How Nairobi Became a Hub for Social Entrepreneurship

Bloomberg Businessweek has a gripping profile of the young entrepreneurs, mainly based out of the Kenyan capital of Nairobi, who are helping bring business and societal benefits to the African continent.

Stephanie Koczela arrived in the San Francisco Bay Area in 2010, when everyone was moving fast and breaking things. She had been working for the microlender Kiva in Nairobi, Kenya, and transferred to the company’s South of Market headquarters to build its global field operations. For an ambitious twentysomething with an interest in development issues, it seemed like a dream job. The work was engaging, but Koczela was miserable. She longed to be back in Nairobi, where expat entrepreneurs were launching startups of their own.

In Africa, “you are surrounded by people that are living a very fun, very hard life,” Koczela says. “You are working from 7 a.m. to 9 p.m. at least. Most people are working to 1 a.m. to make phone calls back to the U.S. If you text someone at 10 and say, ‘Do you know how to do this Excel calculation?’ they will call you right back.” Koczela expected that same camaraderie in San Francisco but found it had been more vibrant in Nairobi.

Koczela packed up and returned to Kenya, where she co-founded Penda Health, a chain of for-profit medical clinics. She’s one of a few hundred mzungus—foreigners—in their 20s and 30s who have come to Nairobi to build social enterprises, which are for-profit but aim to improve the lives of their customers and bring about social change. They’re selling solar panels and vegetable seeds, setting up schools, and, like Penda, opening health centers. The chain’s two main clinics each see about 1,000 people a month, making money one $6 patient visit at a time. With its facilities getting close to breaking even consistently, Penda is gearing up for a Series A round of financing next summer. …

According to a survey by J.P. Morgan (JPM), so-called impact investors—those who fund companies they think will create financial returns and societal benefits—put $10.6 billion into almost 5,000 companies worldwide in 2013. More than half allocated money to sub-Saharan Africa, the most of any region in the world. A preliminary study by Open Capital Advisors, a Nairobi-based consulting firm, estimates that $650 million has been invested in Kenya alone, mostly in the last five years.

Read the full story at Bloomberg Businessweek.