Impact entrepreneurship has reached a tipping point in MENA, with a critical mass of thriving early-stage businesses addressing pan-regional challenges in several key sectors.
This is a turnaround from a 2013 report on impact investment globally by JP Morgan and the Global Impact Investment Network called “Perspectives on Progress,” in which MENA was almost entirely absent. This means that the region is firmly on the radar of the increasing number of investors whose definition of returns from investment include positive social and environmental impact.
We can make such a bold assertion about the healthy state of impact entrepreneurship because we have been actively engaging with founders and other ecosystem players here for a number of years now.
In that time, we have witnessed a flourishing pan-regional impact scene emerge in lockstep with the generally positive trends in companies founded and investment raised. It certainly helps that purpose occupies an elevated position alongside profit in company mission statements as standard.
Five sectors stand out in particular and I describe them below with examples of impressive impact startups. Some sectors may surprise you for falling into the definition of impact at all, but examine the implications of mass adoption on financial wellbeing, for example, and it becomes apparent why their rise entails an impact for the region.
Fintech: Alternative Lending
The MENA region has the largest number of unbanked people globally, with 85% of transactions cash based. Fintech tools that are being built on top of pre-existing payments infrastructure are allowing a growing and youthful population to achieve financial independence and realize their aspirations. Companies that are having an impact include Khazna (Egypt), a salary-backed loan product that allows users to receive the earned part of their salary at any time throughout the month. Additionally, Kaoun (Tunisia) enables unbanked and underbanked individuals and businesses access to financial services through identification, payment and credit solutions.
Fintech: Democratizing Tools for Small Business
More reliable, available and efficient digital systems for businesses to set up and run themselves ultimately mean more stable access for marginalised populations to food, employment, materials and remittances. In particular, B2B and B2C solutions are being developed in the MENA region to facilitate the growth of e-commerce and e-payments. Madfouatkom (Jordan) is a real-time electronic bill presentment and payment (EBPP) solution that enables customers to make payments seamlessly and securely, online or via mobile. In addition to Madfouatkom, Fetchr (UAE) helps local merchants and global brands build, launch and grow profitable e-commerce businesses with an easy-to-use proprietary shipping and logistics solution, all without the need for a physical address.
Education and Job Creation
There is an increase in easy-to-use tools that are streamlining the hiring and training process, by making earning and learning opportunities accessible. Opportunities to learn in-demand skills and find employment more easily mean sometimes precarious livelihoods can be secured. Noon Academy (Saudi Arabia) specialises in making an educational, engaging and affordable social learning platform that allows students to learn from peers, compete with them and initiate live on-demand study groups while Kader (Jordan) is an online recruitment platform targeted towards blue-collar and fast-moving jobs.
Tools that improve the resilience of the planet with a focus on sustainable sourcing, sustainable food systems, and regenerative farming practices, are growing in demand. Bekia (Egypt) is an online marketplace for people to exchange household waste for essential goods and leverages technology to develop climate change solutions. Whilst SunBox (Palestine) provides renewable energy to communities through the sale and installation of batteries, solar panels, and inverters in the Middle East.
Health and Equity
Housing and food insecurity, social wellbeing and health issues have all been exacerbated by COVID. In this area there is perhaps the greatest shortfall in investment. Safe Space (UAE) is a provider of virtual workshops on mental wellness topics including work-life balance, mental resilience, and sleep improvement, done in collaboration with mental healthcare professionals. Additionally, Mother Being (Egypt) is the first FHE tech startup in Egypt and the MENA region providing reproductive and sexual health education and access to products and services in Arabic and English.
As you can see from the examples and in our report, The Promise of Impact Investing in MENA, innovators addressing challenges are not constrained to any specific location: they flourish wherever lived experience gives rise to a solution and a viable business. Importantly, many of these businesses have scaling potential, which is a key criterion for investor interest.
That interest does still have to be earned: there is a vital role for the ecosystem to play in making businesses investment ready and visible to investors on programmes such as Sustainability MENA.
However, the signs are certainly promising that impact businesses in MENA will attract an increasing share of global impact investing assets under management, which according to the Global Impact Investing Network, hit $715 billion in 2020.
About the author
Alicia Sornson is the Manager for Programs and Partnerships in the Middle East and North Africa (MENA) at Village Capital. As the Manager for Programs and Partnerships in the Middle East and North Africa (MENA), Alicia develops strategy and programs that find, train and support entrepreneurs solving problems in the region.
Alicia holds a MA in Conflict Analysis and Resolution from Sabanci University and a BA in International Studies from Susquehanna University.
by Mita Srinivasan
by Mita Srinivasan
by Mita Srinivasan
by Mita Srinivasan