Five weeks ago, I was in Mali. At that time, we were talking about the Sahel food crisis which had the potential to become a huge tragedy if not addressed on time.
It was just a short time back but since then two other issues put Mali in the news ;, the coup and the return to democracy. According to the President of the Election Commission, Mali was expecting to hold elections in April, despite the conflict in the north which was also being talked about as a rebellion by the Tuareg. Even the coup was associated to that conflict and the fact the Tuareg were very quickly taking over big part of the territory.
This is not an article on the coup, or the elections or indeed the food crisis. I want to share a story. A story of investment, innovation and entrepreneurship. I want to talk to you about Madame Fatouma Djara. She is the founder CEO of the company which is the star in my story.
A couple of years ago her business was in difficulty and desperately, needed injection of capital to get out of the red. After hard efforts she managed to get an international investor interested in investing on her business. The investors were banking on her management skills However, they were cautious and agreed to invest in three instalments – the first in May 2009 , the second in October 2009 and and the final one January 2010.
With the fresh money of the first instalment Madame Djara decided to enter in the ready-to-eat food. She knew that in in Mali, specifically in Fakola in the south, the families spent long hours in working so there seemed to be a clear market in the market for her products. The savings in time and the convenience of having the food ready will be worth if she was able to find the right price range. She started it and the business was doing very well, the company was selling out all the production, the initial investment was paying off, actually the demand was so huge that production could not keep up. .
Then it arrived the moment for the second instalment. Madame Djara encouraged by the initial success decided to keep the investment in the same business but expanding it geographically. She saw a very clear opportunity in satisfying the market demands of other locations beyond the original one. Transportation was a challenge, but she was able to overcome it. And not only that, also the company invested in diversifying the suppliers so getting better prices, reducing costs and increasing profits. The business was going even better than before, but Madame Djara was already musing something different.
So when the third bit of the international investment arrived she decided it would be worth to diversify. She analyzed her current market and thought it would be difficult to make it grow because of the associated costs of opening new markets further and further away. Some issues related to health were coming up in the ready-to-eat food business. So the decision was to embark the company in a new sector, in apparels. There was hope that the customer base for the ready-to-eat food would move to the apparel segment too.
In order to minimize the risk the decision was to keep both businesses at the same time. This would provide evidence on what was more profitable. Finally the figures were clear, the margins in the apparel business were higher. So she disinvested in the ready-to-eat food business and focused in the apparel one. And that is as she told me her story and how I learned it my recent trip.
That is with no doubt a clear tale of business success. A story what could be printed in the business pages of any newspaper. The only reason is not in such papers is because the international investors who trusted in Madame Djara are Oxfam. Because that investment amounted only 90USD, paid in three instalments of 40,30 and 20. Because the ready-to-eat business was selling around french fries, first in her village and later in close villages. And her apparel business was selling second hand clothes in those villages. And, you know, such stories lack the glamour you need for business pages.
But nobody will deny me a couple of insights. The first one, the story is as good as any of those big multinationals if we think in how to achieve business success and to show that talent, innovation and entrepreneurship may work in any place, no matter the scale, the starting point or the difficulties. Even more, such success may help people like Madame Djara to get out of poverty.
The second one, what is much more important. To be poor is not a synonym to be dumb, or not be entrepreneur, or to be lazy, or not to be innovative. To be poor is a synonym of not having opportunities, nor access, neither the trust of the others. Because as Madame Djara taught me, when the opportunities are provided, the access granted and the trust showed, all the potential explodes and you achieve amazing results. Nor a single international investor, as all the Oxfam supportes are, could never have used 90 USD of investment better that in this wonderful story of success of a women like Madame Djara that now can feed her family and can keep dreaming with a better life.