Wednesday, February 5, 2014

Five African startups receive Microsoft funding boost

Five African startups receive Microsoft funding boost.

Five startups from Nigeria, Kenya and Uganda have been awarded financial grants by software giant Microsoft through its 4Afrika Initiative.

The 4Afrika Initiative was launched by Microsoft last year to help Africa improve its global competitiveness and reach 2016 goals that aim to place tens of millions of smart devices in the hands of African youth and get everyone online.

The five startup companies to subsequently receive funding from Microsoft are access.mobile LLC from Uganda, two Nigerian companies Gamsole and Save & Buy, and Kenyan startups Africa 118 and Kytabu.

According to a statement from Microsoft, the companies have been selected based on the uniqueness and scalability of their solutions, their business models and the relevance of the key problems they are addressing.

The solutions and apps developed by the startups are relevant to consumers and the African market, ranging from agriculture, education and consumer, the statement reads.
The level of funding has not been revealed though.

"As part of the 4Afrika initiative, we are excited to be supporting startups that have developed innovative solutions that address key issues in Africa," said Amrote Abdella, director of startup engagement and Partnerships for 4Afrika.

Abdella added, "Our support is aimed to showcase the importance of local innovation, but, more important, it highlights the great potential that African innovators have in competing with world-class developers and entrepreneurs."

Microsoft also revealed that in addition to the grants it plans to provide technical support and mentorship to help the startups develop their businesses through the company’s ‘centre of expertise.’

Below is a brief description of the different startups:

* access.mobile LLC - A solution with a key focus in the agriculture and healthcare industries, giving enterprises the ability to collect, analyse and share clear, real-time information about their operations and supply chain activity.

* Africa 118 - A mobile directory services solution that helps bridge the information gap both for enterprises and consumers.

* Gamsole - A mobile game production company creating Windows games, with downloads topping more than 4 million.

* Kytabu - A textbook leasing application for low-cost tablets. Students can save more than 60 percent of their education cost by renting their textbooks on an hourly, weekly, monthly, school term or annual plan.

* Save & Buy - A Web and mobile platform that enables Nigerians to save toward the purchase of items conveniently and securely through e-commerce channels.

Banks Exploit Loophole in Forex Market

301112N.Euro,--Dollar-notes.jpg - 301112N.Euro,--Dollar-notes.jpgAmidst the spirited attempts of the Central Bank of Nigeria (CBN) to halt naira depreciation and bridge the widening gap between the official and parallel market rates, indications emerged at the weekend that some banks are already taking advantage of the inadequate supply of foreign exchange, especially the dollar, and are actually profiting from the unpleasant situation.
Apparently worried by the resurgence of parallel market activities, where a dollar was sold at N172 last Friday, as against the official rate of N160.30, the CBN last week promised to rise to the occasion by adjusting the prevailing policies in order to safeguard the economy in weeks ahead.
However, a wide spectrum of foreign exchange marketers who spoke with THISDAY at the weekend listed factors responsible for the growing disparity in the exchange rates to include deliberate hoarding of dollars by banks, who in most cases, compel desperate forex users to do the transactions through domiciliary accounts.

A foreign exchange dealer, who is also managing director of a bureau de change, disclosed that “The banks apart from frustrating the efforts of the CBN on forex transactions, they also flout them by either refusing to sell up to the required standard ($250,000) to BDCs, or by making it mandatory for the operators to purchase through domiciliary accounts to attract extra charges. This then exceeds the one percent maximum margin required by CBN.”
Under the existing policy, CBN sells $50,000 to each of the 3,500 licensed bureau de change nationwide every week, while banks are allowed to sell a maximum of $250,000 to BDC weekly.
But sources alleged that banks are capitalising on the supply shortage to charge beyond the one percent required by law, and subjecting BDC operators and other end-users to purchase the forex through domiciliary accounts for extra charges.
Tracing the current discrepancies on the part of banks to last year, a source said that banks were buying dollar at N157 from the CBN and sold to the BDCs at N167.50, a development that gave them a wide margin. The CBN was however said to have addressed this last year, when it insisted that no bank should sell their money above one percent margin.
BDCs’ sources however said the immediate response of banks to the apex bank’s intervention was to stop selling dollars openly.

Nigeria Central Bank releases framework for Mortgage Refinance Companies

The guidelines stipulate what is required to operate a MRC
The Central Bank of Nigeria has released a regulatory and supervisory framework for the operations of a Mortgage Refinance Company (MRC).
A Mortgage Refinance Company, according to the regulatory body, is a financial institution established to provide short-term liquidity and/or medium- to long-term funding or guarantees to mortgage loan originators.
The establishment of such company is primarily aimed at increasing the liquidity within the mortgage sub-sector and availability of mortgage credit in Nigeria, reduce mortgage and related costs, and make residential housing more affordable, the regulatory agency said.
The benefits of such mortgage liquidity facilities are well documented and globally acknowledged. As a financial institution, the MRC would be under the regulatory and supervisory purview of the Central Bank of Nigeria (CBN).
“The objectives of the MRC shall be to support mortgage originators such as Primary Mortgage Banks (PMBs) and commercial banks to increase mortgage lending by refinancing their mortgage loan portfolios. It shall act as an intermediary between originators of mortgage loans and capital market investors who typically are looking for long-dated high quality securities” the framework highlighted.

This regulatory framework, according to the Central Bank, is designed to ensure that the MRC operates in a safe and sound manner, on internationally accepted principles, standards and best practice in mortgage liquidity facilities.
The regulatory framework is drawn pursuant to the provisions of the Central Bank of Nigeria (CBN) Act 2007, Banks and Other Financial Institutions Act (BOFIA) CAP B3, Laws of the Federation of Nigeria (LFN) 2004, other relevant Laws, and extant CBN Guidelines and Circulars.
The framework prescribes the basic regulatory requirements for the MRC’s principal line of business of re-financing credits to borrowers on the security of residential mortgage asset and other qualified collaterals.
It also sets the capital adequacy requirements for the MRC, including its minimum paid-up capital, maximum leverage limit, and the minimum risk-weighted capital requirement.
Furthermore, the framework specifies the types of collateral that a borrower can pledge for the MRC’s advances, and the discount that the MRC shall apply in determining how much it can lend against any qualified collateral. It also prescribes procedures for the management of the MRC’s interest rate risk, its permissible investments and liquidity requirements.
It is divided into ten parts, beginning with a preamble, which includes a statement on the major regulatory powers and duties of the CBN with respect to the MRC’s operations. The second part discusses mortgage liquidity operations, followed by the licensing requirements for the approval-in-principle and the grant of final licence in the third part.
The fourth part highlights the MRC’s corporate governance requirements, including the specific duties and responsibilities of its Board of Directors and senior management. The remaining six parts of the framework discuss sources of funds, rendition of returns, prudential requirements, on-site examination, reporting, and off-site monitoring of the MRC and the administrative sanctions that the CBN may impose for violations of any of the specified regulatory requirements.
According to the framework, the Central Bank of shall have the powers and duties with respect to the operations of the Mortgage Refinance Company: to license it, to determine its capital adequacy standards and requirements and to supervise its business operations.
The supervision includes prescribing rules and conditions upon which the MRC may extend credits (“loans or advances”) to borrowers, prescribing minimum liquidity requirements and permissible investments, conducting both on-site and off-site supervision of the MRC operations and approving the Board and Management team of the MRC in accordance with the provisions of BOFIA and the Approved Persons Regime, and the appointment of the external auditors, among others responsibilities.
Activities
According to the Central Bank, the MRC shall engage in the following activities: Refinancing of fully secured mortgage loans; Investment in debt obligations issued or guaranteed by the Federal Government of Nigeria or any of its agencies, which shall not be less than 50 per cent of the MRC’s total investments; Issuing guarantee for mortgage loans as part of its off-balance sheet engagements; Issuing bonds and notes to fund its purchase of eligible mortgages; and other activities as may be prescribed by the Central Bank from time to time.
“The MRC shall NOT engage in the following activities: Granting consumer or commercial loans, Origination of primary mortgage loans, Acceptance of demand, savings and time deposits, or any type of deposits, Financing real estate construction, Undertaking of estate agency or facilities management, Provision of project management services for real estate development, Management of pension funds/schemes and All other businesses NOT expressly permitted by the CBN” the framework highlighted.
Requirement for licensing
The procedures and criteria to be used in granting a licence to the MRC will be the same as specified for banks under the Banks and Other Financial Institutions Act, CAP B3, Laws of the Federation of Nigeria, 2004 (herein after referred to as “BOFIA) and any other regulations issued by the Bank, the regulatory body said.
Any promoter(s) seeking a licence for the operation of the MRC in Nigeria will apply in writing to the Governor of the Central Bank of Nigeria. The application shall be accompanied with some documents which include a non-refundable application fee of N100,000 [one hundred thousand Naira only] or any other amount that may be determined by the Bank from time to time payable to the Central Bank of Nigeria and a detailed feasibility report.
This feasibility report will contain the objectives and aims of the proposed MRC (including a vision & mission statement); the need for the services of the MRC; the branch expansion program [if any] within the first 5 years; the proposed training programs for staff and management, as well as succession plan; and a five year financial projections for the operation of the MRC, indicating expected growth and profitability among others.
The financial requirements which may be varied as the regulatory body considers necessary include a minimum capital of – N5 billion, non-refundable application fee of N100,000, non-refundable licensing fee of N200,000 and change of name fee  of N50,000.
The MRCs are expected to sources for their funds via equity, paid-up share capital and reserves, long term loans from sponsors, debentures/bonds, loans from national and supra-national governments and other bodies, funds from developmental partners, gifts and donations from charitable institutions.
Source: Premium Times

Facebook explores local market as biggest delegation visits Nigeria

Facebook Inc. is exploring the possibility of setting up a regional office in Nigeria as a delegation from its European headquarters in Dublin visits Nigeria.
“This is the biggest delegation that we have come out with and I wanted to come and see what is going on in one of the most exciting countries in Africa,” Nicola Mendelsohn, FaceBook VP for Europe, Middle East and Africa (EMEA), who is leading the delegation, said in a Jan. 27 interview with BusinessDay, in Lagos.
“It has been an action packed couple of days meeting with clients, and consumers, understanding how they use technology and getting a feel for the market place. This is a market with such fantastic potential and growth. We can also see it with our own numbers.”
Facebook’s 42 million users in Sub-Saharan Africa SSA make up only 3.5 percent of the tech company’s 1.2 billion global users.
However the growing economies in Africa and other emerging markets is seen by analysts as providing huge pay-off for companies that tap into that growth early.
One area of potential growth is mobile advertising where Facebook currently gets 49 percent of its global revenues from.

Electronic commerce is booming in Nigeria as Africa’s largest cell phone market converges with increasingly cheaper internet access.
Nigeria had 120 million active cell phone lines and 56 million internet subscribers, as at September 2013 according to data from the Nigerian Communications Commission (NCC), while International bandwidth brought by undersea cables, has increased about 26 times to more than 9,000 gigabits per second (9 terabits) over the past four years.

“Something unique about this market is the uptake of mobile and how mobile is driving everything,” said Mendelsohn.
“Konga.com…did some advertising with us in the latter part of 2013 and their revenues increased by 300 percent as a result.”
The number of payments in Nigeria made by mobile phone’s more than doubled to 2.4 million in the first half of 2012 from the same period a year earlier, while internet payments rose 9.3 percent, according to recent data from the Central Bank of Nigeria (CBN).
Nigeria plans to grow its mobile broadband access to 80 per cent of the population and fixed broadband access to roughly 20 per cent by the year 2017 from 4 percent now according to the National Broadband Plan 2013-2018.
Mendelsohn says another interesting aspect of the local market is that Nigerian businesses that want to go global often use Facebook as a way of targeting the world.
“We see this from small and large Nigerian businesses who want to send their message accross to people in London, New York or Mumbai, about what is going on in Nigeria.”
Facebooks Nigerian clients range from the large corporate’s such as MTN, or Procter and Gamble, to smaller up and coming start-ups.
Facebook reported last October, that its third quarter 2013 revenues surged 60 percent to $2.02 billion, compared with $1.26 billion in the earlier period of 2012.
Advertising made up 89 percent of total revenues or $1.80 billion, with payments and fees making up the rest.
The Menlo Park California based company operates a social networking website that allows people to communicate with their family, friends and coworkers.
Facebook had a market value of $136 billion, as at January 27, 2014.
Source: BusinessDay

GE to invest $350mn in Nigeria’s power sector

General Electric has signed a deal with a Nigerian bank to invest $350 million in Nigeria’s ailing power sector, the country’s trade and investment minister said on Friday.
Olusegun Aganga said the deal between the US conglomerate and Stanbic Bank would finance small-scale projects to generate much-needed electricity.
“They are making available the sum of $350 million for the generation of mini-power projects because that is going to be quicker to do and will help the economic activities in the country,” he added.
The scaled-down facilities will produce between one and 20 megawatts of electricity.
Aganga said GE would also bring 10 of its suppliers to partner Nigerian companies to help develop power capacity and transfer of technology.
“The whole idea is for them to become part of their supply chain in (the) assemblage of turbines,” he told reporters.
GE signed a memorandum of understanding in 2012 to invest $1 billion mainly in Nigeria’s turbine sector.
Multiple power blackouts are a daily occurrence in Africa’s most populous nation, despite its status as the continent’s top oil producer.
Last November, the government formally scrapped its inefficient and graft-ridden power firm, handing its assets to private investors to try to improve supplies.
Nigeria has retained ownership of the national grid, but has privatised its management.
It is hoped that taking distribution, generation and transmission into the private sector will lead to steady supplies and reduce the reliance of homes and businesses on polluting diesel or petrol generators.
Nigeria has been courting foreign investors in recent years to keep the lights on. Deals have been signed with French, Chinese and South Korean firms.
Source: PM News

The Millionaire's Wife Who Feeds 40,000 Children

Tsitsi Masiyiwa, Chairperson, Higher Life Foundation
Tsitsi Masiyiwa, Chairperson, Higher Life Foundation
It’s 3pm on a crisp August afternoon in Johannesburg. Tsitsi Masiyiwa is seated on a comfy couch in a makeshift living room at her elegant office in the leafy suburbs of Dainfern, north of the city. I meet her when she is in a deep conversation with a South African journalist and one of her office employees. I sit down to join the conversation and Masiyiwa recounts a fascinating story.
The year was 1996 and Masiyiwa and her husband, Strive Masiyiwa, were almost penniless. The couple was going through a rough patch, and they were struggling to feed themselves and their children.
“We were so broke. We couldn’t even afford to give our visitors tea,” Tsitsi Masiyiwa says in retrospect. “We were practically living from hand to mouth.”
But things hadn’t always been this way. Just a couple of years before, Strive Masiyiwa owned a thriving business. He had founded Retrofit Engineering, an electrical contracting firm that handled lucrative construction contracts for the government and had built a considerable fortune. But his fortunes reversed in 1993 when he decided to establish Zimbabwe’s first independent mobile telecoms network to rival the government-owned telecommunications company.

At the time, the Zimbabwean Post & Telecommunications Corporation (PTC) was the sole provider of telecommunication services in Zimbabwe. When Masiyiwa expressed his interest in acquiring a mobile operating license and launching a substitute mobile telecoms network, the government threatened to prosecute him if he dared to pursue his plans. The Zimbabwean authorities denied him a license.  Refusing to bow to intimidation, he took the government to court, challenging the government’s monopoly on telecommunications and seeking the rights to operate a mobile phone company in Zimbabwe. It was a landmark case that lingered for close to five years, eventually finding its way to the Supreme Court.
“Our problems began when we sued the government,” Masiyiwa recollects. “You cannot sue the government and think things will always be right.”
During that period, the government, which was Retrofit’s biggest client, immediately called off its existing contracts with the firm. It had disastrous consequences for Strive Masiyiwa. Within months, he could hardly afford to pay salaries and he finally had to sell off the company’s assets to finance Econet’s legal battles against the government. Before long, the Masiyiwas’ funds had dried up, and they were on their wits end.
“So we were broke. In trying to understand what was going on around me, I began to do an intensive soul searching. Then I prayed to God and made a deal with him. I told God that if he granted us the license to operate the mobile phone company in Zimbabwe- and he made us successful, then I will help support as many poor people as possible for as long as I lived,” Tsitsi Masiyiwa recalls.
Tsitsi Masiyiwa, a deeply religious woman, took a step of faith along with her husband. “We went ahead and registered Capernaum Trust, a charity that we decided would give scholarships to needy children. It was an unpractical thing to do at the time, especially considering the fact that we had nothing. But as a Christian, you do unreasonable things,” she enthuses.
God probably answered her prayer because in December 1997 the Zimbabwean Supreme Court awarded Econet Wireless a license to set up a mobile telecoms company in Zimbabwe. The Supreme Court ruled that the government’s monopoly on telecommunications was in violation of a provision in country’s constitution that allowed for freedom of communication.
Econet launched its services in Zimbabwe in 1998. Growth was rapid. Within a few months of setting up in Zimbabwe, Econet became the leading mobile telecoms company in the country. It has maintained that trajectory in the last 15 years and has grown to amass about 10 million subscribers spread across Zimbabwe, Botswana, Burundi and Lesotho. Strive Masiyiwa is now Zimbabwe’s richest man.
As Econet began spitting out handsome dividends for her family holding company (which owns the chunk of Econet shares), Tsitsi kept her promise to God.
“I gathered as many orphans as I could find from all over Zimbabwe and I threw a party for them,” Tsitsi says.
Tsitsi regularly held party-like events in her home for orphans in which the children always ate to their fill. Many times, she visited the children in their orphanages, offering them food and personal mentorship. It was an exhilarating experience for her, but she felt it was not enough.
“I spent time with these children and I came to love them. I wanted to keep doing more for them, but I realized that it was not just enough to keep giving them fish. I had to teach them how to fish. I wanted them to grow up and fend for themselves and become successful people. I wanted them educated,” she says.
It was at that point that Capernaum Trust began in earnest, supporting orphaned and vulnerable children by paying their school fees, and providing funds for school uniforms and stationery. Strive and Tsisti Masiyiwa dug into their personal resources to fund these scholarships.
Today, the Capernaum Trust pays the school fees of over 40,000 students, whom Tsitsi calls  “History Makers,” across the Primary, High school and Tertiary levels.  Of that number, close to 3,000 of them are University students with some of them studying in the United States, South Africa and Australia, where the fees are usually much more expensive that in Africa.  In February, Tsitsi and her husband established the Ambassador Andrew Young Scholarship, a $6.4 million dollar scholarship fund that sends African students to attend the Morehouse College in the United States. The fund is named after Ambassador Andrew Young, a former United States Ambassador to the United Nations, who is renowned for his vanguard role in the international Civil Rights Movement.
Tsitsi is quick to emphasize that beneficiaries of their scholarships are not mere students, but “History makers.” And the connotation has a spiritual dimension to it. “Once an orphan comes on the program, he or she ceases to be an orphan because s/he now has a Father in heaven who empowers him/her to make history,” she says.
The Trust now has ‘History Makers’ in Zimbabwe, Burundi, South Africa, Lesotho and Swaziland, and Tsitsi says they are planning to take on more countries in their programme.
“We are most certainly planning to expand to other African countries. While setting up the Trust was in line with fulfilling my promise to God, it was also majorly driven by a desire to see major development and social upliftment in Africa. The Econet Group does business in many African countries and we are making money from these places. We have to give back. It’s only reasonable thinking that businesses give back to the communities in which they do business.”
While the Capernaum Trust traditionally provided only scholarships, uniforms, food packs and stipends, Tsitsi says they now also provide career guidance and medical assistance to its beneficiaries. It is a holistic intervention.
The Masiyiwas spend several millions of dollars every year from their personal resources in addition to financial support from Econet Wireless to support these philanthropic endeavors. Tsitsi politely declined to disclose how much it spends annually on these scholarships. The Capernaum Trust is also generously endowed and it invests its resources in an assortment of sophisticated financial instruments and property.
While the Foundation’s philanthropic work has had several successes, there have been a few disappointments.
“It’s not all roses. We’ve had cases where some of our girls got carried away and became pregnant out of wedlock, and then they had to drop out of school. We’ve had boys who left our programmes to head cattle and some girls have eloped to get married early,” she says.
But Capernaum’s success stories far outnumber its not-so-successful stories- a feat for which Tsitsi is thankful.
While the Capernaum Trust is Tsitsi Masiyiwa’s most popular philanthropic endeavor, it is far from her only one. Along with her husband, she is a co-founder of three other charities- the Christian Community Partnership Trust (CCPF), a charity that provides financial support for church and church organizations working in the least evangelized areas of rural Zimbabwe; the National Healthcare Trust Of Zimbabwe which provides financial support for medical drugs, human resources, transport in the event of a health crisis and the Joshua Nkomo Scholarship Fund – named after the late Zimbabwean nationalist which also awards scholarships to exceptionally intelligent Zimbabwean children. These four foundations are part of the Higher Life Foundation, an umbrella organization for all the charity efforts of the Masiyiwas. Tsitsi Masiyiwa serves as Executive Chair.
Why is Tsitsi Masiyiwa and her husband doing all this?
“We’ve been successful, and I feel that people who are successful have a responsibility to support initiatives that will fuel Africa’s growth and development,” she says matter-of-factly.
“Look around Africa, you’ll see that new millionaires are springing up everyday. It is good to create wealth, but along with wealth-creation must come a deep sense of responsibility. Africa’s rich need to collectively deploy their resources for the good of the people around them.”
Tsitsi Masiyiwa is now at the vanguard in urging rich Africans everywhere to give back.
In April this year she joined forces with some of Africa’s most prominent philanthropists such as Nigerian investor Tony Elumelu, Kenyan banker James Mwangi and Nigerian philanthropist Toyin Saraki to form the African Philanthropy Forum (APF), a regional affiliate of the San Francisco-based Global Philanthropy Forum. The group aims to build a community of African donors and social investors devoted to fueling Africa’s growth and development.
“Collectively, we will find the best, effective and most strategic way to pursue philanthropy in Africa,” she says.
Source: Forbes