Social Enterprise Ecosystem Country Profile

KENYA

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AcknowledgmentsThis report was prepared by Cristina Navarrete Moreno (Private Sector Development

Specialist) and Natalia Agapitova (Senior Economist). However, without the contribution

of several colleagues the report would have not reached its final form. Therefore, we are grateful for the help of Elaine Tinsley, Belen Sanchez, Marta Milkowska, Ergun

Ertekin, Juan Carlos Guzman Hidalgo, Branislav Kralik, Niharika Hanglem, and Pallavi

Shrivastava.

The report uses data and information gathered by Endeva and BoP Learning Lab. We

wish to acknowledge the great inputs received and the particular effort of Sara Balan

(project manager, BoP Learning Lab) and Christina Tewes-Gradl (project director,

Endeva). Sharon Fisher provided editing and design support.

Copyright © April 2017. The World Bank, 1818 H Street NW, Washington, DC 20433, USA. All rights reserved.

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Overview InSub-SaharanAfrica,with388millionpeoplelivingonlessthanthepovertylineofUSD1.90perdayandrapidpopulationgrowth,thechallengeforthepublicsectortodeliverserviceswillonlygrowinthecomingyears.1Sofar,traditionalactors,includinggovernments,civilsociety,andtheprivatesectorhavebeenunabletosolvetheproblemofprovidingessential,qualityservices,suchasaccesstowater,energy,sanitation,education,andhealthcare.Inthiscontext,socialenterprises(SEs)haveemergedasanewtypeofdevelopmentactorwiththepotential to help solve the service delivery gap. During the last decade, SEs in Africa increasinglyaddress service delivery gaps for the poor in novelways,with Kenya and SouthAfrica among theleadingcountriesintheSEsector.SEsareprivatelyownedorganizations—eitherfor-profit,non-profit,orahybridofthetwo—thatusebusiness methods to advance their social objectives. They focus on maximizing the social andenvironmentalimpactfortheirtargetbeneficiariesincontractofmaximizingtheshort-termprofitsfortheir shareholders and private owners. Due to their strong presence and understanding of localcommunities, SEsareoftenable to reachunderservedpopulations through flexibleand innovativebusinessmodels.Although positive examples abound, SEs have not yet fully realized their potential in Africa.Withvariationsacrosssectors,manySEsstruggletoscale-upanddevelopsustainablemodels.SEsfacehighbarriers that areoftenaggravatedby thedifficultmarkets they serve.Commonchallenges includeunconduciveregulationandpolicy,lackoffinancingsolutions,weakinfrastructureandhumancapital,andalackofinformationandnetworks.Inaddition,SEsarenotorganizedasasectorandfallbetweentraditionally recognized public and private organizations. The public sector often does not play acatalyticrole.TheSEecosystemiscomprisedofactors,institutions,andnetworkthatsupportSEsincontributingtodevelopmentgoals.Inmanydevelopingcountries,theSEsectorstilllacksasupportiveecosystem,orenabling environment,whichwould allow theseorganizations to thrive and grow. Four ecosystemdimensions capture the enabling environment for SEs: policy and regulation, financing solutions,infrastructure and human capital, and information and networks. Where these dimensions areimproved,SEscansignificantlycontributetoaservicedeliverychallenge.In developing countries and in particular inAfrica, there is limited data collected and analyzedonexistingsupportingfactors,challenges,andopportunitiesfortheSEsector.ThisreportprofileshowSEs across seven African countries—Kenya,Malawi, Rwanda, South Africa, Tanzania, Uganda, andZambia—address service delivery gaps for poor populations and assesses the status of their SEecosystems. The report targets development practitioners involved in policy design andimplementationwhoareinterestedinnewwaystoaddressservicedeliverychallenges.Thesespecificexamples of challenges and opportunities for SEs in Africa can highlight ways to increase thesustainabilityandscaleofcurrentandfutureSEbusinessmodels.

1Beegle,Kathleen;Christiaensen,Luc;Dabalen,Andrew;Gaddis,Isis.2016.PovertyinaRisingAfrica.Washington,DC:WorldBank.https://openknowledge.worldbank.org/handle/10986/22575.

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GeographicThe report focuses on seven African countries: Kenya,Malawi, Rwanda, South Africa, Tanzania, Uganda, andZambia(Figure1).Thesecountriesrepresent:

• Differentlevelsofsocio-economicdevelopment.• DifferentstagesofSEdevelopmentandecosystem

support.• Tworegionalclusterstotestforregionalpatterns

andpotentiallyallowregionalknowledgesharingandlearning.

ServiceSectorsThe report covers four basic service areas: education,energy, health, and water and sanitation. These basicservices lay the foundation for alleviating poverty,reducingincomeinequalities,andultimatelycontributingtoeachcountry’ssocio-economicdevelopment.BeneficiariesThe report considers target beneficiaries for SE activities as underserved, low-income populationsrepresentingtheBaseoftheeconomicPyramid(BoP),livingonlessthanUSD1.90perdayin2015(theWorldBankGroup’spovertylineatthetimeofstartingtheresearch).AnalyticalFrameworkIn this report, the ecosystem framework consists of four parts: demand, supply, SE situation, andecosystemdimensions.SEsareattheheartofthemodel(Figure2).SEopportunitiesforprovidingservicesdependonthedemandbytheBoPandtheexistingsupplysituation.ThefourecosystemdimensionsinfluencetheabilityofSEstooperateeffectivelyandscaleup.Theecosystemframework guides the analysis at all levels: country,service sector, and service sub-sector. Table 1describeseachelementinmoredetail.

Figure1.Focuscountriesinthisreport

n Kenya

n Malawi

n Rwanda

n South Africa

n Tanzania

n Uganda

n Zambia

Figure2.Ecosystemframework

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Table1.Fourpartsoftheecosystemframework

DataCollectionEndeva and BoP learning labs conducted desk and field research to map the SEs and ecosystemdimensions.TheybasedtheSEmappingonpubliclyavailableresourcesanddeskresearch,whichwassupplementedwithsemi-structuredinterviewswithSEsandlocalstakeholdersrepresentingdifferentpartsoftheecosystem.Accordingly,thesamplesizeforeachcountryvariesinthereport.Theinformationisbasedon:• 59interviewswithSEs• 140interviewswithstakeholders• InterviewswithBoPserviceusers• Adatabasewith271SEexamples

Demand • BoPneeds:WhatarethedevelopmentchallengesandunmetneedsfortheBoP?• BoPmarket:What are the volume and dynamics of the current BoPmarket?

What are the main challenges related to the 4 A's: awareness, accessibility,affordability,andacceptance?

Supply • Public supply:What is the structureand levelof currentpublic supply for theBoP?Whataresupplygapsandchallenges?

• Non-publicsupply:Whatisthestructureandlevelofcurrentnon-publicsupplyfortheBoP?Forexample,fromNGOsortheprivatesector.

• Donors:Whatroledodonorsplayinthesector?SEsituation • SE understanding and presence: How many SEs are there? How are they

perceived?• Type:Howbigarethey?Howaretheyorganized?Whatistheirlevelofmaturity?• Value chain: What are typical activities in the value chain? In which service

sectorsandservicesub-sectorsareSEsactive?Ecosystemdimensions

Ecosystem dimensions capture the enabling environment for SEs. This includesdimensions thatare specific to SEsanddimensions thatdetermine theviabilityofmarket-basedapproachesmorebroadly.• Policy and regulation:What are the main policy drivers or barriers for SEs?

Includingpolicystrategy,regulation,andlevelofpublic-privatecollaboration.• Financingsolutions:WhatarethesourcesoffundingforSEsaswellasfortheir

clients?Includingcommercialfunding,consumerfinance,andgrantfunding.• Infrastructureandhumancapital:Whatareimportantinfrastructureissuesthat

affecttheoperationsofSEs?WhatistheskilllevelavailableforSEs?Isthesectorabletoattractrelevanttalent?

• Informationandnetworks:Whatorganizations,incubators,networks,training,etc. are available to build awareness, knowledge, and capacity among SEs, oradvocateforSEs?

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Social Enterprise Ecosystem Country Profile

KENYA

KenyaisatestbedformanySEs,severalofwhichhaverecentlyscaledandareservingasinspirationfor other countries. The SE ecosystem is characterized by a positive view on private sectorengagement,manysupportentities,butlowpublicrecognitionofSEsasadistincttypeofventure.Policy and Regulation • Positive,butoftenhands-off,policy

approachtowardstheprivatesector.

• PublicBenefitActhasbeendiscussedandcouldimpactthelegalformforSEs,butprocesshasstalled.

• ManyPPPsinKenya,butcurrentpauseinseveralsectors.

Information and Networks • ResearchonSEsisgrowingfroma

lowstartingpoint.• FewSEspecificnetworksexist,but

SEsleverageothernetworks.

Financing • Kenyahasarichlandscapeofgrant

makingorganizations.• Impactinvestingmarketisamong

themostdevelopedinAfrica.

• PioneeringfinancingmechanismsaredevelopinginKenya,includingmobilepaymentschemes.

Infrastructure and Human Capital • ManySEsaretech-basedinKenya

andareleveraginghighmobilepenetrationrates.

• SEsinKenyaattractsmanyexpats,buthaveahardertimerecruitinglocaltalent.

• ThereisadiversesupplyofcapacitybuildingforSEsinKenya,mostisSE.relevant,butnotSEspecific.

SE Situation • LowSE

understandingamongpolicymakersandpublic,buthighlevelofSEsoperating.

• KenyahostspioneeringSEsacrossallservicesectors.WaterandsanitationhasfewestSEs,butisstillaheadofothercountries.

BoP Need and Demand • Kenyaissimilar

toSouthSaharanaverageexceptinenergysectorwhereKenyalagsbehind.

• BoPdemandforservicesvariesacrosssectors,withlowestdemandforsanitation.

Supply to the BoP • Publicservicevaries

acrosssectors,fromverylowurbanwaterprovisiontowidespreadeducationservices.

• Diversenon-publicserviceprovidersplaystrongroleacrosssectors.

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StudybackgroundThisprofileispartoftheSEecosystemmapping.SEsaredefinedas non-public providers of services to low-income populations,basedonasustainablerevenuemodelandasocialmission.Theprofilemapstheecosystem forSEs inKenyabasedonaguidingframeworkthatidentifieskeyelementsoftheSEecosystem.Theprofile supplements service profiles and a report with cross-cuttinganalysis.Theserviceareasare:

• Education• Energy• Health• Waterandsanitation

Theprofile is basedondesk research and interviewswith localexperts and SEs conducted in summer 2015. Unless otherwisenoted, informationprovided in theprofile is basedon researchandinterviews.Thelistofintervieweesisprovidedintheannex.

Countryfacts2• Population:44.5Million

(2014)• BoP<USD1,25perday:

15.5Million(2005)• GDPpercapitaPPP:

USUSD2795(2013)• AverageGDPgrowth,

2009-2013:5.6percent

NEEDANDDEMANDFORSERVICESBoPneedsKenyahasaround44.5millioninhabitants(2014).Theannual population growth in 2009-2013 was amoderate 2.7 percent on average. Even though arelativelylargenumberofpeopleliveonlessthanUSD1.25 a day (15.5 million in 2005), the share of thepopulationwhoarepoorisnotashighasinotherSub-Saharan African countries studied (e.g., Malawi orZambia).3ThereareBoPservicechallengesacrossallfour sectors (education, energy, health, water andsanitation).Acrossthecountry,only23percentofthepopulationhadaccesstoelectricityin2010,andonly8percentinruralareas.4Approximately30percentofthe population has access to improved sanitationfacilities,whilethesituationisbetterforwater,where62percenthaveaccesstoanimprovedwatersource(82 percent in urban areas and 55 percent in ruralareas).ThemainBoPchallengeintheeducationsectoris access to high quality education despite highinvestment and free public schooling. Availability ofhealthservicesfortheBoPalsoremainsachallenge,which has been exacerbated by implementation ofdevolution.

2WorldBank,WorldDevelopmentIndicatorsDatabase.http://data.worldbank.org/data-catalog/world-development-indicators.3WorldBank,WorldDevelopmentIndicatorsDatabase.http://data.worldbank.org/data-catalog/world-development-indicators.4WorldBank,WorldDevelopmentIndicatorsDatabase.http://data.worldbank.org/data-catalog/world-development-indicators.

63.8

61.7

29.6

23.0

114.4

62

64

30

35

100

Cause of death, by communicable diseases and maternal, prenatal

and nutrition conditions …

Improved water source (% of population with

access), 2012

Improved sanitation facilities (% of population

with access), 2012

Access to electricity (% of population), 2010

School enrollment, primary (% gross), 2013

KenyaSub-Saharan Africa average

Figure 3. Key indicators of access to basic services in Kenya (Source: World Bank data)

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The BoP demand for services vary across the four sectors. Within health and education the BoPrelativelyoftenturntowardslow-costprivateoptions,includingfaith-basedproviders,privateschools,andhealthproviders.Inruralareaswaterisoftenseenasapublicgood,whileurbanBoPareusedtopayingforwater.HeremarketsareofteninformalorNGO’sprovidefreeservices,whichmeansthatwatermarketscanbehardtoaccessforSEs.Intheenergyandsanitationsectors,newtechnologyorproductshavebeen introduced.Acceptanceandaffordabilityhavebeenbottle-necks in these twosectors resulting in slowproduct adaptation andmany failed SE attempts. For someproductsBoPmarketsarehoweverchanging.IntheBoPmarketforsolarenergyawarenessactivitiescombinedwithnew mobile based financing models are lowering the up-front economic threshold and boostingdemand.SUPPLYOFSERVICESSupplybythePublicSectorPublicsupplyvariesacrossthesectors.KenyahasbeenabletoimproveBoPprimaryschoolattendancethroughfreeaccess,buthaslargequalityproblemsintheschoolsystemdespitehighinvestment.Theongoingdevolutionprocess (seePolicy Strategy) is challenging thepublichealth systemandmanypublichospitalssufferfromashortageofmedicalsuppliesandunderstaffing.Inoff-gridareas,publicenergysupplyisalmostnon-existent,butheavyinvestmentsaremadewithinenergy,whichwilllikelyalsoaffectBoPaccessovertime.PublicwatersupplyandsanitationinKenyaarecharacterisedbylowlevelsofaccess(approximately38percentofthepopulationdoesnothaveaccess), inparticular inurbanslumsandinruralareas,aswellaspoorservicequalityintheformofirregularwatersupply.Watersupplyisasignificantpublicdeliverychallengeduetounpredictableweatherpatternscausingdroughtsandwatershortages.Kenyahaslowrenewablewatersourcesandisconsideredtobeawaterscarcecountry.Sanitationchallengescausedbyurbanmigrationandlackofwaterwillbeagrowingchallengetothepublicinfrastructure.TheRoleofDonorsKenya has been amagnet formanydonors. Inrecent years support has however fluctuatedduetocorruptionscandalsandshiftingrelationswith parties in office. The government alsoincreasedfocusoncontrollingdonorsupportfornon-publicorganizationsorprogrammes.Manydonors are working within each service sectorandarealsogenerallysupportingprivatesectordevelopmentandespeciallySMEdevelopment.TotalODAcommitmentsinKenyareachedtheirmaximumin2010andhasbeendecliningsincethen.Theenergysectorhasbeenreceivingthemost support recently, compared to educationandWASH.SupplybyNGOsandOtherActorsAcross the four sectors there are and havetraditionallybeenmanynon-publicstakeholdersinvolvedinBoPserviceprovision.Privateprovidersrangefromamultitudeofinformalmarketplayerswithsmall-scaleoperationsandinsomecases(e.g.in slum areas) larger-scale informal operations. These span all sectors including informal schools,makeshifthealthclinicsortraditionalmedicineprovidersandinformalwatervendors.TheseinformalmarketsplayanimportantroleforBoPserviceprovision,butarenotseenasSEsandarerarelyscalableventures.Besidethe informalsectormanyprivatecompaniesareprovidingaffordableservices, for

735

1,200

1,561

1,293

1,760

2,420

2,0951,971

1,741

2005 2006 2007 2008 2009 2010 2011 2012 2013Education WASH Energy Total ODA

Figure 4. Kenya ODA commitments, million USD (Source: OECD statistics)

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examplelowcostschools,sanitationproductsandservices,lowcosthealthfacilitiesetc.Faith-basedorganizations and a large number of NGO’s and community organizations add to the complexlandscapeofnon-stateserviceprovidersinKenya.SupplybySEsAccording to several respondents, the term social entrepreneurship has ‘arrived after the fact inKenya.’ They reference the strong tradition for faith-based organizations and different types ofcommunitybasedorganizations,whichcombineastrongsocialmissionwithrevenue-basedmodels.Charter schools and faith-based health clinics are examples of long-standing service deliverymechanismsfortheBoPdrivenbysocialaspirations.Theunderlyingideaishencerootedinsociety,butnotcoinedassocialentrepreneurship.AsaregionalhubKenyaandNairobiisoftenchosenasastartingpointforventureswithEastAfricanambitions or for regional events (e.g. SEED award). There is a large and growing internationalcommunityofSEsinKenya.ThiscorecircleofSEshasastrongSEidentityandhasclosetiesintotheinternationalcircuitofSEstakeholders.ThelocalperceptionoftheSEtermvariesandisnotusedfrequently.IfpresentedwiththeconceptanaverageKenyanoftenequatesitwithanNGOtypeorganization,whichisnotalwaysfavourableinacountrywith strongbusiness and career focus. A respondent supporting SEs said organizations heworkedwithrarelyusetheterm,butidentifythemselvesassuchwhenheexplainstheconceptandsometimes also express gratitude for being recognized as something distinct. Several respondentsemphasizedthatKenyanswith‘goodideasandvalues’missdonor-fundingbecausetheyarefocusedon‘sales,sales,sales’ratherthanSE-branding.Forsomelocalstakeholdersthesolutionissupportingtheseventuresonmessaging,whileotherssawthetermasanewforeignconceptbeingimposedonKenyans.AgrowingnumberofSEeducationprogrammesaredrivinglocalSEawarenessamongyoungprofessionalsenteringthejobmarket.ThiswilllikelyaffecttheKenyanSEsceneinthecomingsyearswithmoreKenyanbredventures.Regardless of terminology, there is awide variety of SEs in Kenya,whichmakes Kenya by far thecountryinEastAfricawiththemostdevelopedSElandscape.UntilrecentlytherewerenumerousSEs,butstillfewexamplesofscaledmodels(beyondFBOs).Recently,SEssuchasBridgeInternational,M-Kopa,DLight,Tunzahealthclinicsare,inthewordsofarespondent:“movingfromadropinthewatertoasplash”.CommonfortheseSEsarethattheyhavereachedeconomiesofscale,whichcanjustifylowmargins.Severalquoterecruitmentofhigh-levelbusinesspeopleintotheseSEsasdrivingfactorsfortheirsuccess.Besidesthenotableexceptions,thevastmajorityofSEsaresmallandfacechallengesscalinganddevelopingsustainablemodels.Table2.MaintypesofSEsinKenyaTypeofSE DescriptionLocalbusinessSE

A number of often small locally based companies serve BoP communities inKenya.Theseareregardedasnormalprivateentities,butconstituteagreyzoneforSEactivity.Anumberofthesecompaniesaredrivenbyrespectedcommunitymembers,whichfeelastrongsocialcommitmenttotheirclientsandlargelymeettheSEdefinition.Byofferingstep-wisepayment,informaltieredpricing,in-kindpaymentsorfreeservicesforthepoorest,theyplayanimportantroleinserviceprovisionforthelocalBoP,butrarelyself-identifyasSEs.

BornSEs A new breed of SEs have emerged in recent years, which embrace the SEterminology. Many of these are founded or operated by expats. Some aresubsidiaries of international NGOs, while others have been started by fresh

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graduatesfromprestigiouseducationaleducationsorbyseasonedprofessionalswhohavetradedintheircorporatecareer.Agrowingadditiontothisgrouparetech-SEs.Kenya’sgrowingtech-sceneemanatingfromIhUbandotherincubatorshavegeneratedanumberofSEsthatareleveragingtechnologytoimproveBoPservice delivery in different ways. The SEs range from low-cost patientmanagement,paymentsystems,awarenessraising,andtele-health.Somearebusinesses,whileotheroperateasNGOs.

MNCspin-offSEs

BigorganizationssuchasTotal,Philips,andGrundfosareallowingintrapreneursto develop BoP units with social ambitions and more patient capital returnrequirements.PhilipsforexamplesellssolarsystemsandcookstovesinKenyaandhasbaseditsPan-AfricanAfricaInnovationHubinNairobi,whichworksonaffordableinnovationswithinhealthandenergy.TheseSEtypeunitscandrawon themuscles of the large organization, but are to varying degrees able toinnovatetheirbusinessmodelsandofferingstosuitBoPneeds.

Faith-basedSEs Faith-basedorganizationsareprevalentespeciallywithinhealthandeducation,wheretheyareimportantplayersinthesectors.

TraditionalNGOSEs

A growing number of NGOs are either developed as SEs or develop SEsubsidiaries.Forsomethedwindlingdonorfundingseemstobeapushfactors,while others quote a general shift in development thinking towards moresustainableandrevenuedrivenmodels.5

Community-basedorganizationsandcooperatives

WithinagricultureandtourisminKenyacommunity-basedSEsandcooperativesplay a significant role.Within themore service-focused sectors in this study,thesemodelsarelessprevalent.Inthewater-sector,community-basedmodels,whichhaveSEelements,canbefound.

ThereareSEsacrossthefoursectorsandacrossthevaluechainsineachsector,withslightlyfewerSEsinwaterandsanitation.ComparedtotheothercountriesinthestudyKenyaisfaraheadonthelevelofSEdevelopmentacrossthesectors.Table3.SEactivitylevelandexamplesinKenyaacrossthefoursectors Health Waterandsanitation Energy Education

SEactivitylevel

SEexample

BusinessAreaTunzaKenya,launchedin2008,isasocialfranchiseinitiatedbyPopulationServicesInternational/Kenya(ahealthmarketingcompany).Tunzapartnerswithselect

BusinessAreaEcotactisaSEanddevelopedtheIkotoilet.Ikotoiletsofferwell-maintainedbathroomfacilities,sinkswithcleanwaterandsoap,showersandtoilets.Apartfromthetoilets,thebuildings

BusinessAreaEnvirofitKenyaprovidessmokelesscookingstoves(thestovesareinsulatedtoavoidsmoking).Thestovesareefficient:theysavefuel,allowtocook

BusinessAreaEducate!focusesondeliveringleadershipandentrepreneurshiptrainingtosecondaryschoolpupils.Italsoprovidesamentorfocusedon

5SomeNGOshavedevelopedrevenuesources,whicharedecoupledfromtheiroperations(hotels,etc.).ThesearenotseenasSEs.RedCross,forexample,operateshotelsinKenya.

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privatehealthprovidersacrossKenyawhichtheysupportandcertifyforcertainservices.Type:Tunzaisanetworkofprivateclinics.

alsohouseotherfacilities,suchasconveniencestores,moneytransfershops,etc.Theservicehasreachedmorethan10millionpeoplesinceitscreation.Type:Thecompanywasfoundedin2006andisafor-profitenterprise.

faster,andreducetoxicemissions.ThecostofstovesrangesfromKES200to4,000,andcustomerspayinfull.200peoplehaveaccessedtheservicesofar.Envirofitplanstoinstall1,000stovesinKenyabytheendof2015.TypeEnvirofitisafor-profitinternationalorganizationestablishedin2003.

practicalissuesanddeliverstrainingonhowtostartabusiness.Thecompanyistryingtointegrateitsmodelintothepubliceducationsystem.TypeEducate!isanot-for-profit,non-governmentalorganization.

Social Enterprise Ecosystem POLICYANDREGULATIONPolicystrategyThereislittlepolicyrecognitionofSEsoruseofSEterminologyamongpolicymakersinKenya.Faith-basedorganizationsorventuressuchasMKopaarerecognizedfortheirimpact,butarenotseenasaparticulartypeofentitywithasharedDNA.Recently,theUS-basedGlobalEntrepreneurshipSummit6washostedinKenyainJuly2015.TheeventhadPresidentObamaasakeynotespeakerandmanySEfocused themes on the agenda. Several local stakeholders say the event was helpful in terms ofpositioning the SE agenda towardspolicymakers.Whether thiswill translate into increasedpolicyattentionremainstobeseen.Kenya isanentrepreneurialsocietywithpolicyattentiontowardsSMEsandprivatesector.Despitelittle formal SE focus, the general positive attitude towards the private sector creates a positiveenablingenvironmentforSEs.Theprivatesectorisrecognizedasan‘engineofgrowth’(forexampleinKenya’sVision2030)andthereisgeneralopennesstowardsengagementwiththeprivatesector.The approach towards the private sector varies across sectors and issues. In some areas thegovernmentsprefersahands-offapproach.Anenergyexpertnotedthatthegovernmentwashesitanttocreatestandardsonsolarproducts,butagreedtodosoafterthemarkethadmaturedonitsown.Inotherareas,ithasbeenmorehands-on,forexampleallocating30percentofprocurementbudgetsforyouthentrepreneurs,SME’s,women,andotherdisadvantagedgroups (2013).The regulation iscreating a government push to support particular types of business, but is facing implementationchallenges,sincemanytargetedcompanieshavelittlecapacityorexperienceonpublictenders.ForSEsinthissegmenttheregulationisnaturallyabigopportunity.Fromapolicyperspective,itisalsoan

6www.ges2015.org

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interestingexampleofthestrengthandweaknessesofprocurementasapotentialpolicytoolforSEpromotion.Kenya’s new constitution from 2010 brought about a number of changes, including an ambitiousdevolution process to enhance local governance, efficiency, and accountability. Elections in 2013markedthelaunchofdecentralizationas47newcountygovernorsandcountyassembliesandstartedthe challenging task of setting up new institutions. For SEs, devolutionmeans several sectors areundergoinglargestructuralchanges,whichinfluencepublicserviceprovisionandfunding.ForsomeSEscountiescanbecomean importantentrypoint forpartnerships.Health isasector impactedbydevolution,whichisfacingsignificantimplementationchallenges,includingaflightofkeyhealthcarepersonneloutofthecountryorawayfrompublicfacilities.HeresomeSEssaythatthechallengesinthepublicsectorhaveincreasedthedemandfortheirservices.RegulationThereisnospecificregistrationformforSEs.SEsregisteramonganythingsascompaniesornot-forprofitswherecategories includeNGOs,companies limitedbyguarantee,societies,andtrusts.MostSEsareeitherregisteredascompaniesorNGOs.SEsthatareregisteredasNGOsbenefitfromdifferentforms of tax exemptions through the Non-Governmental Organizations Coordination Act No. 19(1990), Non-Governmental Organizations Coordination Regulations (1992), and the NGOs Code ofConduct(1995).KenyahasbeenintheprocessofreplacingitsNGOActwithanewPublicBenefitOrganizationsAct2013(PBOAct).TheambitionwiththePBOActwastocreateanewcoherentlegal,regulatory,andinstitutional framework fornon-profit organizations. Theact focuseson issues suchas registrationforms,governance,andcoordinationmechanismsfornon-publicstakeholders.Theactalsoincludeshybridformsoforganizationsandrevenuegeneration,whichwouldberelevantforanumberofSEs.SEswouldalsobenefitfromincentivessuchasincometaxexemptiondonationsorgrants,preferentialtreatmentforvalue-addedtax(VAT),andanexemptiononcustomsdutiesforcertainimportedgoodsorservices.ParliamentpassedthePBOActinDecember2012andthePresidentapproveditinJanuary2013,butadateforitsimplementationhasnotyetbeenset.Theacthasbeensubjecttodebateamonglocalandinternationalorganizations,oneissuebeingacaponinternationalfundingfororganizationsinKenya.Therearehoweveralsoclearimprovements,whichmeanmanycivilsocietyactorsareinfavouroftheactandcallforitsimplementation.CivilsocietyhashelddifferenteventsandlobbiedforadjustmentsintheAct,whileSEsnotablyhavenotbeenpartoftheprocess.Asofnowtheactaccordingtoexpertsintervieweddoesnotseemtobemovingforward,themainreasonquotedislackofpriorityfromthecurrentadministration.Table4.LawsandtheirrelevancetoSEsinKenyaLaw SErelevanceCompaniesAct(Chapter486,LawsofKenya)

Regulates for-profitSEswithasocial impactasCompanies limitedbyguaranteeandnothavingsharecapital.

NGOAct TheNon-GovernmentalOrganizationsCoordinationActNo.19(1990)complemented with the Non-Governmental OrganizationsCoordinationRegulations(1992)andtheNGOsCodeofConduct(1995)regulate SEs registered as non-profits (might be replaced by PublicBenefitOrganizationsAct(2013)

Trustees(PerpetualSuccession)ActChapter

Regulatesnon-profitsregisteredastruststhroughincorporation.

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164oftheLawsofKenya[1981]CooperativeSocietiesAct(Amended)2004,No.12of1997

Regulatesnon-profitsregisteredascooperativesocietiesandUnions.

DepartmentofSocialServices

Regulates non-profits registered as Self-HelpGroups andCommunityBased-Organizations.

Public-privatecollaborationPPPhavebeendevelopedformanyyearsinKenya,mostarewithintelecom,energy,andinfrastructuresuchasportsandrailway.KenyahasgenerallyenhancedPPPsperformanceinthepastyears.In2009,PPP guidelineswere developed, and a new PPP Act followed in 2013. Prior to this, projectswereawarded based on general law and laws governing public procurement.7 The new act provides ageneral framework forprivate investment forall contractingagencies.Thiscomprehensive lawhasintegratedPPPsonastrategiclevelinprivatesectordevelopmentstrategiesandimprovedenablingconditions.AbenchmarkcommissionedbytheWorldBankplacesKenyawithinthetopthreeintheregionforPPPreadiness.8Expertinterviewshoweverindicatethattherehasbeena‘timeout’inPPPswithinthelastyear,especiallywithinenergy.Onereasonbeingapushforincreasedpowergenerationthatrequiresthegovernmenttore-evaluateenergyneeds.ForSEsintheBoPservicesector,thelargePPPsarerarelyrelevant,buttheframeworkderivedfromthesecouldexpandtomoreservicerelatedPPPs.PublicpartnershipwithprivatewatersuppliersinUgandaisaninterestingcase.The public sector also collaborates with different civil society organizations to improve serviceprovision. A health expert for example mentioned reproductive health as an area, where thegovernmenthasenteredintostrategicpartnershipsfortrainingofmedicalpersonnelandimprovinghealthsystemcapacity.Partnershipshavealsobeenevident in implementationofhealth insuranceschemes,suchasthedeliveryreimbursementschemeimplementedbyGIZ,MinistryofHealth,andDeloitte&Toucheamongothers.Atthe local level, thegovernmenthasalsoworkedwithNGOs inupscalingaccesstohealthservices.FINANCINGGrantfundingWhile many grant bodies are present in Kenya, many look for ventures with impact, rather thanventureswith an explicit socialmission andmany are SME focused. Thismeans they are often SErelevant,butnotSEdefined.Despitetherangeofgrantmakinginstitutions,many,especiallylocalSEs,donotusethem.Severalexpertsobservethatmostofthefundsareurban-basedandoftenunknowntolocalSEs.Theyalsorequirecapacitytodevelopapplications,reportingandimpactmeasurement,andfavourprovencases.AmonginternationalfoundedSEsgrants,mosthavestartedtheirbusinessororganizationswithsometypeofgrantfunding.Thetablebelowprovidesafewexamples,butmanymoreexist.Table5.ExamplesofgrantfundinginKenyaGrant FocusGrassrootsBusinessFund

TheGrassrootsBusinessFundisanon-profitbasedinWashington,DCwithfieldofficesinKenyathatbuildsandsupporthigh-impactenterprises.9

7PPPKnowledgeLab.https://pppknowledgelab.org/countries/kenya.8TheEconomistIntelligenceUnit.2015.Evaluatingtheenvironmentforpublic-privatepartnershipsinAfrica:The2015Infrascope.London.https://www.eiu.com/public/topical_report.aspx?campaignid=AfricaInfrascope2015.9http://www.gbfund.org

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GroFinFund GroFinFundisapioneeringdevelopmentfinancierspecializedinfinancingandsupportingsmallandgrowingbusinesses (SGBs)acrossAfricaandtheMiddleEast.GroFinleveragespatientcapitalandspecializedbusinesssupporttogrowemergingmarketenterprises.10

InReturnEastAfrica

InReturnEastAfricainvestsinSMEsinKenya,UgandaandTanzania.Thefocusis equity investments in growth companies. InReturn takes a hands-onapproach,providingmanagementsupport.Thetargetismarket-relatedreturnsaswellassocialimpact.11

AfricaChallengeEnterpriseFund(AECF)

AfricaChallengeEnterpriseFund(AECF)awardsgrantsandrepayablegrantstoprivate sector companies to support innovative business ideas in agriculture,agribusiness, renewable energy, adaptation to climate change and access toinformation and financial services. Its purpose is to improve incomes ofsmallholderfarmersandtheruralpoor.AECFhas itsheadquarters inNairobi,Kenya.12

EnablisEastAfrica

Enablis East Africa trains and support entrepreneurs in Kenya, Rwanda andTanzaniatogrowtheirsmallandmediumbusinesses.Ithasanactivenetworkof close to 1,600 members who develop their competencies through peersupportandcoaching.Asaglobalnetwork,theKenyanentrepreneurscanalsoexchangebestpracticeswithmembersacrosstheworld.13

Foundations Foundations play a significant role providing funding for SEs in Kenya.Foundations supporting SEs in Kenya include most of the large globaldevelopment focused foundation. While some foundations only fund non-profits, others are able to applymore flexible funding strategies than donordrivengrantsandexplicitlylookforinnovativesolutions.Thesectorprofileslistkeyfoundationssupportingthesectors.

CommercialfundingKenyanbanksaregenerallymorewillingtolendthantheirregionalpeers,butremainveryriskadversetowardsearlystageentrepreneurs.Demandforhighcollateral(sometimeshigherthan100percent)is a significant challenge for SEs.High interest rates also hamper SE financing options. Rates haveincreased from a high starting point of 12.5 percent in 2004 to 17.3 percent in 2013. Several SEsinterviewedmention18-20percentasnormalrates.Therearesomeinnovativedevelopmentssuchasseasonalschemesforfarmersetc.,buttheseonlycoverasmallpartofthefundinggap.Thehighratesand requirementsmeans bank financing in practice is out of reach formany SEs. SEs also expressfrustrationthatbanksdonotunderstandtheirfinancialstructureandSEbusinessmodels.Besidesbanks,SACCOsandChamasplayanimportantrole.SACCOsarecooperativesavingsgroupsandareimportantforagriculturalSEsandinsomecasesforend-userfinancing,butnotverycommonforservicebasedSEs.Chamasareinformallendingassociations.Chamasstartedaswomens’groupswithmerry-go-roundsavingsandloansschemes.However,theyhavegrownconsiderablyandusedwidelyacrossKenyaasinvestmentgroupsbydifferenttiersofsociety.Thereareexampleofwhichareset-uptofundentrepreneursone-by-one.MostChamasarehoweverrisk-adverseandcurrentlyrarelyinvestinSEs.

10http://www.grofin.com/contact-us/grofin-offices/grofin-kenya.aspx11http://b-analytics.net/directory/funds/inreturn-east-africa-fund-i12http://www.aecfafrica.org13http://eastafrica.enablis.org/about-us/our-background.aspx#.VZZnB_mqqko

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Chama models are nevertheless interesting vehicles for group saving and loans, which could beleveragedbynetworksofSEs.KenyaisbyfartheEastAfricancountrywiththehighestlevelofimpactinvestmentactivity.Despitethisfact,theyrepresentasmall,butgrowingpartoftheinvestmentlandscape.Accordingtoarecentstudy,atleast136impactcapitalvehiclesareactiveinKenya,managedby95impactinvestors.14MostimpactinvestorsinKenyaworkinanumberofcountries,butatleastUSDUSD240millionhasbeencommitted to Kenyan investments. Besides these funds, USD USD 2.5 billion is committed to theregion. Based on history of deal flows, Kenya is good at attracting this regional capital. 15 Impactinvestorsprimarilyfocusonfinancialservicesandagriculture,butarealsointerestedinservicesectors.AccordingtoOpenCapitalAdvisor,34areinterestedineducation,43inenergy,37inhealth,and20in water and sanitation. Interest does however not equal actual deals. Energy and education aresectorswithhighinterest,butfewdealsimplythatinvestorsarefindingithardtoplacetheirmoney.For SEs in this sector, the disconnection is a signal of potential, but also shows the challenges onmatchingrequirementswithSEbusinessmodels.InterviewedexpertshavemixedopinionsontherelevanceofimpactinvestorsforSEsinKenya.Manyimpact investors struggle to find deals.Oneproblemmentioned is thatmost impact investors areNairobi-focusedandmissopportunitiesinotherspartsofKenya.Severalinterviewedalsosaythattheinvestorslookforreturnsthatrarelyfitthefinancialperformanceofventuresbalancingprofitsandsocialgains.ManySEsareneitherabletomeettheformalrequirementsforfinancialtransparencyandpresentationofbusinessplansthatimpactinvestorsdemand.FinancialadvisorssuchasOpenCapitalAdvisorsandothersareprovidingimportantbrokeringroles,wheretheyidentifyopportunitiesandsupportSESwithtechnicalsupport.Box1.ExampleofimpactinvestmentMiliki Afya’s opened in 2013 and is an affordable health clinic serving a low-income suburb ofNairobi.OpenCapitaladvisorssupportedthefounderDr.Mureithi,whohasdeepmedicalexpertise,but littleexperiencedevelopingbusinessplansandoperationalmodelsfor low-costservices.Keychallengeswerehighupfrontinvestmentscostsandlowmargins.OpenCapitaladvisorshelpedbuildabusinesscaseandlinktheventurewithinvestors.16OpenCapitaladvisorsarealsolinkedtoThePartneringtoAccelerateEntrepreneurship(PACE).ItisaUS-AIDprogrammewithafocusonhelpingentrepreneursbridgethepioneergapwithearlystageinvestments.Theprogrammeworksinpartnershipwithover20incubators,accelerators,andseed-stage impact investors.Sixpublic-privatepartnershipshavebeenformedwhich leverageUSD56millionincombinedpublicandprivateinvestmentsoverfiveyears.InEastAfrica,theprogrammehas formedapartnershipwithOpenCapitalAdvisorsand four impact investors.ThepartnershipcombinestechnicalassistancewithearlyinvestmentinKenya,Tanzania,Rwanda,andUganda.Theprogrammescreens’60venturesandwillselects15whoreceivehigh-touchsupportfortwoyears.17Consumerfinance

14TheGlobalImpactInvestingNetwork.2015.ThelandscapeforimpactinvestinginEastAfrica.NewYork.https://thegiin.org/knowledge/publication/the-landscape-for-impact-investing-in-east-africa.15TheGlobalImpactInvestingNetwork.2015.ThelandscapeforimpactinvestinginEastAfrica.NewYork.https://thegiin.org/knowledge/publication/the-landscape-for-impact-investing-in-east-africa.16www.milikiafya.co.ke17www.usaid.gov/PACE

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Generally,manyconsumer-financingmodelsarebeingdevelopedandtestedinKenya.ForSEsinothercountriestheseexperiencesarehighlyvaluable.Withineducation,publicandprivatescholarshipsandloanschemes forBoParean integralenabler,but innowaysmeetsdemand.TheWorldBankhastestedvouchermodels(seeeducationprofile)andorganizationssuchasVittana18andmanyothersare linkingglobalonlinecrowd fundingwith individual students.Due to thematuremobilemoneysector,Kenyaisnaturallyanearlyadopterformobile-basedfinancingschemes.Therapidlydevelopingpay-as-you-gomarketforBoPenergyproductsisoneofthemostinterestingexamplesoffinancingcatalysingBoPaccess.19Beyondthemorenovelsolutions,itisworthnotingthatmanylocalSEssupportaccess through pragmatic and informal solutions, where the poorest clients pay through in-kindtransactions,ininstalmentsorarecross-subsidised.INFRASTRUCTUREANDHUMANCAPITALInfrastructureKenya is investing heavily in infrastructure, but still has large gaps that affect SEs. The maininfrastructure challenge SEs quote are low access to electricity, especially in rural areas. Urbanchallenges however also exist. One SE in Kibera invested heavily in water systems for large-scaledistribution, but was not able to operate due to irregular power provision. They faced closing ordevelopingcostlypowersolutions.AsnotedacoreinfrastructuredriverforSEsismobilepenetrationandthematuremarketformobilebanking,whichhasdrivenfinancialinclusionfortheBoP.Kenyaisaregionaltech-hubandmanytech-basedSEsareleveragingtheseopportunitiestodevelopmentmanagementsystems,awarenessandpreventionschemesandpaymentmodels.AccordingtoSEsinterviewed,thisdevelopmentisstrongandwillovertimepushinnovationinKenya,butshouldnotbeoverestimated.Manytech-basedSEsarestrugglingwithclientadaptation.OneEd-techSEsaidmostteacherswerecomputerilliterate,butthatthemainchallengewasgovernmentofficialsthatwerenotabletodriveimplementationduetoverylowtechnicalskillsandunderstandingofnewopportunities.SkilledstaffRemarkable amounts of international staff in Kenyan SEs have degrees from prestigious globaluniversities.Nairobiisattractingmanygraduatesthatwanttoleveragetheirskillstocreateimpact.Whilesomestickaroundanddevelopinnovativeventures,manydonothavethepatience.Inarecentarticlecharacterisingthe‘Do-good-startupsofNairobi’anSEexplained,“Therearetonsof23-year-olds fromBrown,and they’ll beback in theU.S. in 18months.” 20On theKenyan side SEs are lessattractive.EachyearmanyskilledgraduatesjointheworkforceinKenya.ThismeansSEsinprinciplecandrawonasolidtalentpool,withgoodentrepreneurialmind-sets.Nevertheless,manySEsfindlocalrecruitmentachallenge,especiallyseniorandmiddle levelstaff.SEsarerarelyabletocompeteonwageswiththeprivatesectororinternationalNGO.Asonerespondentsaid:“IwasofferedajobatanSEandseriouslyconsideredit,butmywifealsowantstobetakenoutfordinner.Ichooseajobataninternational NGO.” Some Kenyan SEs with external funding from grants or investors can paycompetitively, but themajoritymentionwage levels as a problem. Graduatesmight use SEs as astepping-stone,butquicklymoveontobetterpayingjobs.Kenyans are generally career minded and link SEs with the NGO sector or small-scale businessactivities.Theyoftenprefertojoinmoresecureandwell-knowncompanies.FormanyKenyansacore 18http://vittana.org/19Therearemanystudiesonthetopic,onerecentis:LightingGlobal.2015.Off-gridPowerandConnectivity,Pay-as-you-gofinancinganddigitalsupplychainsforpico-solar.Berkeley.https://rael.berkeley.edu/wp-content/uploads/2015/05/LG-2015-PAYG-Report-Alstone-etal.pdf.20KarenWeise.TheDo-GoodStartupsofNairobi.2014.www.bloomberg.com/bw/articles/2014-12-29/the-do-good-startups-of-nairobi

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driverisclimbingthesocialhierarchy,whichmeansaBoPventureislessaspirational.SeveralstaffatSEssaidtheirpeerswerecuriouswhytheywantedtojointhistypeoforganization–or‘workofallplaces in Kibera’ as one respondent said. Despite the general picture, there aremany passionateKenyansinSEsandthegrowingnumberofeducationalprogramswithanSEfocusarechangingtheSEperception.Several institutions inKenyahave introducedacademicprogrammes focusingonsocialentrepreneurshipatvariouslevelsandleadingthespaceinEastAfrica.TheEastAfricanANDEchapter(AspenNetworkofDevelopmentEntrepreneurs)isalsohostinganupcomingcareerfair,whereSEswillplayaprominentrole.TheseprogrammesareimportantdriversforlocalSEawarenessandattractionoflocaltalenttoSEs.Table6.ExamplesofSE-relevanttraininginKenyaExamples FocusTheUnitedStatesInternationalUniversity(USIU)

TheUnitedStatesInternationalUniversity(USIU)inNairobioffersaMasterofBusinessAdministrationProgramwithconcentrationinGlobalSocialSustainableEnterpriseatChandariaBusinessSchool.21

TangazaUniversityCollege

TangazaUniversityCollege,aconstituentcollegeoftheCatholicUniversityofEasternAfricaoffersaGlobalBusinessandSustainability-SocialEntrepreneurshipTrack.22

AmaniInstitute AmaniInstituteoffersaPostGraduateCertificateinSocialInnovationManagement.Thecourseisstructuredin3phases:Foundation,Immersion,andAcceleration.23

RiaraUniversity RiaraUniversityhasintroducedBusinessShortcourseinSocialEntrepreneurshipandInnovation.24

INFORMATIONANDNETWORKSCapacitybuildingNotsurprisingly,manyself-definedSEsutilisethesupportoptions,whileforexampleFBOsandNGOsbasedSEsreceivefunding,butrarelycapacitybuilding.ManyKenyanNGOsareinterestedincrossingintohybridmodels,enhancingsustainability,butverylittlesupportexistsforthese,andtheyareoftenstrugglingwithlackofbusinessskillsandorganizationalbarriers.Donors, foundations, universities and private companies, including SEs, provide capacity building.Therearemanyoverlapsbetweenfundingschemesandcapacitybuilding,includinggrantslinkedwithtechnicalsupport,impactinvestorssupportingSEstechnically,acceleratorsandincubatorslinkedwithfinancing.Belowareexamples,butmanyotherexists.Box2.Capacitybuildingexamples• Jomo Kenyatta University’s UniBRAIN (Universities, Business and Research in Agricultural

Innovation) is involvedinthedevelopmentandimplementationofcollaborativeprogrammesbetweenuniversities,researchinstitutionsandtheprivatesectorwhichfosterinnovation.25

• Centre forEntrepreneurship (CE)atKCAUniversity,established in2009, servesasa centralresourcefordevelopingbusinessesandinvitestheparticipationofthosewhoseektodeveloptheirenterprisesinnewandinnovativeways.26

21http://www.usiu.ac.ke/index/images/downloads/brochures/MBA.pdf22http://ashokau.org/wp-content/uploads/2013/01/Brochure-MBA-GBS-SET-2013.pdf23http://amaniinstitute.org/programs/post-graduate-certificate-in-social-innovation-management 24http://www.riarauniversity.ac.ke/business-short-courses25http://www.riceforafrica.org/downloads/workshops/mechanization-ws/24.UniBRAIN_JKUAT.pdf26http://www.kca.ac.ke/#!centre-for-entrepreneurship/c1m2i

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• @iLabAfricaatStrathmoreUniversityisaCentreofExcellenceinICTInnovationandDevelop-mentandattractstechSEs.27

• @iBizAfrica atStrathmoreUniversity isbusiness incubatorwitha focuson ICTsolutionsandbusinessesthat‘workforthecommongoodinsociety’.28

• Chandaria Business Innovation and Incubation Centre at Kenyatta University has a broadfocus,butincludesSEventures.29

• iHub is an incubator that supports the development and prototyping of technologicalinnovation,manyofwhichhaveasocialimpactfocus.30

• KenyaClimateInnovationCentre(CIC)providesincubation,capacitybuildingservicesandfinancing to Kenyan entrepreneurs and new ventures that are developing innovativesolutionsinenergy,waterandagribusinesstoaddressclimatechangechallenges.31

• Nailabisastart-upacceleratorthatoffersa3-6monthentrepreneurshipprogramwithafocusongrowinginnovativetechnologydrivenideas.32

• Ashoka,thelargestnetworkofsocialentrepreneursworldwide,hasitsEastAfricaOfficein Nairobi.33 Ashoka is supporting many prominent Kenyan SEs through its fellowprogramme.

• TheAcumenFundalsohasitsEastAfricainNairobi,andhassupportedseveralscaledSEsinKenya.AcumenhasaTechnical support initiative forAfricanSEs,whichamongotherthingspartnerswithlargecorporationstosupportSEs.34

• GrowthAfricaisaconsultingcompanyfoundedin2000.Itshuboffersstart-upincubationandacceleration services, andalsooffers investment facilitation for start-upsandearlystageenterprises.ItsEastAfricaOfficeisbasedinNairobi,Kenya.35

• OpenCapitalAdvisorsenablesgrowth,investmentandinnovationacrossAfricabyhelpingrapidly growing enterprises prepare for and achieve growth while also formingpartnershipswithinvestorandmarketinnovators.36

ResearchandDataUntilrecently,theSEsectorinKenyawasnotsubjectofmuchresearch,especiallylocally.ThelastfewyearsthesectorhasseenariseininterestfromresearchersinKenyaandabroad.ThebibliographyincludesexamplesofpapersontheSEslandscapeinKenya,includingworkbyOverseasDevelopmentInstitutewhohaslookedatthesectorinKenya,especiallywithinhealthandagriculture.Theworkoffront-runnerSEenterprisessuchasmKopaandBridgehasbeensubjecttovariouscasestudiesandresearch, aswell as cross-cutting themes impacting SE such asmobile payments in Kenya. Sectordatabases on innovation such as Center for Education Innovation or healthmarketinnovations.orgoftenincludemanyKenyanexamples.

27http://www.ilabafrica.ac.ke/index.php/who-we-are/ilabafrica#sthash.53jKzx7c.dpuf28http://www.ilabafrica.ac.ke/index.php/who-we-are/ibizafrica#sthash.bTFjfJR3.dpuf29http://www.ku.ac.ke/chandaria-biic/index.php/about-us/mission-vision30http://www.ihub.co.ke31http://www.kenyacic.org32http://www.nailab.co.ke33http://eastafrica.ashoka.org/contact34http://acumen.org/blog/acumen-dow-and-unilever-support-social-enterprises-across-east-and-west-africa-through-technical-assistance-initiative/35http://growthafrica.com/contact-us36http://opencapitaladvisors.com/contact

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CoordinationandadvocacyThere are several networks and initiates emerging that are organizing SEs, but some have alsopreviouslyfailed.Atasectorlevel,mostnetworksandorganisationsSEsquoteasimportantfortheirworkarenon-SEspecific.Table7.ExamplesofSE-relevantnetworksinKenyaExamples DescriptionAspenNetworkofSocialEntrepreneurs(ANDE)

ANDE is a network organization supporting a diverse group of actorspromotingsmallandgrowingbusiness inEastAfrica(notSEspecific).TheEast Africa Chapter hosts quarterly meetings for members in Nairobi tosharebestpracticesandincludesanumberoforganizationswithSEfocus,whichmeansSErelevanttopicsareoftendiscussed.37

OneAcreFund OneAcreFundisanSEoperatinginBurundi,Kenya,RwandaandTanzania.It is very focused on agriculture, but also has an ambition to bring SEsbroadly together. It host regular happy hours in Nairobi with paneldiscussionsaimedatSEs.38

EastAfricaSocialEnterpriseNetwork(EASEN)

EASENisamembershiporganizationcommittedtothedevelopmentoftheSEsectorinEastAfrica.EASANhaspreviouslyhostedmanySEeventsandcompletedSEresearch,butisdormantcurrentlyduetolackoffunding.39

AssociationofMicrofinanceInstitutionsofKenya(AMFI)

AMFIisamemberInstitutionthatwasregisteredin1999underthesocietiesActbytheleadingMicrofinanceInstitutionsinKenyatobuildcapacityofthemicrofinanceindustryinKenya.AMFIpresentlyhas62memberinstitutionsservingmorethan6,500,000poorandmiddleclassfamilieswithfinancialservicesthroughoutthecountry.40

GlobalCompactnetworkKenya

ThelocalGlobalCompactnetworkinKenya(basedatKenyaAssociationofManufacturers)wasapartneroftheSEEDawardandhaveseveralSEtypecompaniesastheirmembers.TheirfocusismorebroadlyonCSR,buttheyalsoworkwithCSRinnovationasatheme,whichoftenhasSEties.

CONCLUSIONSANDRECOMMENDATIONSDespiteprogressmillionsofpoorfamiliesinKenyalackadequateeducation,energyprovision,waterandsanitationfacilitiesandhealthservices.Whiledevolutionaspirestoimprovetheseconditionsontheshorttermitiscreatingincreasedpressure,especiallyinthehealthsector.AlargeandgrowingnumberofSEsaretryingtotackledevelopmentchallengesinnewways.TheSElandscapeinKenyaisoneofthemostdevelopedinAfrica.Kenya’sstrongentrepreneurialculturecombinedwithitsstatusasaregionalhubfororganizationsandSEfocusedinitiativesareamongdriversforthisdevelopment.Acrossall foursectorsKenyahostssomeof themostscaledandpromisingSEventuresamongthesevencountriesstudied.AcrossthesectorsSEsexpresslittlepolicyrecognitiononthespecificroleofSEs,butgeneralopennesstowardengagingwithnon-publicactors.Manyregulatoryissuesareverysectorspecificandevenvaryacrossthesectorvaluechains.WhileSEsinearlychildhoodeducationforexamplehavefewregulatoryproblems,lowcostprimaryschoolsaremeetingnewlegislation,whichmightlimittheirpossibilitiestooperate significantly. Funding is similar across sectors,where SEs quotebank financing as amajor

37http://www.andeglobal.org/?page=EastAfrica38http://www.eventbrite.com/e/one-acre-fund-presents-accra-social-enterprise-happy-hour-tickets-1519776392139http://easenetwork.net40http://www.amfikenya.com

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bottleneck,butalsohaveasignificantamountofimpactinvestorsreadytoputmoneyintothemostpromisingventures.FurthersupportanddevelopmentoftheSEsectorcouldbeacceleratedby:

• SE education: themost efficient way to create a stronger local SE culture is to target theeducationalsystemandlinkexistingSEstocreatestrongrolemodels.Thisprocessisstarted,butcouldbefurthersupported.

• Policysupport:Devolutionisstrainingpublicdeliveryinseveralareas.Helpingthepoliticallevelthrough the devolution agenda to see how SEs can support service delivery locally is anopportunitytomitigatesomeofthesechallenges.

• LearnfromKenya:Fewcountrieshaveasmanyfailed+scaledSEattemptsasKenya.Bothareequallyimportanttolearnfrom.Therearelimitedinitiativestosystematicallyunderstandthedo’sanddon’tsofthedevelopmentofSEsinKenya.

REFERENCESChege,C.andGakure,R.(2010):“FactorsInfluencingtheDevelopmentofSocialEnterprises

inKenya.”OverseasDevelopmentInstitute(2014):“CaseStudiesofHealthandAgricultureSocialEnterprisesin

Kenya.”Hanley,L.M.,AlineMargauxWachner,TimWeiss(2015):“TakingthePulseofSocialEnterprise

LandscapeinDevelopingandEmergingeconomies.InsightsfromColombia,Mexico,KenyaandSouthAfrica.”

Panum,K.andHansen,M.W.(2014):“SuccessfulSocialEnterprisesinAfrica:CaseStudiesofSixSocialEnterprisesinKenya.”

OverseasDevelopmentInstitute:(2014):“SocialEnterprise:ConstraintsandOpportunities:EvidencefromVietnamandKenya.”

TheEconomistIntelligenceUnit(2015):“Evaluatingtheenvironmentforpublic-privatepartnershipsinAfrica:The2015Infrascope”,London

INTERVIEWSBettyMutua,RelationshipManager,OpportunityKenyaMFI,June23,2015CarlosChege,Founder,EASEN,June25,2015HaroldOmondiOmollo,NationalProgrammesCoordinator,YMCAKenya,June16,2015JimmyNjoroge,FormerMentor,IHUBIncubationHub,June24,2015MaryMwangi,RegionalChapterManager:EastAfrica,AspenNetworkofDevelopmentEntrepreneurs(ANDE)JoyceNgumba,DirectorofInnovationandLeadership,AkiliDada,June22,2015 Additionalsectorinterviewshavebeencompletedandfeedintothecountryprofile.