INIE: Promoting and Developing Entrepreneurship in Côte d’Ivoire

Interview with Yves Yakayoro, Adviser to the Director General at INIE (Institut Ivoirien de l’Entreprise)

Let’s start by introducing your institute. Let’s talk about what your main sectors are and what you do exactly. Could you present the INIE, what it is comprised of and what are your aims and actions?

INIE is the Ivorian Institute of Entrepreneurship and it was created in 1997. Its objectives are to promote entrepreneurship, to keep programmes running which guide entrepreneurs, to work alongside and promote business of existing SMEs.

What actions do you take?

In terms of concrete actions, when a young developer has a project, they come to INIE who will help draw up their business plan, so they do not have to do it alone. INIE works alongside them with this plan and deems whether it is feasible or not. Following this, INIE can assist in researching financing by presenting these plans either to buyers, micro-financial institutions or banks interested in this kind of project.

What kind of route are you taking?

INIE is also for developers who already have their own SME and it gives them access to training. This training reinforces their management capability. Essentially, it also reinforces their employees’ capabilities. In that sense INIE can find them different partners and allow them access to training. The work of INIE is paediatric and in that sense it takes care of existing SMEs and acts like a midwife who helps give birth to new reliable SMEs. Those are our main aims.

What success stories do you have and what are the main things you have achieved?

Since 1997, when INIE was created, following the successive crises we have been through in Côte d’Ivoire, INIE has not really had the time to shine. It was only after the latest post-electoral crisis that INIE was restructured to fulfil its role. One of the first tasks to be carried out was to identify SMEs. This is still being carried out and it still needs to be finalised. Besides this, in 2013, the President of the Republic hurried through an advisor to the head of INIE, notably an advisor who was in charge of SMEs. Since 2013 we have put in place a new approach. A new business model has been developed enabling new SMEs to be set up in all regions of Côte d’Ivoire with the aim of boosting the web of SMEs in the centre of the country. Until now, the web of SMEs has been concentrated in Abidjan and San Pédro, coastal cities and in Bouaké, one of the cities in the interior of the country. Today, INIE’s objective is to allow a development of a significant web of SMEs in all regions and cities of Côte d’Ivoire.

We have identified six industries within these three business sectors to respond to the needs of all the regions in Côte d’Ivoire. These industries are, in terms of primary activities, hydroponic cultivation of tomatoes and fish farming. In terms of secondary activities we have tomato processing and the production of cashew nuts. In terms of tertiary activities we have the recycling of household waste and analytical laboratories. Those are the six industries we have identified. That is why INIE is moving into the regions of Côte d’Ivoire. With the regions we have sealed a partnership so we can create a CPME in each region in these different industries.

Who are you partnered with?

The Assembly of regions of Côte d’Ivoire who has appointed a third of the Regional Council’s presidents in Côte d’Ivoire.

You have means and assets; you have a new approach and plan of attack. You also have resources. How do you find associations to assist you?

We have a subsidy from the State but to be able to carry out these projects it is not just the subsidy which funds us, as these projects are not philanthropic: they are to do with business. So we are in the business world and in the logic of getting results. So we have naturally adopted a business approach. We have approached the banks who said it was necessary to have a guarantee fund to set up the projects. So we went to the regional councils. The council presidents validated this model and told us we could rely on this guarantee fund. With these guarantee funds, banks will give us loans so that these SMEs can be set up. These are loans which will be repaid – it is not just the subsidy from the State which simply allows us to do it. We are in the process of approaching the State so that it can equally support us with these guarantees. It really is a business approach; it is not a philanthropic or a social approach or action.

Are there examples of projects you have already put in place?

Apart from this business model, INIE has put in place pilot sites. We put a site in Bonoua not far from Abidjan, and we have already been able to test the viability of this SME. We therefore have sites for tomato and fish farming SMEs. Concerning cashew nuts, we have a partnership with a developer, so we are in the process of putting in place the pilot SME for that. However, the pilot sites we set up have shown us that it is just the reliable businesses which we need to choose. It is that above anything else. We have taken businesses which have already proven themselves in Côte d’Ivoire and from now on we will work alongside them with professionalism and within a strict, quality framework.

So it is a project which you have up and running and you want to reproduce it in different regions?

You have just precisely described our business model. With this model we carry out studies and the business plan is approved by academies of international standing. Then we set up pilot sites to confirm the hypotheses stated in our business plans. We are putting in place a financial structure in the regions which is required by the banks and the public. Afterwards, we select the developers and then with all our partners, developers, regions and the banks, we duplicate our model by what we call multiple cloning. It is cloning the pilot site into all the regions of Côte d’Ivoire.

Can you reveal any information about potential new investors?

We are in discussion with quite a number of new investors. It’s too early to reveal anything, but we are focussing a lot on institutional investors. One name I can reveal is IFC, International Finance Company. We are discussing the business model and I am sure that they would be inclined to enter as soon as we develop our partnership and our business model.

Who are the developers?

The developers are very important and it is they who head the projects. These projects do not belong to INIE. The selected developers manage businesses and as they are doing so, will repay the bank. At the end of the reimbursement process, the SMEs are returned to them. The SMEs do not belong to INIE. INIE just encourages the process.

Was it a business model which was created afterwards?

It is the business model of Côte d’Ivoire and Côte d’Ivoire is the first producer of coffee and cacao. It is not a multinational company who has set up in Côte d’Ivoire and produces coffee and cacao…

You spoke of coffee and cacao but what about the areas you work in?

It is a model we built. We rely on the reality of success stories in Côte d’Ivoire. The success stories which are due to the excellence within Côte d’Ivoire, includes cacao production. We are the first cacao producer in the world and we have examined the process of how we could get there. We realised that in reality, the way the farmers trade their produce is the equivalent to that of the SMEs. It is simply because these SMEs which we are launching in Ivorian territory will consequently allow us to produce. So by looking at that process, it enabled us to draw up our own model. We have put it in place taking into consideration the situation we are in today in terms of guarantee funds, strategic and technical assistance. We have developers to help us with the technical aspects of our approach.

Can you export this model to those who are interested in this process?

Why not? We have had meetings at different levels. We had a meeting with the association of bankers in Côte d’Ivoire, we have had meetings with the SFI (International Financial Society), who explained to us that we have a new, commendable method which should be trialled to obtain the first set of results. They also said that it could be exported, as you mentioned.

Is there any potential for international relations? Are you open to international involvement?

We are open to international contributions. In the first instance, financially, as it is a model which means that the SMEs we put in place will end up on the stock exchange. When the SMEs experience enough growth to go on the stock exchange, there is international interest and even international financial partners then participate in helping SMEs transform into large businesses.

So what happens if an international investor is interested in working with you in the agricultural industry? How do they come and manage it?

Let’s take regional examples. We have 33 regions in Côte d’Ivoire. When we talk of putting in place SMEs for tomato production in every region, that will be 33 SMEs established. An investor can come and say they are interested in your programme for the production of tomatoes, as I myself would like to export tomatoes. I do not want to run the risk of them affecting Côte d’Ivoire, since the regions are already involved, but I would like participation. We are open to that. It enables the investors’ activities to be boosted in our country and then they could set themselves up in that industry.

Will that be just in one industry?

It is up to them to choose which industry they are interested in but it has to be one of the industries we offer.

So we will see if people are interested in going into those areas.

If there is consistency in the industries in which foreign investors want to invest and which also comply with this SME model, because INIE is only for SMEs not for big businesses. Therefore in line with this model we are able to assist them in drawing up a business plan and help them set up this SME, as we are interested in the end result which is the creation of jobs and profit.

And so you assist them and they can come and set up in a field which they do not know too much about. How is it funded- do you assist them with this or do they need to get a loan?

Our approach these days is that when more investors come to us, we have more financial options. If they join us in the guarantee fund, we are able of mobilise the funds for them. These funds come from various banks in Côte d’Ivoire.

What major challenges do you face?

The major challenge for us these days is the objective of becoming an emerging country. So in 2020, the minister of business who is in charge of the SMEs put the action plan in terms of figures. It is a question of going from 60 thousand SMEs to 120 SMEs in 6 years. This means 60 thousand more additional accounts to be created in 6 years. This represents on average 10 thousand SMEs per year which will be a real challenge. It will be necessary to set up a strategy able to respond to this challenge. This is the big challenge we face today. This goes side by side with the objective the minister in charge of the SMEs defined.

So will you achieve this objective?

We will have to wait and see. It is a question of approach. We believe that if there is involvement from the regions and towns in Côte d’Ivoire, we can reach these objectives. Today the problem we have in setting up SMEs, is that developers who come here with their projects are on their own. INIE has stopped assisting them as INIE alone cannot welcome ten developers all at once. However, with the involvement of the partners we have identified who are able to welcome a certain number of developers, who can assist, motivate and act as a guide for these developers, we believe we can reach this objective.

What is your vision mid-term and what do you envisage in three years time? What would you like to have achieved in the ideal scenario?

We have already explained our business model. You must realise that the SMEs were created as part of a group and not on our own. We guided these groups of SMEs by bringing in an engineer who sat above the groups to ensure they are supported. So in three years time, we see INIE as a generator of GIE (grouping of economic interest) which enables 200, 300 or even 500 SMEs to exist autonomously with a developed system where the longevity of an SME does not pose any problems. Nowadays, banks fear the reason for them not assisting developers very often. More than 60% of initiatives taken in terms of establishing an SME, experience failure in the following three years. So if in three years we are able to meet this challenge to restore confidence between financial institutions, developers and SMEs, it would a big accomplishment.

In all the countries worldwide there are businesses being set up. The figures in Côte d’Ivoire are comparable to Europe…

When we speak of 10 thousand SMEs a year, we would like to ensure that these 10 thousand SMEs last. It is not enough just to create 10 thousand SMEs. Nowadays, an organisation such as the CPC who is in charge of mobilising investments in the Côte d’Ivoire has a unique way of creating businesses. The CPC appears, in the latest statistics of the year, to have set up 8 thousand SMEs, but the question is how many of these businesses will survive the next three years. So the challenge is to make sure that these businesses last- not just to simply set them up.

What message would you like to give to investors or businessmen? What competitive edge does Côte d’Ivoire have?

We are just emerging from ten years of crisis and we need to restore confidence in our partners who are various investors. Nowadays, we need to present ourselves as being financially astute, but equally present strategies which can respond to their aspirations as an investor. Côte d’Ivoire is becoming a desirable country. The proof is that the AfDB (African Development Bank) moved its headquarters back to Côte d’Ivoire. Opportunities are there and were established under the presidency of Alassane Ouattara. So nowadays our investors need have no worries in terms of security.

Now there are institutions which are ready to assist them. INIE in particular offers a guarantee fund which allows any investor to come and set up their activity by way of these guarantee funds. However, these are activities in partnership with Ivorian developers. There is therefore this opportunity and we want to launch another appeal. We want to launch an appeal in particular for the Ivorian diaspora who have experienced a lot of deception by sending investments to relations and who used it for other things than for what it was intended. Nowadays there are projects which can be run by professionals who can optimise their investments and increase their profits. They can therefore come to INIE who will set up viable and reliable SMEs.

 

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