This week, the African Innovation Foundation (“AIF”), an organization whose purpose is to “to increase the prosperity of Africans by catalyzing the innovation spirit in Africa,” announced the finalists for its annual Innovation Prize for Africa (“IPA”) award.  Started in 2011, the IPA award serves to “honour[] and encourage[] innovative achievements that contribute toward developing new products, increasing efficiency or saving cost in Africa.”  Two of this year’s finalists have developed innovations that take on the issue of access to capital, the lack of which continues to be one of the most significant challenges to sustainable development on the continent.

Developed by Alex Mwaura Muriu, Farm Capital Africa is a crowdfunding investment platform that “identifies, screens and shortlists full-time farmers with small holdings and helps them devise farming plans to attract potential investors who earn profits over time.”  Smallholder farmers are responsible for the vast majority of farming activity on the continent but private commercial banks and other lenders have proven reluctant to extend financing to these potential borrowers.  The reasons for this reticence include geographic inaccessibility, a dearth of financial as well as vital records for establishing a credit history, and a lack of collateral.  Expanding the financing options for smallholder farmers is critical to the African agricultural sector which, in the coming decades, will play a pivotal role in the region’s socioeconomic development and global food security.

Leveraging the explosive growth of mobile technology on the continent, Kyai Mullei has developed M-changa.  Also a crowdsourcing platform, this mobile application  “allows users to solicit support for a cause, track contributions, and withdraw funds using their mobile phones without relying on internet connectivity.”  The app allows people to source funding for business enterprises but also medical treatment, educational services and other causes that span the range from personal to small-scale to broad-based impact.  This model addresses what The Bill and Melinda Gates Foundation, Kenya Financial Sector Deepening, and other experts have observed about the financial lives of the poor which is that “access to the right financial tools at critical moments can determine whether a poor household is able to capture an opportunity to move out of poverty or absorb a shock without being pushed deeper into debt.”  This app has the potential to make the difference between managing poverty versus creating wealth.  It also is no coincidence that the app is known as E-harambee.  The official motto of Kenya, harambee is a Swahili word that translates to “All pull together.”

Muriu, Mullei and the other finalists have done impressively well to be selected from a record pool of over 900 applications from 41 countries.  The award ceremony will be held on 12-13 May in Morocco, which is a partner, host, and patron to this year’s IPA award and itself is quickly becoming one of the region’s innovation hubs.  Regardless of who ultimately receives the three cash prizes, the IPA award is an important platform for showcasing the indigenous innovation capabilities across the continent.