My stop in Egypt

Second stop: Egypt!
Visiting Egypt, my first reaction was to assess the entrepreneurship situation, before looking into the social sector. I met business organizations and VC investors and asked them questions such as: do people like to take risks and start ventures in Egypt? How is the innovation process? How do you evaluate the deal-flow and the start-ups?
“The informal sector is very big in Egypt. In this sense, we have a large number of micro-entrepreneurs; some of them are very creative “says Amr Rezk from Pylon Holding. “Interesting initiatives and good deals do exist but they are very scattered. There is no established ecosystem”.
Moreover, part of the society view businessmen with suspicion, especially after the collapse of the Mubarak regime, where many of them were involved in corruption.   An assessment that I also found in the Economist:”Economic liberalization has a poor reputation, thanks to reforms earlier this decade whose fruits flowed largely to the well-connected. Indeed, a desire for vengeance against fat cats helped to bring the crowds onto Tahrir Square” (The economics of the Arab spring: Open for business?)
I made very interesting discoveries when I stepped in the social innovation world in Cairo:
Hot spot for social entrepreneurship: Cairo appears to be the capital of social entrepreneurship in the region. Ashoka Arab world has its office there with about 55 fellows (40 of them are from Egypt). Nahdhet el Mahrousa, the first social incubator in the Middle East, has been active for 8 years , supporting and developing social ventures in the areas of youth development,  health services,  environment, linking education to employment etc.
Success stories: I discovered several sustainable social enterprises in Egypt. Many are non-profit but some of them are adopting a model close to what social impact investors are actually seeking:
·   Magda Iskander  (who I later met in the Paris Ashoka Changemakers Conference) is creating the profession of home healthcare in Egypt and training a cadre of providers to offer high-quality and affordable services to the eldery, while creating new jobs;
·   Maged Hosny is providing career counseling to high school and college students to better prepare them for the realities of the labor market;
·    Sameh Seif Ghali received a $250000 investment from Siemens to start implementing his business model of installing a low-cost, effective community-based sewage system in the villages.
These successful initiatives raise other questions: Do these entrepreneurs want to take it to the next level? Do they have the ambitions, the skills and the capabilities to scale up and to attract investments?
“Many of our fellows are more comfortable with donors and writing proposals than with business plans and investors” says Iman Bibars, regional director at Ashoka Arab World. Ehaab Abdou, co-author of the Social Entrepreneurship in Middle East report, is working on the feasibility of a “replication fund”. It would be a mechanism that identifies successful social enterprise models, assess them and mobilize technical support and funds from donors and investors. We hope he can help answering those questions.
BoP opportunities: Egypt is a relatively large market in the region. It is the most populous country in the Middle East and the third-most populous on the African continent after Nigeria and Ethiopia, with a population of nearly 83 million.  Almost 45% of the Egyptian population are in the range of extreme poor to near poor. Therefore, social ventures targeting low-income communities would have a market of almost 40 million people. Those tackling urban issues would have a market of about 15 million in the mega-city of Cairo. BOP opportunities and room for high social venture growth do exist, in contrast with other countries of the region like Jordan, Lebanon or Tunisia.
Hatem Mahbouli

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