Goodwell is an impact investor whose portfolio stretches across the African continent and beyond. Its mission: investing in entrepreneurs and small companies that contribute to an ‘inclusive economy’, an economy in which everyone can participate. To learn more, Club Africa speaks to founding and managing partner Wim van der Beek. How does Goodwell create impact?
“The poorest amongst us”, says Wim, “surely have money to spend. Yet people often get low quality and pay too much for needs such as food, housing, credit, insurance, energy and water. At Goodwell, we invest in entrepreneurs and enterprises that deliver sound and affordable products and services to this group of people. Goodwell invests in small African banks, for example. These banks provide entrepreneurs with the financial means required to grow their companies, and enable financially excluded people to open a bank account and get a small mortgage. So they can maintain their house. Beyond financial services, we focus on energy, hygiene, water and sanitation, and housing.”
Why focus on the poorest, we ask Wim. “At the age of 43 I took a break from a successful career in finance and was looking for ways to give back to society rather than only establish the good life for myself. I read Emmanuel Levinas, a philosopher who wrote that the face is the mirror of the soul. Around the same time, I met Nobel Prize winner Muhammed Yunus, the pioneer of microcredit, who showed me that poverty wears out one’s identity. Empowering poor people by financially including them with small, affordable loans which enable them to work their way out of poverty, makes their eyes, their faces, shine again. It became my way to help people restore their identity while making a good investment, and it is how Goodwell was born. Today our portfolio reaches almost 10 million families and generates a market rate of return.”
The investment firm, which was founded in 2004 and gradually expanded its portfolio in both Africa and India, receives its funds from private individuals and institutions. The latter includes the World Bank, various pension funds, and organisations such as the Netherlands Development Finance Company FMO. According to Wim, Goodwell’s private investors are people who are of the opinion that the wealth they accumulated should serve a sustainable purpose beyond themselves. “Oftentimes they want to make a structural contribution and choose to invest, rather than donate money.”
A company that exemplifies Goodwell’s portfolio is Nomanini, which is based in South Africa and was added to the portfolio in 2015. Nomanini provides (multinational) companies with affordable payment services in cash-based informal retail settings. Its hand-held terminals enable registered transactions in an informal economy environment, where collecting formal payments can be challenging. The company is growing rapidly, already operates in Mozambique, Ghana, Kenya and Zambia, and has the potential to grow into the rest of Africa.
For its investments, Goodwell is on the lookout for entrepreneurs who are passionate about creating a more inclusive economy. A scalable business model, furthermore, is a must. Wim: “We invested in Nomanini, party because its business model could be scaled to reach millions of informal merchants across Africa and beyond. But not only financially a company should have a strong proposition – Goodwell wants a company to have an intrinsic capacity to affect as many disadvantaged people as possible, and help them improve their livelihoods.”