JALI Finance presents a very interesting case example of an entrepreneur that is keen on delivering value to its customers. Maybe more important is that JALI is focused on delivering value to a client segment that is often un/underserved. Not all entrepreneurs are the same and many people in Rwanda (and around the world) often feel compelled to start a business as a way to access cash for their family’s needs. In contrast, as the story below outlines, JALI is on a mission to innovate financial services for initially lower-income clients that want to buy a motorcycle as a way to generate income, but with an intension to widen it's product offerings for other low-income customer segments. From a market systems perspective, JALI provides an example of the type of entrepreneurs that market systems should be catalyzing in larger and larger numbers.
Driven by their mission to promote impact for consumption of Rwandese products through credit, JALI Finance is a local start-up financial institution that offers an innovative lease-to-own program for motorcycles. By employing an approach that focuses on alternative measures of loan approval (beyond credit and collateral), flexible funding options, and affordable repayment terms, JALI has been able to unlock a previously underserved client segment -- young jobseekers in Kigali, who often migrate to the city from rural areas in search of greater opportunity, but who most often lack the financial literacy & resources to access products from a standard financial institution. The moto-leasing program has a cross-sectoral impact on the Rwandan economy; through expanding the number of moto-taxi providers, JALI is enabling transporters across value chains greater means & opportunities to perform their business activities, contributing to the agribusiness sector & beyond.
When the first case of COVID-19 hit Rwanda in March of 2020, and the country entered a national lockdown to combat the virus, motorcyclists across the country lost their source of income. One of JALI’s swift responses to the pandemic was a pause they placed on their loan repayment programs, offering drivers a much-needed reprieve. As infection rates in the country continued to decrease, and the government began easing travel restrictions and re-opening the economy, JALI followed, and was able to manage the economic shock of the pandemic without losing much business.
With demand for motorcycle financing far outpacing what JALI Finance is able to supply currently, JALI continues to seek additional financing to both expand current and new client segments. For example, the moto-taxi industry in Rwanda is a heavily male-dominated profession, and JALI is looking to expand their product offerings to target women looking to enter the field. Additionally, JALI is partnering with Ampersand to offer made-in-Rwanda electronic bikes among their leasing products, which will contribute to reducing CO2 emissions. Furthermore, JALI is keen on creating more packages focused on other products, such as consumer loans to finance products such as insurance, fuel & electricity.
In addition to working toward expanding their product offerings and client segments, JALI is also focused on increasing the sophistication of their internal business practices. Most of their advertising and marketing measures are driven by existing customers, through word of mouth testimonials and personal referrals through friends and family networks. Given this, JALI is looking to build & employ a scientific way to track customer satisfaction. Such a tool is essential for growth-oriented businesses that are, in large part, defined by a commitment to deliver value back to their consumers.
JALI aims to grow through new product lines, accessing new client segments, and by leveraging current loyal customers. To help fuel these plans for growth, investment is needed. In 2019, through the USAID Rwanda Nguriza Nshore Project JALI began working with a transaction advisory firm with offices in Kigali, BiD Capital Partners. Although JALI had successfully received investment financing in the past on their own, through their partnership with BiD and other advisors, they have been pursuing more, and larger, offers for investment. As Felix Nkundimana, CEO of JALI says, “When you dream to build a financial institution, it’s really something big enough to always be in need of financing. I don’t see us ever in a situation where we say, ‘Oh, today we don’t need any investment.’ I used to tell people, ‘Even big banks are still always looking for investment.’ So, when we look at the investment, we look at almost everything. By ‘almost everything,’ I mean our business can work well with loans, grants, & equity.” This sentiment exemplifies JALI’s commitment to grow based on the value they deliver to their client segments that have been historically un/underserved. JALI’s openness to find the best type of investment for their company and their customers is critical to achieving their longer term growth objectives.
JALI’s vision for the future is inspiring -- through their continued commitment to reach and deliver value to underserved populations in Rwanda, as well as their hunger to expand their operations and product offerings through external investment, JALI recognizes their potential for growth. With sights set on transitioning to become a pan-African digital bank one day, nothing is out of reach.
Written by the Feed the Future Nguriza Nshore Team
In the following post, Richard Choularton (Tetra Tech) provides a critically important lens into the immediate and real challenges climate change is placing on farming communities worldwide. In addition to defining some of the most pressing issues, such as changing agronomic conditions that shift what is possible to be grown in specific locations, the author also highlights that many farming communities are living and working in wider social and market systems that do not have the capacity to effectively adapt. Even in the country cases the author cites as being effective at adapting, not all the communities in those countries have similar access the knowledge, financing, market connections, etc., needed to adapt to the changing conditions in their fields. It is also important to add that while the author does a good job of outlining how farming communities will have to change in regard to near-term challenges, the level of inclusiveness and the ability to reduce the pace of climate change will determine if any near-term change in what is being farmed will have lasting value.
Agricultural market systems are transforming because of climate change. In India, apples are moving upslope and pomegranates are being grown instead. In Central America, coffee is moving up and out and being replaced by cacao and citrus. In Bangladesh, farmers have switched from rice to aquaculture. Farmers and agribusiness have made these adaptations on their own as their principal traditional crops become less viable due to precipitation and temperature changes, shifts in pest and disease prevalence, and changes in water availability.
Although each transformation is unique, they occur in places where there are adequate market systems and institutional capacity to enable them to adapt. These examples offer critical insights into what farmers, communities, the private sector, and governments need to do to make agriculture and food systems climate-resilient. They also stand in contrast to the places where this capacity is lacking and where the failure of agricultural and food systems can have more significant consequences: food crises, out migration, and violent conflict.
Over the last three years, I have worked with colleagues at the World Resources Institute to look at how policymakers can accelerate transformative climate change adaptation approaches in agriculture. As climate change accelerates, the viability of crop and livestock production systems in some areas will diminish. To build climate resilience, new crops will have to be introduced, production moved to more suitable areas, and production systems changed fundamentally. These changes are challenging, especially for the most vulnerable populations.
In case studies from India, Ethiopia, Bangladesh, and Costa Rica, we found several common elements:
In other words, each of these places had adequate adaptation capacity within the market system to respond to the challenges climate change posed to their agricultural systems. However, there are also many places where the most vulnerable households face severe adaptation deficits and do not have adequate capacities to manage and thrive given the current climate risks. We found that adaptation deficits are systemic and institutional. For example, without the research capacity to identify what alternative crops will thrive in a changed climate, the extension capacity to support farmers to switch crops, the value chain finance to support the switch, and the marketing capacity to store, transport and sell new crops, transformative adaptation isn’t possible.
Inclusive market systems approaches offer a critical tool for overcoming systemic and institutional adaptation deficits. Better integrating climate change impact and options analysis into the market systems development process is a start. Better analysis can help market actors and policymakers envision a more climate-resilient, inclusive, and sustainable market. Better analysis can also inform real investments in the capacities needed in the public and private sector to support locally driven, market-based adaptation pathways that promote inclusion and equity.
Policymakers, researchers, and funders can take steps to accelerate transformative adaptation action. In June 2021, the World Resources Institute published their solutions in a research article titled: Food Systems at Risk: Why Transformative Adaptation is Needed for Long-Term Food Security. The article provides specific recommendations on actions stakeholders can take to make our food system climate resilient. Some of the most important recommendations include: the need to support the development of policy and planning tools that allow governments, businesses, and communities to better integrate transformative adaptation pathways into their policies and plans, supporting inclusion, equity and sustainability.
For more information:
Food Systems at Risk: Why Transformative Adaptation is Needed for Long-Term Food Security (Online Event: June 23, 2021: 9:00-10:30am EDT)
Food Systems at Risk: Transformative Adaptation for Long-Term Food Security (Report)
The MSDHub Blog Series is authored by respected implementers and donors of market systems projects globally.