More often than not, Social Enterprises (SEs) need Technical Assistance (TA) to get investment ready before they can access capital to scale. The challenges social entrepreneurs face in developing countries are compounded by the lack of a support system to enable them to grow. TA not only creates this support system, by bringing many different stakeholders into the ecosystem, but also provides a third party perspective on risks inherent in the business. In this way, companies that provide TA to SEs as part of their corporate social responsibility efforts can truly create a long-lasting effect on their communities.
Funding TA is perhaps one of the main challenges that needs to be overcome. Most SEs operate on a shoe string budget and often struggle to make upfront payments for TA due to cash-flow constraints. While there are some pro-bono TA providers, a more sustainable option is clearly needed. This has paved the way for innovative models where CSR is no longer something done on the side but is incoroporated into business practices. Under such an initiative, the CSR arm of a Corporation can sponsor the TA and engage a few of their employees to help an SE become investment-ready.
East Bali Cashews (EBC) provides an excellent case study of how TA can help SEs reach their full business potential and increase impact. KKR partnered with IIX and Shujog in 2013 to provide TA to get EBC investment-ready by creating a business plan, implementing an investment structure that incorporated both debt and equity, and creating marketing materials and financial projections. As a result, EBC raised $900,000 from investors. The capital was used to scale production, expand their warehouse and build a second processing factory.
Since then, EBC has also opened an early learning center, offering children of the village in which it operates a first-time chance at pre-elementary school education and their mothers an opportunity to continue working without concern for childcare. In this way, TA strengthens the ecosystem around SEs – one that enables them to thrive and bring greater impact to their communities.