Pictures from Senegal

Wednesday, March 23

Investment Talk

Money in the Market
What is an investment? Where I live, it means spending all your money as soon as you get it so as to avoid the possibility of giving to someone else. For if someone was to ask you for money, and you had it, you would need to give it to them by rule of Senegalese (and West African?) culture. Instead, you should buy something for yourself or the house as soon as you receive the funds. This way you’ve bought the cement, for example, needed to build that wall you’ve always wanted. Granted the cement is only the first step because you also need sand delivered and the labor to make the blocks… but it’s a building block (pun intended). You’re now one step closer to having your dream wall thanks to the investment.

Now you can imagine how it can take more than ten years to build a new home. But how does a person buy a big ticket item like a car? There are loans available from formal banking institutions; the fees are outrageous but it’s doable. Or some women participate in a savings group called a tontine where each month the women bring a set amount and one of them gets to take the whole lot home. They take turns giving each other the big windfall until everyone’s had their chance… and suddenly they’ve all been able to save the same amount.

Given what I know about the investment system in Senegal, it’s been a bit hard to broach the subject of investments with my work partners (who happen to be small business entrepreneurs). We’re talking about people generally too small to have banking accounts or access to formal lending. There is no small business tontine available for sensible minded entrepreneurs (though I really should look into sparking one of those, huh??). And there are way too many incidents of successful businesses crippled by family members who stake claims to earnings for personal needs… as opposed to those funds going towards sustainability of the success or (gasp) future investments.

I realize it’s making us all uncomfortable to think of mixing business with friends and family. You’d never allow your sister to be the cashier and afternoon operator at your boutique. But the African lines can become so blurred… and it’s a shame that embezzlement isn’t even in the dictionary. Given all this, I need to work very hard to help my friends (I mean coworkers) overcome the challenges associated with investing in the profitability of their businesses.

The other day I was sitting in the shop of a friend, having just stopped to say hi, and a conversation sparked. It was a game changer. It started when I noticed a new set of plastic chairs around one of the tables.

Resto Porokhane
Me: What other improvements have you made?
Aida: See these new tables in the back? And those shelves were purchased last week and we’ll hang them on the wall as soon as the carpenter is free.
Me: What other ideas do you have planned?
Aida: Well eventually I want to get a refrigerator before the hot season and tile the floor before the end of the year. Next year we’ll repaint the walls. Also, my artistic son is in charge of the decorative artworks that we display.
Me: Are you saving money?
Aida: Yeah, I put some of what’s left over at the end of each month into buying new things. And I leave about $40 in my bank account for emergencies.
Me: Is there a specific amount that you set aside for new things? Or does your investments depend on what profit you have left over?
Aida: (After much clarification of the above question) I use whatever profit is available after I’ve made my gross purchases for the next month.

New Table and Chairs
From this point on I launch into an “idea” I had about how to make sure she had enough money to lay tile in December. If we believe the project will cost $200 and there she saves $20 from March through December she will have enough for the project. Now she views the investment as a specific number rather than a residual of profit.

Aida: So I can make sure I will be able to lay the tile in December because I will try to always have $20.
Me: Right. Otherwise you might $15 this month, $18 next, $21 the month after and so on… you might not have enough for the project if you aren’t aware of the goal. 
There was this smile coating her entire face and look in her eye that said she couldn’t wait to put her first $20 in the bank account. So this simple conversation was loaded with investment talk and I’m pretty sure it left a mark. I mentioned a book I had with relative African examples on the subject and she’s reminded me twice to bring the book next time. (Note: I purposely keep forgetting to gage her level of genuine interest. Third time will be the charm!)
I’ve got a few other tricks up my sleeve, too. You may recall my ranting about a certain creator of fine leather products and some of his recent business successes. Well, before this glorious artisan expo (monumental sales extravaganza- is what it should be referred to as) it occurred to me that a large windfall could and should be put to investment use. But, if I didn’t act fast to promote my cause I’d be out of luck when family came calling for their share of the pie. So I started the conversation like this:

Me: You know, if all goes well, you’ll have a lot of money from this expo. What do you think you’ll do with it all?
Demba: Well, I want to change a few things around here.
Me: Great. Like what?
Demba: I want to build a stock of finished product and raw skins. That way I don’t have to keep asking for advances for each order. I can just make things for your friends and get the money from you after they are delivered.
Me: Yes, that would make everything a lot simpler. What else?
Demba: I want to rebuild the outside awning and trim… and then repaint our name and logo. I also want to put up a new sheet wall with a sturdy wood mounting to separate the stock in the back from the work area and shop in the front.
Me: Those are awesome ideas. Do you know how much they’ll cost?
Demba: No, but I could find out.

The next week I went back and he had made a list of all the materials needed and their costs, including labor for the things he couldn’t do himself. We had a quick discussion to confirm that he saw this bottom number as a goal to bring home from the upcoming expo and I crossed my fingers. 

After: New Awning and Wall
And low and behold, a month later I returned from America to find a rather large pile of raw hides and a brand new front awning with fresh paint. The curtain/ wall assembly was under construction; to be revealed a few months later. In addition, Demba hired a 2nd apprentice and was able to attend the big religious pilgrimage this year. Best of all, and my proudest moment as volunteer (yes, I was recently asked) is that I no longer have to collect or front advances for orders placed by fellow PCVs. Demba ranks in a new class of entrepreneur: one who needs a bit of training on appropriate stocking and liquidity of assets. 

The investments, and talk of these things, continue!

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