Supporting jobs and creating employment has a high social value. It’s easy for anyone to understand how your life would change (although for some, only momentarily) if you got sacked, or couldn’t find a job after finishing your degree. I mean, you’re still pretty good off if you’re born in a Western society with a solid social safety net. But losing your job, or not getting one in the first place, has an even bigger impact on the life of an East African individual.
That’s why using the ‘No of employees’ when choosing who you lend to, can have a substantial social return. Take Kitara Model S.S.S for instance, open for bids right now, a school with 25-50 employees with higher education. That would rank high on my personal priority list.
But more generally, let’s have a look at this as a statistic metric: Which countries and providers are generally performing best on supporting jobs?
Most employment has been created in Kenya and Uganda when observing the totals – quite obvious since a large proportion of the total MYC4 portfolio has been (and still is) centred here. But comparing to the number of loans disbursed, the picture is quite different:
In terms of average supported employment per loan, Premier Resource Consulting (PRC) in Ghana is the top scorer every year. This is widely related to the fact that PRC specialises in small business loans (i.e. larger loan sizes), as opposed to Tujijenge Uganda mostly supporting micro-scale farmers. In other words, the above numbers should be seen in the context of the market that the provider specialises in. Also Gatsby (Uganda) in ’10 and BELITA (Tanzania) in ’11 performed quite well on employment per loan.
My ever returning point: Always look at the indicators as combined, never judge a loan solely on one parameter. And if supporting employment is high on your priority list, the above charts can give you an overall guideline. Remember that you can find this data yourself on each loan by looking at the details in the business background.
Please note that employment has not been registered sufficiently on the MYC4 platform until a major system upgrade was made in late 2009 which is why only the latest 3 years are analysed in this blog post.
Sometimes when I read this blog I have the feeling that information and data has been used too selective and with too little analyses and therefore not useful for me.
Also this time. If I wanted to support employment I would rather consider how many people my money can support and then I would be interested in number of employed pr euro. And if you compare the Kitara project to those following, there is not that big difference. And if there is a difference it might be for a reason. How should wholesalers be judged? They will often in some way support several smaller shops although it often is a one-man business.
If MyC4 gets more capital for development, I would very much like a tool to select on many different factors like the employment, size of investment, several different branches at the time etc. etc.. Also a specific choice should be possible to open easy next time you look at Myc4
Many greetings Erik
Hi Erik,
Constructive feedback as usual, and good observations. I can only say that I agree with your ‘employment supported per euro invested’, very good idea. I will use that in a future blogpost.
For the ‘indirect’ jobs supported, like wholesalers supporting the retail sector, I agree with you as well, though I deliberately avoid making estimates due to the implied uncertainty. But of course, this parameter can have great social value too.
Thank you for the comment.
- Rasmus
[...] warm thanks to Erik Dam, who gave constructive feedback on my last blogpost ‘How’s employment on your priority list? – Statistics‘, which you can read here. Rate this:Share [...]