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FAROUK JIWA

Kenya,

Honey Care has doubled the income of several thousand small scale farmers - they are trained in commercial beekeeping and then Honey Care buys their honey at a guaranteed price. Highest quality African honey is assured upon packaging by the organization.

This profile below was prepared when Farouk Jiwa was elected to the Ashoka Fellowship in 2009.

INTRODUCTION

Farouk Jiwa, frustrated with the inefficiency of traditional development models, combines business savvy with NGO’s skills in outreach and training to transform small farmers into diversified business owners, while building one of the largest social enterprises in Africa. Through Honey Care Africa, Farouk has shown how to sustainably increase the income levels of farming communities throughout East Africa. He does this by using bee keeping to help small and subsistence farmers supplement their income but more importantly, by pioneering a joint way forward for businesses, development agencies, and rural communities. Because of this multi-sector approach, Honey Care now provides a comprehensive package of services, ranging from training to start-up financing, technologies and market access.




THE NEW IDEA

By establishing a win-win partnership model between actors in the private, public, and citizen sectors, Farouk has successfully defined a way to integrate market driven business processes with community-based development approaches to create a secure and sustainable means of improving the livelihoods of rural farmers.

Farouk saw that if development work was to start taking on a market based approach, then the private sector needs to play a more active role in the development space. He realized however that the profit driven nature of business in the private sector makes it too risky for private enterprises to actively participate in development. High interest rates of up to 35 percent and monthly payments make current equity financing models unsuitable for social enterprise. Faced with this challenge, Farouk went on a search for alternative equity financing models which led him to seeing the opportunity in partnering with civil society organizations to provide Honey Care Africa with the kind of capital it needed. On its part, Honey Care Africa would provide inputs, training and extension support to farmers in addition to a year-round market for their produce. When the capital investment is paid back in full to the civil sector organization, it then has the option of using the same model to reinvest the same money in developing a different community.  

Farouk’s model for social enterprise has been foundational in paving the way for private-social partnerships in the continent. He established a creative way for private sector organizations to access the cheap and patient capital they need to engage in development work but at the same time and using the same model established a more sustainable approach to development for civil society. Ultimately, the rural farmer stands to benefit the most from a more sustainable source of livelihood. 

 




THE PROBLEM

Over 80 percent of Africa’s population depends on farming for its livelihood. Of this, less than 5 percent engage in commercial farming due to a lack of access to credit, land, farm inputs, technology, and expertise. Most farmers cultivate on less than 2 acres of land and live on less than $2 a day. Therefore, despite abundant human and natural resources, farmers on the African continent are caught up in a subsistence trap with little hope of improving their circumstances.

The public sector and civil society both continue to address these challenges but with varying levels of success and in the face of significant challenges. Most government interventions are created to increase access to credit through microfinance schemes, to provide access to farm inputs and technology and to provide training and support through extension workers. However, these interventions, although good, are mired in corruption and marred by inefficient delivery systems, ineffective land policy frameworks, and commercialization of the microfinance model which makes access to credit virtually impossible for most rural farmers. On the part of civil society, most still apply a hand-out or aid based approach that does little in ensuring sustainability and community ownership. Another limitation of civil society interventions is that most are grant-driven, time-bound projects which always come to an end sooner or later and often leave the beneficiaries dependent and in the same circumstances they were in before the intervention.

Sustainable development work has traditionally been driven by the public sector and civil society with the private sector only playing a philanthropic role. As much as this is the case however, the development world has been undergoing a rapid transformation in pursuit of a more sustainable and competitive approach to social development. It was in pursuit of this new paradigm that the concept of social enterprise was born, an approach that applies basic economic and market based principles of supply and demand in the development space. It is vital that the private sector plays a more proactive role in social development, a reality that is currently far from true today. The private sector has skills and resources which, if properly leveraged in win-win partnerships with both the public sector and civil society, would go a long way in boosting the rate of success and level of sustainability of development interventions.




THE STRATEGY

Farouk sought to develop a market-based development model that creates economic, social, and environmental value to all stakeholders. Cognizant of the constrictive circumstances farmers faced in numerous existing public sector and civil society interventions, Farouk decided to create an integrated approach that leveraged the strengths of all sectors to create social transformation. He saw bee keeping as an activity that neither required a lot of land nor put pressure on the environment - on the contrary, bees as pollinators contribute to the wellbeing of surrounding flora. As such, bee keeping seemed like a practical and viable activity in which to engage rural farmers as a compliment to other farming activities. Farouk then went on to establish Honey Care Africa as the private enterprise that would manufacture bee hives, sell them to farmers, train them on bee keeping, provide them with support, and buy the honey they produced year-round.

Farouk believes that in order for the beneficiaries of any development intervention to value it, they need to invest in it. When developing the foundation for Honey Care Africa, he came to see that handouts and free aid only fueled more dependence. He therefore made it a requirement that the rural farmers who wanted to engage in bee keeping through his program had to contribute a portion of what was needed to buy a bee hive and launch their business. To help the farmers cover the remaining portion of the initial investment capital, Farouk established a creative partnership model between his private company, Honey Care Africa and civil society organizations already working with rural farmers in the community. Through these partnerships, he advocated for and got the development organizations to embrace a cost sharing approach to creating change where both the community and development organization contributed to the successful implementation of development initiatives. It is with this new paradigm that the development organizations put up the remaining portion of the required initial investment on behalf of the farmers in the form of unsecured and interest free loans,. The repayment of these loans was managed directly by Honey Care Africa on behalf of the farmers, in effect eliminating the risk of defaulting by farmers while at the same time a allowing them the room to focus on their farming without having to worry about managing timely and regular loan payments Through this innovative model, Farouk created a way for a civil sector organization to invest in the development of one community, get its money back and invest in another community. This in a sense created a revolving fund for the organization that allowed it to be more sustainable and to leverage its impact further.

Unlike development agencies that run time- and budget-bound projects, Farouk has built an organization that aims to create long term and sustainable change in the communities it works with.  To provide training to farmers, Farouk developed a two and half day training module on bee keeping that was translated into several local languages and has since been adopted by five agriculture training colleges around Kenya. Realizing the need for ongoing technical and advisory support for farmers on the ground, Farouk decided to establish a network of well trained extension workers. Cognizant of the already established but ineffective network of government employed agricultural extension workers and seeking to maintain good relations with government officials, he chose to train and integrate 650 of them into his network of extension workers.  Many of the disillusioned government employees were reinvigorated simply because they had the chance to work more closely with the young, energetic and dynamic people from the farmers’ communities that made up Farouk’s network.

Having established a way to stimulate and aggregate production of rural farmers from all parts of Kenya, Farouk needed to establish an equally comprehensive means of collection and payment. He therefore sought to take the factory and the bank to the farmers as opposed to the farmers having to transport their honey to Honey Care. He developed mobile factories that were assembled on site in the farmers’ communities to collect honey. The farmers were paid in cash for the amount of honey they delivered. If a farmer still owed some money on their bee hives, a portion of their payment would directly be diverted to the loaning development organization by Honey Care Africa.

As one of the leading local private enterprises in Kenya, Honey Care has marketed and distributed its honey products all over Kenya to become the preferred local brand of honey in the country. Honey Care Africa and is currently looking to extend distribution into foreign markets in the United States and Europe. Farouk works with farmers from 12,000 households from all provinces around Kenya. He has established numerous collection points which he plans to turn into distribution points as well so farmers can also have access to the processed and packaged product. In 2004, Honey Care Africa expanded its frontiers into Tanzania to form Honey Care Tanzania. As a result of Honey Care’s success, over 13 different local brands have sprung up to compete in a market that was originally monopolized by foreign brands.

Having proven that his approach can take root and transform the lives of poor farmers and shown the way in which development agencies, private businesses, and the government can participate as well, Farouk is now focused on transforming the way in which these different but complimentary sectors contribute to development by promoting a multi-sector market based approach to alleviating rural poverty.




THE PERSON

Farouk is a fourth generation Indian who was born, raised and educated in Kenya. He was educated in Kenya before pursuing further studies in several universities around the world and ultimately receiving a Masters in Environmental Studies from York University in Canada.  Farouk’s family owned a handicrafts business which was badly affected in the aftermath of the bombing of the American Embassy in Nairobi because it depended a lot on the once steady flow of tourists into Kenya which had declined drastically. This turn of events went on to redefine Farouk’s destiny.  

Instead of returning to run the family business after finishing his studies, he returned to Kenya but joined and organization called Frigofarm where he worked with over 25,000 farmers in an outreach project funded by the Aga Khan Foundation. It was here that he was exposed firsthand to the inefficiencies of traditional development models. After a failed attempt at trying to integrate a market based approach into the development model at Frigofarm, Farouk resigned and set out to start his own social enterprise, Honey Care Africa, in 2000.

After five years of building Honey Care Africa into one of the leading social enterprises on the continent (and while retaining his role as board member and advisor), Farouk moved on to join CARE when he was presented with the opportunity to use a position in the organization as a platform to spread his business-oriented approach to local development on a global scale. While at CARE, he helped set up Care Enterprise Partners, a social venture capital unit of CARE Canada that seeks to create lasting solutions to poverty through market-based approaches designed to unleash entrepreneurship in emerging economies. Again seizing on an opportunity to change the civil society sector from within, in September 2008 Farouk took up the position of Senior Regional Technical Advisor in the Economic Development Unit at CARE USA and still today provides technical support and program quality advice to a number of economic and value chain development projects being implemented by CARE in Africa and Asia.

Following his success with Honey care Africa, Farouk has received global recognition for his entrepreneurialism and the impact he has had on tens of thousands of farmers across the continent. An award he has received among others includes the “Most Outstanding Social Entrepreneur” award by the Schwab Foundation. He is also engaged in advancing education of social enterprise in various capacities and with various institutions around the world including a guest lecturer status at a number of universities and business schools across North America and Aga Khan University in Africa.  




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