Social Entrepreneurs) and COSAD’s TACE is another testimony of creative partnership which will provide unprecedented access to innovative financial services to thousands of hardworking Tanzanians. RISE was designed to provide a more robust financial services that put into consideration critical business paths to growth and sustainability, including: cultural knowledge, marketing, business management training and great application of financial technology.

The RISE Fund seeks to accomplish to fundamental goals. These include:

a) connect successful local businesses with no access to growth capital with Social Capital Ventures whose principal business is to make loans to support mission-oriented, socially conscience, community-based projects, and

b) assist loan recipients with marketing and business strategies and supervise the Social Capital micro-loans under condition of preferential hiring of marginalized groups, as part of onsite TACE training to become future business owners themselves.

For More Information, Partnerships or Support, Please contact us:

Smart P. Baitani, Executive Director

COSAD, Inc. 4624 Hillsboro Avenue North Minneapolis Minnesota 55428

Tel: 612.227.0065 Email: smart@cosad.org Website: www.cosad.org

COSAD Mission:

To build partnerships that create community development through the support of projects involving micro-enterprise, health, education and culture.

COSAD Vision:

Empowering Tanzanians to get out of poverty, one community at a time.