InnovaLab is Guinea-Bissau’s premier innovation and business incubator and since 2016 we have been serving and developing Guinea-Bissau’s entrepreneurial ecosystem. Our mission is to inspire and empower Guinea-Bissau’s youth to solve their immediate socio-economic challenges through digital technology and entrepreneurship.
Over the last 6 years we have incubated 22 businesses, hosted over 300 events and workshops, and reached over 100,000 people within the country and the diaspora through digital content and in-person gatherings.
What we have observed over these last 6 years is that businesses in Guinea-Bissau are struggling. They are struggling to access loans to start or grow their operations, and they are struggling to access training and other business resources to support them in their formation and growth. Covid-19 not only exacerbated these issues, but led many businesses to shut their doors permanently.
As a by-product of governance issues and poor financial management, Guinea-Bissau ranks last in the Doing Business Index’s Resolving Insolvency score, which measures a country’s ability to repay its debts. As a result, it is challenging for businesses and financial institutions in Guinea-Bissau to attract foreign investment due to the country’s political instability and financial insolvency.
At Innovalab, we are acutely aware of these challenges, and based on our experiences we have developed an approach to address the needs of both foreign investors, who are seeking transparent and accountable capital deployment, as well as the needs of local entrepreneurs, who require the technical assistance to appropriately steward funding they receive to become sustainable businesses.
Through this lens we created ORIK Capital, a first of its kind impact fund dedicated to financing micro, small and medium sized businesses in Guinea-Bissau.
The word ORIK (in Portuguese creole) comes from the rice fields in Bissau, where Oriques (in Portuguese) are used to protect young rice plants and to manage the water levels of the flooded rice fields. Growing rice is a delicate balance, and the Oriques create the environment that allows farmers to monitor and adjust the growing conditions to ensure the rice grows into healthy and productive plants.
ORIK Capital was designed with this principle in mind.
ORIK Capital is a project developed by InnovaLab and the Guinea-Bissau High Commission of Covid-19 from the Office of the President. This project was chosen by the Government as a way to leverage entrepreneurship and digital transformation to mitigate the socio-economic impact of the pandemic and to help with the economic recovery of the country post-COVID-19 and beyond.
With ORIK Capital, our goal is to deploy 20 million euros in impact funds over the next 5 years to finance 4,000 entrepreneurs and enterprises across three levels of Guinea-Bissau’s business sector:
- Micro businesses/ the informal sector: ORIK Digital Microcredit, a micro-loans program using USSD and Mobile Money technologies to support micro-entrepreneurs in the informal sector, especially women in markets and producers in rural areas;
- Startups and small businesses: ORIK Entrepreneurs Fund (Bolsa de empreendedor), a Grant+Loan to support business creation and development at the earliest stages for first time and seasoned young entrepreneurs;
- Growth stage businesses: ORIK Venture Capital Fund, a quasi-equity investment to support qualified businesses from the Entrepreneurs Fund and existing businesses in the growth phase.
What makes this fund unique is that we have taken many of our learnings from over the last 6 years and incorporated digital, social, and operational accountability and support structures into the way the fund is designed and operated.
The first important design element of the fund is that each fund serves as a progressive stepping stone to the next stage of business growth. The objective here is to transform informal businesses (through Orik Micro-Credit) to formal businesses (Orik Entrepreneru’s Fund), and to take formal businesses to sustainable, profit generating businesses that have the ability to employ staff and contribute to the growth of the local economy (Orik VC).
This structure ensures that we have visibility into how the business is being managed from its early stages up to the point that it is largely self sufficient. In this manner we can also begin to standardize the quality of business training within the country.
Secondly, in order to de-risk the capital within the fund, we’ve built a proprietary software that allows us to monitor business transactions for each business that receives funding. This not only creates a technical and social accountability structure for how the funds are being deployed, for both the fund managers and the entrepreneurs, but it also creates a digital ledger for the businesses that previously had no credit or business transaction history.
And lastly, to ensure the project is sustainable and inclusive, we will work hand in hand with local partners and incubators to facilitate activities that organize the business ecosystem. While the project was born from within Innovalab, it is designed to support other incubators and business ecosystem stakeholders in order to create cohesion, standardization, and a unified vision for the country.
It is our belief that building a robust business ecosystem in Guinea Bissau can help boost the economy and improve local livelihoods. Through the venture creation and business growth catalyzed by the fund, we expect to create new jobs and income generating opportunities for 15,000+ people. And as a by product, we expect over 120,000 individuals will benefit from the boost in sustainable economic activity.
We are excited to be on this journey, we invite you to join us!
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