How is elea supporting entrepreneurs during the global COVID-19 crisis?
elea invests in entrepreneurial initiatives that fight absolute poverty. Our perspective onto the global COVID-19 crisis is largely shaped by the implications it has on emerging markets and our beneficiaries at the base of the pyramid. We have adapted the way we work while simultaneously intensifying our financial and strategic support to our entrepreneurs.
High density living in South Africa
How COVID-19 affects emerging markets
Implementing effective measures to contain the COVID-19 disease is confronting countries and communities all over the world with unprecedented challenges. Governments are imposing extensive emergency measures to fight the virus. The more countries and societies suffer from institutional deficiencies, the less effective such drastic measures are going to be in curbing the spread of the virus, while also causing serious, unintended problems. From elea‘s partners across emerging economies we get firsthand reports about how their communities are now struggling with the humanitarian and economic consequences of the measures against the pandemic.
Rapidly deteriorating humanitarian situation
The current crisis can be expected to have dire effects in regions of the world where significant parts of the population live in absolute poverty. People at the base of pyramid, confronted with constant uncertainty, now face existential threats. They lack the resilience that better livelihoods and savings could ensure. Millions of people living in densely populated informal settlements cannot isolate themselves, rendering calls for social distancing futile. Furthermore, without running water, hygiene measures such as regularly washing your hands, are almost impossible to implement. This puts them at a high risk of contagion. Daily-wage workers are immediately losing their income and are struggling to feed their families for several weeks of lockdown. India is facing an emerging humanitarian crisis with millions of migrant workers walking to their home villages on foot without access to food.
Decreasing capacity to address economic implications
This sudden shock and a rapid slowdown of the global economy have immediately undercut developing countries’ vital economic foundations. As factories are closed, exports halted, and workers sent home, businesses face liquidity crises and financial institutions are on the verge of collapsing. Governments lose tax revenues and access to financing from financial markets. Since the beginning of the crisis, emerging markets have suffered the biggest outflow of capital ever recorded according to the Institute of International Finance. To make matters worse, countries dominated by the informal economy will have very little room to implement relief plans to limit the economic impact.
Global crisis calling for a coordinated response from the international community
The pandemic reminds us on a very fundamental level of how globally interconnected we are. More than ever, we think it is critical for developed countries to maintain a global perspective and devise an ethical response to the unfolding crisis. Throughout history, epidemics have prompted the reemergence of disinformation and disturbing conspiracy theories, and our time is no different. It is imperative to follow scientific recommendations and resist irrational fears and dogmatic approaches. Poorer countries will be hit harder by the disease itself as well its economic and social implications. In a globalized world, these challenges demand our attention from a humanitarian perspective and because the repercussions will be felt globally. Thus, we strongly believe that the developed world needs to invest into solutions for emerging economies and share their knowledge and resources. Philanthropic institutions and impact investors can and should play a vital role in this.
Health care systems under stress
How elea is helping its entrepreneurs to address the crisis
We are in constant dialogue with our entrepreneurs and their impact ventures – to assess how they are affected, and how they need to adapt operations and adjust their strategy to these unprecedented circumstances. Since the full extent of the crisis in each country remains to be seen, we encourage entrepreneurs who have not yet felt direct implications on their business to take pre-emptive measures. Our team can leverage a global portfolio in different sectors to share information and best practices among social enterprises, which helps them build scenarios and mitigate risks. As the implications of lockdowns start affecting businesses, our entrepreneurs also face though leadership questions that we help them find answers to.
In these particularly challenging times, the elea entrepreneurs continue to play a critical role for their beneficiaries and more broadly in their communities: be it training low-income youth to be placed in India’s hospitals, ensuring job safety for women from one of South Africa’s most vulnerable parts of society, or educating smallholder farmer communities about risks and preventive measures. It is humbling for us to see the resilience of our entrepreneurs as they pursue their visions and it reinforces our conviction on the importance of social businesses in the fight against poverty. Therefore, we encourage all our portfolio enterprises to apply their impact and business model in innovative ways to fight the social and economic consequences of the global COVID-19 crisis.
The crisis is disproportionally affecting the people at the base of the pyramid, confirming again the importance of providing poor people with new and more sustainable sources of income. More than ever, philanthropic and other impact investors are needed to support social entrepreneurs. In this fast-moving crisis, we are therefore working with fellow funders to ensure that organizations with a strong impact and business model weather these difficult times, preparing them up for success thereafter. elea has set up an emergency funding facility to enable the survival of our portfolio organizations. This facility will allow us to make emergency liquidity available for our investees within a short period of time.
Moving from office to home office
How elea continues its operations from home
In compliance with nationwide restrictions and to ensure the safety and health of the team, we have moved our entire operations into home office. Our cohesive team and our IT infrastructure that was already geared to enable remote work allowed us to carry on our collaboration with the investees and our pipeline seamlessly.
We have adapted to the new circumstances: Digital tools allow us to maintain the frequent collaboration between colleagues and to reach out to each other, be it for scheduled or spontaneous calls. To replace meetings in person, we have set up regular team check-in calls to share everyone’s priorities and personal updates. This helps us stay connected and support each other as we would have done in our shared office space.
Our team members have adapted well to the new circumstances and have chosen diverse ways of taking care of their mental and physical health such as dedicating time to music, long video calls with friends and family, or making sure to leave the house daily ideally for some sportive activity. It goes without saying that we all adhere to the social distancing rules. Some of our team members have also decided to volunteer and to help their local community in various ways.
Get in touch with us if you want to find out more about how elea continues to fight poverty during this global crisis. We are happy to share our experience and hear about your approach and your feedback.