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For more info on Kwizera and IFC’s programs, see:
- Water Access Rwanda
- Moving Toward Gender Balance in Private Equity and Venture Capital
- Private Equity and Value Creation: A Fund Manager’s Guide to Gender-smart Investing
Transcript:
Christelle Kwizera (Founder of Water Access Rwanda): All right, let's start it in the shower. Who enjoys taking a shower at night?
Jasmin Bauomy (host): This is how Christelle Kwizera starts her TEDx Talk.
CK: After all the stress of school or work or relationships, a shower is always there. But I want you now to think about how privileged you are.
JB: And right here. That is how she gets everyone's attention for something that we don't often hear about: the need for access to clean water.
You're listening to Creating Markets. And I'm your host, Jasmin Bauomy. On today's episode, we're talking to Christelle Kwizera. She's a Rwandan social entrepreneur and the founder of Water Accesfs Rwanda. That's a company that's solely devoted to giving people access to clean water.
CK: Young African entrepreneurs are stepping up to address needs and to make money, because for many young Africans, actually, entrepreneurship is the only way for them to take control of their careers because job opportunities are so scarce. So, entrepreneurship is one of their ways to start using their skills without waiting on anybody to give them a job.
JB: She and I dove into why addressing a basic need can be best achieved by starting a company and why storytelling skills are really, really helpful.
CK
: Stories are very powerful.
JB: Christelle is a natural storyteller, and not only is she good at it, it's also what got her company the investment it needed.
CK: For me, it's about exposing the reality that people are not aware of. I often meet people who have a certain stereotype of who I should be, or who my people are, or who Africans are.
And we need to change that because at the end of the day, we're all humans. And unfortunately, as a black woman, I've been on the receiving end where people didn't attribute to me the same humanity they attributed to themselves. And I found that we tend to see poor people in a different light, as well.
JB: Christelle speaks out of experience. She wasn't poor per se, but her parents dealt with people who lived in poverty. And growing up in Rwanda, her parents were involved in trying to fix the needs of everyday Rwandans.
Her dad, for example, fought land erosion and her mom was working on helping women deal with fistulas.
And teenage Christelle got mildly obsessed with MacGyver's ingenuity [clip from MacGyver] and space exploration.
CK: I was really, really passionate about engineering. So I kind of always thought, you know, let me go and I'll have some role in the space industry.
JB: Now, fast forward a few years and Christelle finishes high school in Kigali, Rwanda.
And then she goes on to study mechanical engineering in Oklahoma. And there she becomes somewhat of an activist for several important issues. She even spoke at the African Union headquarters. Just imagine. By that time she wasn't even 20. And then one day, another opportunity came along.
CK: So really, that was the catalytic moment for me. It was at a Starbucks, and here I am, the former president of my university is like: ‘If I give you $60K what would you do?’
You know, it wasn't the $1 million, but it's one of those questions. We all feel like we know what you would do, but in the moment I was like: ‘Hm, priorities, priorities. What could I use for, you know, why would that use $60K for?’
And my biggest passion at the time was creating employment. I knew everything affecting young people hinges on employment. If you have a great guaranteed future, you're going to make better decisions for yourself. And this would affect reproductive health. It affects teenage pregnancies. It affects livelihoods of young people, involvement in drugs and other unhealthy lifestyles.
So, employment was something I knew can really unlock great impact for young people.
So the piece of the equation was: ‘Okay, what project could I do?’ So the number one thing is it has to be a project that creates employment.
And at the time I read on the news that these villages in Eastern Rwanda were facing an issue where crocodiles had migrated into the local lakes. And there, the only source of food is people and animals.
So I decided to do something about it to create safe water sources away from the crocodiles. So that's how I ended up deciding on the water project. And in the end we raised $75,000. So it was a little bit higher than the $60,000.
When I was doing all of this, honestly, it was for me a three month project. I never imagined it would guide the next six years of my life.
JB: That summer Christelle traveled back to Rwanda, where she started recruiting and training apprentices, and together they got to work.
And soon they saw that other than digging boreholes, they'd have to truly educate communities about water, safety and sanitation. So every day she and her team would drive into these rural areas surrounding lakes and rivers and on those drives...
CK: It was a bridge that I passed every day when I went to the community we're working in. So there was water running under the bridge, not even clean water by the look, by the eyes. And there was also a borehole. So it intrigued me. So I stopped and I asked the community, why are you passing the borehole and going to the lake? And then they said they were worms inside the borehole. So it was like, you know, there are worms, they could see in the borehole. But there are worms they can't see in the river water they were using.
And so, in the river, people were washing bicycles and there was a guy taking a shower. And then I see this lady take a scoop of water, and drink it. And so I had to address her. So I'm like: ‘Don't you see this water is unclean. And, it's like, there's the person right next to you washing in the same water you're drinking.’
And the lady was like: ‘Oh no, it's fine. He's my husband.’
And I'll never, ever forget that.You know, they recognize that there is cleaner water, but they also say: ‘Oh, this water won't do me any harm.’
JB: With her team, Christelle dug 13 new boreholes, and she quickly learned an early lesson about water access and water pumps. It was a mistake she would never make again.
CK: Unfortunately, for the time, we were installing hand pumps. And, right now we don't really recommend anybody install hand pumps, unless they have a long-term maintenance routine in place for those hundred pumps.
And by the end of the summer, of course, we opened our last borehole. The first one was already broken. And for me, that was the moment that pushed me to be like: ‘Okay, let me go register the company.’
We were failing on the job, obviously. But also we were willing to tell the whole story. I think a lot of people never stay long enough to tell the full story.
You know, we have the happy pictures of the opening ceremony and you're out of the community. But this was not possible for me. You know, we stayed long enough. I was really keen to see a complete improvement for the population from having this access to clean water. And, when, of course I saw the boreholes were breaking, I just couldn't ignore it and, you know, file the project.
For me, it was always something on my conscience and I'm glad we went back now and fixed many of those boreholes.
JB: That was also the moment Christelle realized that registering a for-profit company was the right way to go for her.
CK: One thing I noticed was the low scalability in the nonprofit world, you can have perfectly little initiatives, right? Very well designed, very well monitored, but it kind of ends there. They don't really scale them to massive levels. And in the process of doing those initiatives, a lot of money is spent.
When in the business world, the beneficiary, your client, I mean they're king. There's no question about that. What matters is, your clients are happy and they keep coming for what you're offering.
So those were my motivations to register as a for-profit one. One, to make sure that our mission was always very centered, on the clients, the beneficiaries of our work. But also that it could scale.
JB: Another reason she felt her company was much needed in this space was a sense that there’s a misconception about what poor people actually need.
CK: Poor people are people who don't have a lot, but they do have something. So sometimes when people are planning for the poor, they don't see them as the market at all.
So, I feel business in its transactional sense gives the voice to the user for whatever you're offering, not the producer. So if you offer a product and it fails, it's your burden as the business to go and change it so that it can be successful and you can continue existing.
That's what we found out exactly. So of course, nobody's going to refuse water. They needed to survive, but if they had an option, would they prefer water out of a hand pump or would they prefer water out of the pipe in their homes?
So, for me, that kind of thinking, that kind of mentality, was what pushed me to do a for-profit enterprise.
But at the same time, me being me, our enterprise has a very strong social mission. And it was never really about making money for shareholders, but creating as much impact as possible.
And the reason for choosing a for-profit company was just for the potential for scale that is in the private sector.
JB: Christelle, being who she is, meaning an African woman in her twenties, she quickly received a lot of coverage in the media and it's something she wasn't always happy about.
CK: A lot of people didn't actually care for the work we were doing . There was a lot more following of a young female person doing this. And it bothered me, but I started embracing it because it's been a source of good opportunities for us.
Obviously, young female engineers are pretty rare, especially also in the entrepreneurship space. So, there needs to be more to encourage more people like me to join.
And, I was surprised to find that within my field, I didn't really have female role models. I only could think of male role models. And so, that completely brought it to my face, like: ‘Oh my God! You know what I'm doing is very important because I can just be myself and lead as a woman leader. I want to lead and this is going to inspire somebody else.’
JB: It's been about six years since Christelle started her company. And up until this pandemic, things were going rather well. Water Access Rwanda was on course and growing by the day, but this pandemic has been dragging on.
CK: I'm surprised we survived this far. And I have to tell you, it’s starting to look like we're going to finish the year.
But definitely, during lockdown, we called our clients: ‘what's happening.’
And, you know, that's when you start realizing that most of them depend on daily work to earn any money. In some way, telling you straight up, like: ‘I'm back to fetching, dirty water. I can't afford the water anymore.’
And we reacted quite quickly and provided free water to people who were experiencing hardships to make sure at least they had water to sustain themselves through the lockdown.
Definitely, it's been very, very scary to see our liabilities grow, while our cash balance goes down. But as a bootstrapper, we have to have faith in our model. We know that it works. So it's to know that, okay, this is a setback, but better moments are ahead.
JB: It looks like Christelle and her company will make it out of this crisis with several investments and projects waiting for them in 2021. Actually, her company's growth ambitions are really big because by 2030, she'd like to be established in 12 countries and impact the lives of, you know, just 20 million people.
And the goal is to do that by building these mini grids for water access. And that also means that the search for investors, it just never stops.
CK: Some of the feedback we get from investors is, obviously water is kind of a niche sector, which is not attracting a lot of private capital right now. At the same time, a lot of the investors coming to Rwanda, for example, want highly scalable businesses, but that offer the types of returns that VCs are looking for, which sometimes seem a little bit excessive, right?
It's not very patient. It doesn't take into account the market building side of any venture in Africa. So you end up appearing very risky to the potential investors. We're still hoping and are finding investors who are up to the risk and understand the opportunities that actually lie in the sector. Because we are proving, we can create a market out of the bottom of the pyramid, which is the question everybody needs to answer.
How do we transform the bottom of the pyramid into a profitable market? And we're answering that and we're making it into a reality.
JB: But it's not only the impatience of potential investors that make it hard for entrepreneurs like Christelle to grow their business. There are other challenges for Rwanda's start-up ecosystem.
CK: We have a very, very small number of investors who are in Rwanda. First of all, I mean, the local ecosystem is still very nascent. We don't have entrepreneurs here investing in other entrepreneurs. But also within the African continent, a lot of the money's coming from foreign investors.
So we don't have a lot of local investors yet. I know there are investors from South Africa, for example, that are diversifying and looking at the rest of the continent, especially to invest in younger companies. So I hope more of that happens.
Because also, one of the other things is the local investors tend to be also in the higher deal round. Right? They look for really big investments. Whereas most entrepreneurs like myself are looking right now at between $100,000 to let's say $2 million. So, that's a space where you don't have that many investors. And then, you also have investors who are looking at seed capital and it's really low, right?
It's $25,000. It's $50,000 almost max, and sometimes they want to take so much equity for that investment. So, if you raise too late in your journey, then that money becomes, not useless, but it's not something you'd be willing to give up a lot of equity for. So I think one of our mistakes was starting to raise money really late.
I think when we started raising, our bandwidth was already like $15,000 a month. Now it's around $22,000 a month. And so you can imagine, I need much more capital than what a normal seed or angel investor would be giving.
JB: Christelle says one of the main values needed right now is patience. Patience to see the ecosystem mature and patience from investors. But she also says there's a different aspect that poses a challenge to finding investors. And it's a challenge she really can't do much about.
CK: But you start realizing, you know, where capital is going. And, unfortunately it's the bias we all know and hear about. It's going to white founders. It's going to male founders.
You don't see that many investors taking a chance on businesses like mine, and unfortunately, it's hard to acknowledge, but it is the reality that there is a confirmation bias.
Luckily this year especially there've been a lot of call-outs. There's been a lot of exposure. Look at the data like 1 percent or 3 percent of the money is only going to female founders and black women are, you know, point something percent, not even 1 percent.
So, when you start looking at the data, suddenly it's kind of a light bulb moment because there is never a non-risk investment. But something about, again, not having role models, not having people who have kind of created the path before you, we have to fight against all of those stereotypes.
And, I'm so glad I've been able to find the right investors who are aware of this bias and who are still willing to take a chance.
JB: And that's it for this episode of Creating Markets. If you want to learn more about Christelle and her company, you'll find the link in the show notes.
IFC is committed to moving toward gender balance and private equity and venture capital. And to address that, it has published a 2019 study that explores the business case for diversity in funds. And as a follow up, there’s a 2020 gender-smart investing guide for fund managers. I’ll link both of them in the show notes.
If you liked this episode, please share it on your social media and tell your friends and family about it.
Thank you so much to Christelle Kwizera for taking the time to talk.
Creating Markets is a production of the IFC comms team. Nicholas Alexander is the sound editor for this episode.
And I'm your host, Jasmin Bauomy. And I'll talk to you again soon.