— by Reuben Coulter

Faith-based enterprises transforming economies intuitively makes sense but its potential has yet to be realised. Why is this the case?

A recent report by the Legatum Institute “How Nations Succeed”, charted how over the past 60 years some countries have been able to develop entrepreneurial ecosystems which have created a pathway out of poverty. Entrepreneurs in developing countries face enormous challenges to take their ideas to scale—90% of businesses do not grow and over 75% fail within three years. These challenges include: low capacity of entrepreneurs, a corrupt business environment, and a lack of early-stage capital to scale. In many parts of the world, Christian entrepreneurs face additional discrimination and outright persecution because of their faith. 

For example in Africa;

• 80% of entrepreneurs seek mentoring support

• 72% have no formal accounting system

• 57% have no formal business plan

• 83% can’t access growth capital, a $180 billion financing gap

• Trust is low and corruption is high. Kenya is ranked at 137 (out of 180 countries) in the Transparency Index, despite the majority of the population professing Christianity

As a result, the majority of businesses remain informal and at subsistence level, leaving investors struggling to find viable and scalable investment opportunities. In developed nations like the USA, medium sized enterprises contribute the most to GDP and job creation but in developing countries they account for just 16%. This gap is known as the ‘Missing Middle’.

The Goldfish Principle

Take the example of Elon Musk. He is an extremely successful South African innovator who has founded Paypal, Tesla, and SpaceX. However, if he had remained in South Africa, without the skills, capital, and markets of the United States, it is unlikely that he would have achieved as much. He is undoubtedly a brilliant entrepreneur, but his environment has had a vital role in enabling his success. He would have remained a large goldfish in a small bowl.

For faith-driven entrepreneurs to succeed in creating jobs, generating prosperity, driving innovation, and catalysing human flourishing, they need a vibrant entrepreneurial ecosystem. This involves cultural renewal, discipleship and mentoring, community building, access to expertise, and aligned capital.

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