Wharton Professor Katherine Klein recently traveled to Rwanda, a place she has visited many times. While there, she interviewed Julienne Oyler for an episode of the Dollars and Change podcast (Find more episodes here). Oyler is the co-founder and CEO of the African Entrepreneur Collective, which helps entrepreneurs, especially refugee entrepreneurs, in Rwanda, Kenya, and Ethiopia to grow, create jobs, and improve livelihoods. The organization is celebrating its 10th anniversary, and Oyler reflected on past accomplishments as well as the work that lies ahead. Listen to the podcast at the top of this page or read an edited transcript of the conversation below.
Katherine Klein: What is the African Entrepreneur Collective?
Julienne Oyler: We are an organization that supports micro, small, and medium enterprises across East Africa. We provide them with business development services, such as trainings on bookkeeping and other financial management. We offer them one-on-one consulting, so they can put these lessons into practice. Through our in-house investment fund, we offer financing so that these businesses can grow. Ultimately, our work is to help some of these tremendous entrepreneurs throughout Africa improve their lives, create jobs for others in their communities, and most importantly, be strong economic contributors to their communities.
Klein: You founded the African Entrepreneur Collective in 2012, and you have achieved remarkable growth. You have a team now of over 150 staff members across Rwanda, Ethiopia, and Kenya. Ninety-eight percent of them are locals and refugees. Congratulations on that growth.
Oyler: It is a job that keeps me excited every single day. We’re a really values-driven organization, and one of our core values is that all problems in Africa have solutions that already exist in Africa. This is what motivates us to go out into our communities and find entrepreneurs who know how to solve the most pressing problems in their communities through their own innovations, their goods, their services. What’s really exciting is to help people who know the solutions that are needed, to help them bring those ideas to market, get those ideas out to more people and in more places.
As you mentioned, we have over 150 staff spread out through 14 different program sites. The overwhelming majority are people who are also from those communities. Again, there’s no better person to help solve the problems that communities have than the people who live with those problems every single day.
Klein: Over these past 10 years, you’ve worked with 33,000 entrepreneurs. Sixty-seven percent of them are refugees, 58% are women, 60% are youth, 57% have little or no schooling, and 50% of these businesses have less than $500 in average monthly revenues. For many of us who are involved in business schools, when we think entrepreneurship, we’re thinking tech startups. We’re thinking Silicon Valley. We’re thinking the potential for angel investment and venture capital. These folks are starting with less, and still they’re achieving terrific results.
[As I just noted], 67% of your entrepreneurs are refugees, and I’m hoping you will paint a picture for us of where these refugees are living. What does a refugee camp look like in Rwanda?
“One of our core values is that all problems in Africa have solutions that already exist in Africa.”— Julienne Oyler
Oyler: When we started African Entrepreneur Collective, I had been previously living in Silicon Valley. It’s a place of bustling entrepreneurial spirit and innovation. When I first came to Africa and saw a bunch of entrepreneurs working in communities here, the first thing that came to my mind is that whether you’re in Silicon Valley, whether you’re in Kigali, or whether you’re in the Kakuma Refugee Camp in Kenya, entrepreneurs around the world are more alike than different. We have the same needs. We have the same struggles. We have the same recipes for success. We all need to identify a pressing problem. We need to learn our customers deeply. We need to solve that problem at the right price point. We need to pivot, try again, and we need to get others to believe in us. Entrepreneurs are more alike than different, but access to resources is drastically different, depending on where we are in the world.
When we think about refugee camps, the first thing that comes to my mind is not entrepreneurship. The first time that I went to a refugee camp, I thought, “Gosh, I’ve been driving on this road for the last four hours. The landscape is getting more and more rural.” The road was snaking through the forest, and I felt like I was going into the middle of nowhere. All of a sudden, this camp on a hill came into view. As we got closer and closer, I could see that these were thousands of small houses built into the hillside. And these houses are capped with corrugated metal roofs and white U.N. tarps. I realized that for the 20,000 people living in this place, this wasn’t the middle of nowhere. This was the center of everything.
When you walk through the streets of a refugee camp, these dirt roads that have people pushing past you, pushing bicycles, carrying wood and crates of tomatoes, where you have mobile money agents. You have people having lunch inside little restaurants. These camps are like any other neighborhood. It has a bustling economy, even though it has a lower dollar consumption. And what I found is that the driver of the economy in these camps – it’s not aid. It’s actually entrepreneurs. If we can help these small businesses better manage their finances, have access to better supplies, increase their sales, then these entrepreneurs are going to turn these refugee camps into communities that we would more recognize.
Klein: Where are the refugees in Rwanda coming from?
Oyler: Let me tell you a story of a woman named Angelique. Angelique is an entrepreneur we work with in the Kigeme Refugee Camp in Southern Rwanda. Angelique, her husband, and three children fled violence in the neighboring Democratic Republic of the Congo in 2012. Angelique and her family have been living in this refugee camp for 10 years now. She started a small shop with a small pile of vegetables. She had about $150 in personal savings, and with that she bought some dry goods, some grains, some toothpaste, and some vegetables because the monthly stipend she received from UNHCR and the World Food Programme didn’t cover her family’s monthly food costs. She had to do something to supplement her income.
When Angelique started working with AEC, we helped her understand even these small quantities of inventory, which ones sold faster, which ones had a higher profit margin, how to write down her sales and expenses, how to keep track of all of the people she sold to on credit so that she didn’t lose out on her money. Over the year that we worked with her, Angelique grew her monthly sales by 90%. She increased her profit by over 60%, and she hired two other employees. Now, Angelique’s family has three times as much money that they spend on food. Her kids eat meat. They now have better sources of protein. They all go to school. Angelique has also successfully repaid not one, but two loans that we gave her. Angelique is just one of 33,000 [entrepreneurs] we’re helping every day.
Klein: I love your very important message that these are, in many ways, entrepreneurs like most entrepreneurs around the world, solving entrepreneurial challenges. How do you screen entrepreneurs and decide who to work with?
Oyler: Staff members are always out in the market, sourcing for new businesses that we can work with. We do cohort intakes once or twice a year. The threshold for participation is actually quite low. We look for people who have already started something. It might be very, very small, or they might have operated for a number of months or years before we came, but we work with primarily existing businesses.
Somebody has had to take the risk, to have had to try something first, because we found that, at least for our program, it’s so much easier to work with someone who now starts to understand all of the things that they don’t know. Once they join the program, then we have a pretty scripted curriculum where people learn bookkeeping, inventory management, sales — anything that any business needs to know anywhere in the world and would find through either online courses or through other trainings that you would get in the community.
Before COVID, all of our training was in person. Many of the businesses that we’ve supported have very, very low literacy and numeracy. Some people don’t read or write in any language. We had to adapt our curriculum so that it was easily digestible by anyone, regardless of education level or prior experience. We found for us that the best way of doing that would be having our trainer sit with somebody in a classroom style, walk them through the exercises, and then follow up with them one-on-one throughout the week, in between classes.
When COVID happened, we had to pivot almost instantly. We knew that wherever this business was, they were a vital lifeline for goods and services into their communities. They now had to navigate these changing regulations, these disrupted supply chains. The first thing that we did is we called every person and said, “Do you have access to a smart device, a phone or a tablet? Can you watch videos? Or do you have only a feature phone, so we’ll have to do our trainings through phone calls?”
Only 25% of our entrepreneurs had access to a smart device. We knew that in order to reach the majority of people, we needed to figure out a way they could interact with our services via a phone. We partnered with a local company, and we started offering what is called interactive voice response (IVR). We translated all of our curriculum into 3- to 5-minute modules that we could send out as prerecorded voice mails. At the end, we would have a small, interactive quiz that was done through feature phones. They’re using their touchpad to answer multiple choice questions and fill out really small texts.
Klein: And you have found this works?
Oyler: Our businesses in refugee camps outperformed the other entrepreneurs we worked with in any other markets, which was absolutely phenomenal. After doing this for two years, we found that for really simple concepts, the IVR method worked just as well as in-person training. But when things got more complicated, nothing matched in-person. Now that we’re able to deliver some of our services back to pre-pandemic style, we’ve actually chosen a hybrid model.
“Entrepreneurs are more alike than different, but access to resources is drastically different, depending on where we are in the world.” — Julienne Oyler
Klein: Let’s talk a little bit about some of these results over these years. You have worked with 33,000 entrepreneurs. These folks have created more than 25,000 jobs. Many of them have received microloans, and the repayment rates are terrific at 97%. They have collectively generated more than US$50 million in revenue, with very strong survival rates of their businesses over time. How do you handle the microloan part of this process?
Oyler: That’s a great question and one that we get all of the time because there is so much hesitancy to provide financial services or to give loans in these refugee communities. There are so many misconceptions about refugees as being very transient, that it will be really hard to track your money once you give out a loan. When we started working in these communities, so many people cautioned us. They said, “Oh, refugee businesses don’t understand debt. They don’t understand investments. They only understand charity, so they will assume that the money you’ve given them is just a grant.” When we started, we needed to demonstrate at a significant size that refugee entrepreneurs understand this stuff, and with the right training and services, they can be just as investment-ready as anyone else.
First, we decided the only people who will be able to access our financing are participants in our training and consulting program. We’re not going to just give a loan to a business that we have never worked with. We want to make sure that they have the proper skills before taking on investments. We have loan officers and investment officers who conduct due diligence on these businesses, make sure that they really do what they say they’re doing, assess the character of the business-owner. We also make decisions based on cash flows, so we do cash flow-based lending. These loans are not collateralized. And we really talk with them because we’ve built a relationship with this business owner over three months, six months, nine months, to understand what their investment needs are.
Once we have that, we sit at investment committees and make decisions just like any other financial institution, and then show up occasionally throughout the month to see how things are going and maintain that open relationship with each of our borrowers. I think all of that has led to the significant repayment rates that we’re seeing in these communities where there’s very little other financing.
Klein: How big is a typical loan? And what are they using this funding for?
Oyler: We have quite a range. We give loans between $50 and $50,000. For a typical refugee loan, we start out fairly small, probably on the $500 to $600 range. We have a pretty short repayment period, usually around six months for your first loan, just so we can start to see your habits of repayment.
Almost all of those loans are used for either working capital or to buy some sort of asset to increase the capacity of the business. Many people purchase inventory, or they want to introduce new products. They might have cooking oil, but they want to sell olive oil. They might have a small manufacturing business, like they might do soap-making, so they need to purchase the containers that they’re selling their soap in. Or they might need to buy a mixing machine or a sewing machine. Many of them also want to purchase some sort of transport, either a motor bike or a small truck, so that they can save on those costs.
Klein: What’s next for the African Entrepreneur Collective?
Oyler: We’ve been doing this work for the last 10 years, but we’ve really focused on refugee businesses for the last five years. We’ve seen such a tremendous impact but also demand for our services. Right now, we work in three countries — Rwanda, Kenya, and we’ve recently launched in Ethiopia — and have tremendous ambitions to grow. Between now and 2030, we want to work with over half a million business, primarily refugees, and the surrounding host communities across eight countries on the continent, places that have a large number of refugees and internally displaced persons, but also ones where there’s movement towards more favorable refugee policies and where we really feel like our services are needed. We’re super excited to take this up to the next several levels.
“There’s no better person to help solve the problems that communities have than the people who live with those problems every single day.”— Julienne Oyler
Klein: I’d love you to talk about lessons learned. I hope you’ll touch on being an American, college-educated MBA, working in Africa, because there are plenty of folks who have really marvelous intentions but come abroad and don’t succeed to have the kind of impact that you’re having.
Oyler: I’ve been reflecting on this question quite a bit as this year is African Entrepreneur Collective’s 10th anniversary. Thinking about where we were 10 years ago versus today, it’s beyond what I ever could have imagined. Another one of our values here is that we push beyond what we think is possible. How do you do that? How do you look beyond what you think is possible when your thinking is your greatest limitation? You teach this in business schools around the world, right? One of the things that you have to do is surround yourself with people smarter than you are. That’s how AEC has grown to be where it is. It’s because I have surrounded myself with people smarter and more connected than I am.
All of our success is due to the team we have and their incredible dedication. To your point about being an American, a white woman, coming to Africa. I came with my own networks and my own skills that I’ve built through my own education and work experience. For me, surrounding myself with people smarter than I am, I had to shift to see who that target person was. It was people who had different skills. They were able to open up new networks, whether that be in refugee camps or in businesses in the capital city.
So, that’s one of the lessons learned, that we have to continue to stretch our minds. Who can help us achieve our goals? The second thing is that the level of humility that it takes is really important to note. Whether it’s me as the CEO, or whether it’s a business development advisor, we come into every person’s business and every community with a tremendous amount of humility because these are people who are trusting us with their livelihoods. I trust very few people with my livelihood, and to have some stranger come in and say, “Our advice is going to either help you increase the number of meals you eat a day, or not.” That requires a tremendous amount of humility and trust. That’s the basis of everything that we do. People have to trust us with their livelihoods, and we have to deliver, and that’s a lot of responsibility, and it takes a lot of humility.
Then the other thing that I’ve learned working here is that I think the communities across Rwanda, Kenya, and Ethiopia offer such incredible opportunities for growth, but they also offer such tremendous, complex, interwoven problems to be part of a really, really deep solution. For me, that’s intellectually stimulating, it’s exciting, and it also then pulls me back from thinking that there’s a one-size-fits-all or one-product-fits-all, because these are deeply connected and complicated markets. I feel like I am growing so much as an entrepreneur myself, just working here.