Pezesha team (Image credit: Pezesha)
Recently, in the International Day of Family Remittances event, the United Nations Capital Development Fund (UNCDF) announced a strategic partnership with two Fintech platforms to explore crowdfunding platforms which will channel remittances into productive investments at the local level in Ghana, one of the chosen Fintechs is Pezesha, a holistic financial ecosystem connecting underserved MSMEs with working capital in Kenya.
Under this partnership UNCDF seeks to explore and/or scale up the two Fintechs with the goal of accelerating the process of asset accumulation and access to affordable finance for the creation and expansion of economic opportunities for the beneficiaries while driving financial inclusion and prosperity.
As part of the partnerships, UNCDF is providing technical and financial support for design, rollout and implementation of the crowdfunding platforms, while at the same time monitoring and learning how such platforms can address the impacts of COVID-19 and beyond. This reflects UNCDF’s goal of providing “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
Crowdfunding platforms have become an essential tool more than ever during the COVID-19 period to enable alternative models of access to capital flow to MSMEs in a democratised approach while ensuring a shared economy approach.
This partnership will also see Pezesha set foot in the Ghana market and scale their financial ecosystem platform to underserved MSMEs through a collaborative approach with local players in the market. This partnership also goes in line with Pezesha’s vision of being an enabler through its scalable financial platform by closing the small and medium enterprises (SMEs) financing gap in Sub-Saharan Africa of an estimated $331bn according to IFC report.
Read more on this from the press release by UNCDF here
African Hotel pipeline resilient despite unprecedented challenges
HTI Consulting CEO Wayne Troughtong
Acknowledged as one of the African continent’s leading hospitality investment experts, Wayne Troughton of HTI Consulting shared unique insights in the firm’s first ‘Virtual Hotel Club’ held in early July, a dynamic and informal Pan-African digital platform that saw 295 registrations across 15 countries.
Data was gathered from a survey that covered 14 regional and international operators active in the African hotel space (41 hotel brands and 219 projects currently under development). These included the likes of Hilton Worldwide, Marriot International, Radisson Hotel Group and Accor Hotels, amongst others.
Development sentiment largely positive
According to Troughton, whilst the African hospitality industry is facing unprecedented challenges and obstacles in light of the global pandemic, he noted that development sentiment remains optimistic amongst the majority(57%) of hotel owners as reported by operators on the continent.
“Despite closures and significant performance declines, long-term investment fundamentals for the Sub-Saharan region remain positive despite significant short to mid-term challenges currently impacting the sector,” he said.
“Of a total 219 hotel projects currently In Sub Saharan African pipeline a large proportion (68%) of these projects are proceeding as planned, with only 18% currently on hold for a limited period,and 13% on hold indefinitely.” he stated.
“Concerns amongst hotel owners are, of course, still apparent and, for several, a ‘wait and see’ approach relates to factors such as uncertainty around travel ban lifts in various markets, how to restore guest confidence, and the impact of Covid-19 on hotel valuations. However, the optimism displayed by many owners generally relates to understanding of the sector and adoption of a longer-term outlook,”he explained.
Outlook geared to opening doors
Despite the current environment, construction related businesses in several countries resumed activity as early as possible after lockdowns eased,commented Troughton.
“Encouragingly, this has resulted in 21 projects (representing 2946 hotel rooms in 15 African countries) still expected to open in 2020, with 52% of projects expecting short-term delays of 3 -6 months,” he said. “Longer term delays (9-12 mths or 12 mth+) are typically being seen on those projects that were in earlier (or planning) phases of development,” he stated.
“These delays can generally be attributed to uncertainty around how long travel lockdowns will continue. However, around 30% of projects under construction don’t expect COVID-19 to cause any delays to their ongoing development,” he said.
Hotel owners are clearly taking a long-term investment outlook and are expecting COVID-19 to be largely neutralised prior to their hotels opening. This relates particularly to those in the early stages of planning.
Development pipeline remains healthy
Of the overall Sub Saharan Africa Development pipeline there are 219 branded hotels (representing 33 698 hotel rooms) across 38 markets.
“East Africa remains the region with the strongest hotel pipeline, followed by West and then Southern Africa. East Africa has 88 branded hotels currently in the pipeline, West Africa sees 84 branded hotels in its pipeline with Southern Africa sitting on 47 hotels,” stated Troughton.
Of the 21 hotels total projects expected to open doors in 2020, East Africa (40% of total supply), will see 1,134 rooms come on board, with the top cities being Antananarivo (22%), Dar es Salaam (20%) and Addis Ababa (20%).
West Africa (47% of total supply) sees 719 rooms planned to enter in 2020 across major cities including Accra (28%), Bamako (28%) and Cape Verde (24%).
Southern Africa (23% of total development pipeline) sees 963 rooms planned to enter in 2020, with South Africa – Johannesburg (71%) and Durban (21%) – seeing the predominance of activity, followed by Zambia.
Over the past three months HTI Consulting has engaged in numerous discussions with hotel owners who, Troughton states, have navigated different cycles during COVID-19 from survival (as hotels closed) to cost containment, defining hygiene safety protocols, staffing plans and ultimately, reopening strategies.
As several economies slowly start to open, so too have many hospitality businesses who are remaining positive and committed to the industry and demonstrating the determination necessary to over coming current adversities.
Doing the deals
“Despite pressured economic environments and tough decisions, many hotel operators have, been able to successfully conclude and sign deals with owners during the lockdown period. A total of 15 new hotel deals were concluded by 7 operators in 8 countries, from the period March – June,” stated Troughton of HTI Consulting.
Feedback indicates these deals were close to fruition prior to the COVID crisis, with owners showing strong sentiment to continue with the projects. Further feedback from operators indicates these deals were also typically signed in primary African cities such as Abidjan, Accra, Lagos and Durban that boasted strong and diverse hospitality markets prior to the crisis. These locations are also likely to recover at a quicker rate than secondary nodes, believes Troughton.
“Select operators who indicated that no deals were signed during this period pointed out that opportunities remain rife and that new enquiries are continuing to come through,” he said,
“It is anticipated that a lag will occur, with new owners typically being more cautious and awaiting to see how recovery unfolds,” he said. “Concerns have also been raised by owners around access to finance going forward as well as the willingness of the banks and financial institutions to fund hospitality projects at this point in time,” he continued.
“Whilst we haven’t seen any distressed sales at this point, with banks largely keeping hotels afloat, this may well change depending on the time frames we’re looking at to a return to ‘new normal’ as well as the potential resurgence of the virus in certain areas. The next 2 – 3 months will prove to be crucial, as many hospitality businesses do not have plans in place to ensure sustainability post this period.”
Opportunity sees operators doing it differently
“In several instances, feedback from large operators indicates a distinct shift towards conversions over greenfield development going forward, with a more flexible approach to the renovations and PIP costs.”
“Some operators are viewing this time as an opportunity to finalise forward planning during lockdown,” said Troughton “In several instances they have been able to take advantage of government support during this period in order to ensure they are able to streamline and accelerate internal approval processes, create more flexibility around brand stance, enhance their ability to pitch their products correctly to the local market and offer greater value and affordable experiences along with analysing fee structures over a select period.”
“Whilst lockdowns have placed many hospitality businesses and investors in a stalemate position over the past few months, we’ve noticed a positive change over the past few weeks as more as more hospitality businesses resume activities and we see a significant uptick in the commissioning of hospitality advisory assignments,” noted Troughton.
“It is reasonable to assume that a more cautious approach will be taken by hotel owners and investors in evaluating their investment strategy,” he said.
“Independent hotel owners mayindeed find it more difficult than the larger international brands to weather this current scenario. This too because branded hotels, and their new highly publicised hygiene protocols, may make for a more secure market and therefore allow them to see a more effective bounce-back and recovery.”
“Additionally those markets that are strongest in the area of domestic business travel (and then domestic leisure) should be amongst the first to recover.Indeed, focusing on the local market is what helped Asia recover from the SARS epidemic in the early 2000s.”
“For those owners and operators taking the the time to understand the changing markets we are facing, and willing to adapt to drive new demand, the medium to long-term outlook remains good,” stressed Troughton. “At HTI Consulting we continue to believe in the tourism potential in the region and strongly encourage further support from governments and brand managers to allow owners to minimise further losses and support recovery,”
“Despite current challenges and the overall uncertainty that trouble us all, there will be better times ahead and the travel market will eventually emerge stronger and more resilient. As governments slowly roll back travel restrictions and prepare to reopen society, the future winners are those that build a future based on a strong risk mitigation approach and display flexibility and innovation,” he concluded.
Released by: Kirsten Hill for HTI Consulting
Carbon, Nigeria’s Leading Fintech Releases Its 2019 Financial Report
Carbon co-founder and CEO, Chijioke Dozie
Carbon, Nigeria’s leading digital financial services company has released it’s 2019 financial statements audited by KPMG, detailing its product growth and $17.5mm in revenue
It began operations in 2012 and within the space of six years, it grew revenue steadily, reaching an all-time high of $17.5mm in full-year 2019. In the same year, and expanded its product offerings to the Kenyan market and it’s disbursement volumes have grown from N13bn (2018) to N23bn.
Formerly called Paylater, Carbon pioneered instant lending in Nigeria and was the first mobile app to provide access to credit digitally and without requesting individuals to present the documents and collateral traditionally associated with accessing loans. Earlier this year, Carbon introduced its iOS app and USSD (*1303#) service. It also announced its Disrupt Fund, a $100,000 Pan-African fund to address the lack of capital for African tech startups.
“The company will continue to share it’s audited financials annually, thus upholding a culture of transparency and accountability,” says Ngozi Dozie, Founder.
So far this year, Carbon has introduced multiple new features for its customer base including Carbon Express: a keyboard allowing users to make payments from any social app, periodic investments, free bank transfers, monthly wallet interest, and more.
It also plans to introduce debit cards, a reward program for loyal customers and SME accounts for entrepreneurs, in the months to come.
The full annual report is here.
L’Oréal Appoints Hlengiwe Mathenjwa As Director
Loreal Midrand Manufacturing Plant Director, Hlengiwe Mathenjwa
L’Oréal South Africa announced today the appointment of Hlengiwe Mathenjwa as the new Director of its Midrand manufacturing plant in Johannesburg, effective 1July 2020. A South African talent, Mathenjwa takes the helm of L’Oréal’s first and largest manufacturing facility in the Africa & Middle East region, which includes two other world-class plants in Nairobi, Kenya and Cairo, Egypt respectively.
Hlengiwe’s vast experience in the chemical industry led her to L’Oréal South Africa in 2013 as a Lab Manager before growing to take the lead of the Quality Department. Sharing highlights of her journey, she says: “My time at L’Oréal has been so empowering. Having the opportunity to spend one year at our Caudry Plant in France, specialising in skin care, on a Performance Improvement assignment transformed my career. It was hard being away from my family and adjusting to a new culture.” Upon returning to South Africa Hlengiwe took up the role of Production Manager overseeing the manufacturing of products made locally.
L’Oréal’s South African plant, located in Midrand, Johannesburg, specialises in hair care, skin care and personal hygiene products. It produces a large array of the company’s international portfolio of African Beauty Brands – such as Dark & Lovely and Restore Plus – developed by L’Oréal’s unique team of dedicated scientists and biologists based in South African Research and Innovation Center. Working closely with African hair stylists and dermatologists over the past years, the Center has developed extensive knowledge on the beauty needs of Sub-Saharan Africa consumers, and established L’Oréal as an expert of consumers of African descent on a worldwide scale.
Stretching over around 35,000 square meters, L’Oréal’s Midrand plant employs today more than 150 staff members across different functions, with over 56% female employees, and exports its production throughout Africa, Europe and the Middle East.
“I am very grateful and humbled to be given this opportunity to lead our Midrand Plant. I appreciate the recognition and trust that the company has put in me. I am looking forward to working with everyone to lead L’Oréal Manufacturing Midrand through this unprecedented time and beyond”, concludes Hlengiwe.