Eighty kilometers outside of Nairobi, the Patel family’s macadamia factory buzzes with activity. In 2016, Mehul and Chirag Patel founded macadamia processing business Rainsun Nuts; every year since, they’ve doubled their sales. Between their office in Nairobi and their factory in the rural town of Sagana, they’ve created jobs for dozens of people—the majority of whom are women, and many of whom are under 35.
But as their business grew, Mehul and Chirag struggled to keep up with a growing mountain of paperwork. Documentation of the business’ operations was all done by hand, and was scattered between their Nairobi office, their homes, and their factory. This was a growing problem for Rainsun Nuts. With their business-level information so dispersed, Mehul and Chirag couldn’t build out the cash-flow projections they needed to apply for a loan from Root Capital.
In a country where agriculture accounts for nearly a third of the GDP, how can we help rural businesses build compelling careers for young people?
Challenges like this aren’t unique to Rainsun Nuts. These days, most businesses digitize this kind of information to keep data organized, access it from anywhere, and analyze it quickly to inform business-level decisions. However, for rural enterprises juggling more pressing priorities—for example, having accessible cash to pay farmers on time for their harvests—developing that kind of system quickly falls by the wayside. Ironically, their short-term success makes it more difficult to build the systems that support long-term sustainability.
Enterprises like Rainsun Nuts need to succeed in the long term, because they’re the key to addressing a demographic crisis. Perceiving agriculture as difficult or unrewarding, millions of African youth migrate from their families’ farms in search of opportunities in cities or overseas. This journey is often perilous. When they arrive, jobs are scarce. The communities left behind also suffer as they lose hope for a better future with every young person that moves away.
Rainsun Nuts and other agricultural businesses break this cycle. When they succeed, they provide farmers with inputs and training that boost their yields, and connect them to international markets that offer higher prices. They create dynamic, creative, and higher-paying jobs for young professionals in rural areas. If we can help them grow, we can transform African agriculture—one community at a time.
Jebett Birir, a young financial professional who undertook a temporary placement at Rainsun Nuts as part of Root Capital’s talent partnership pilot.
Through our traditional financial advisory services, our experienced local staff run about two weeks of on-site trainings with our clients’ teams. But sometimes, businesses don’t need a short-term infusion of high-powered expertise. Many businesses we work with are better served by a longer-term engagement—a temporary staff member with the talent and drive to work side-by-side with permanent staff for months at a time. To that end, for the past two years Root Capital has piloted a “talent partnership” that pairs young professionals looking for varied job experiences, typically recent college graduates, with rural businesses seeking to address specific challenges.
With support from IKEA Foundation, The ELMA Growth Foundation, and Vitol Foundation, we partnered with Open Capital Advisors (OCA)—an Africa-based advisory firm committed to driving economic growth across Africa—to launch a talent partnership program in business management. We selected five young Kenyan analysts through the firm’s embedded talent practice Arcadia, to work for three- to six-month periods at businesses identified as potential candidates for Root Capital financing. These analysts work alongside business managers to establish sound accounting and financial practices that will improve the enterprise’s creditworthiness.
When we make space for young people to have meaningful roles in rural businesses, both they and the business benefit.
Initially, a few of the analysts reported minor challenges integrating themselves into the business. They reported that, while the leader of the business was well-briefed on their role, other staff members didn’t necessarily understand why they were there. This led to some initial skepticism from employees wary of an urban Kenyan coming in to “fix their business.”
Once she arrived at the offices, Rainsun’s analyst Jebett Birir worked directly with Mehul and Chirag to build an efficient system to gather, organize, and digitize business-level data—directly addressing a primary obstacle to the business’ growth. Other analysts worked on projects identified by Root Capital’s diagnostic as top priorities for their respective businesses, from improving financial reporting and accounting systems to reviewing and organizing alternative income streams for the enterprise.
Jebett with Linda Masaku, her colleague at Arcadia.
After participating in this partnership, all businesses reported that their analysts developed work plans that will help them strengthen their financial and information management systems. In turn, the analysts reported that the unique environment of an agricultural enterprise allowed them to take a more senior role in organizational decision making than they might have had in a comparable job in the city. Both parties benefit; the businesses work toward strengthening systems and processes and securing financing for their operations, and the analysts walk away with skills they can use in future roles.
But the project also speaks to a deeper impact. When rural African enterprises can remove the obstacles that hinder their growth, they can bring higher, more stable incomes to farmers and create dynamic, prosperous career paths for young professionals. In Kenya, a country where agriculture accounts for nearly a third of the GDP, a thriving agricultural sector will allow rural youth to have compelling careers in the countryside. After a successful first round, we’re excited to extend this partnership to an additional nine businesses in Kenya and Uganda this year.
And Rainsun Nuts? Thanks to the work plan their analyst developed, they were able to build out the cash flow projections required for their Root Capital credit application. Earlier this year, we approved the business’ first loan from Root Capital—a loan that means they can pay hardworking macadamia farmers in cash at the time of the harvest.
Photos © Open Capital Advisors / Arcadia and Root Capital
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