Enabling Entrepreneurial Ecosystems

Abstract

Uganda is hemmed in by areas where conflicts break out sporadically, including South Sudan and the Nord-Kivu province of the Democratic Republic of the Congo. Moreover, the country still lives under the shadow of former president Idi Amin, whose policies included not only torture and hundreds of thousands of extra-judicial killings, but also, in 1972, the wholesale expulsion of tens of thousands of ethnic South Asians. Locally born and raised, this group had constituted much of the country’s merchant and entrepreneurial class. When a team of Bangladeshis led by Ariful Islam arrived in 2005 to set up a local operation for BRAC, a global development organization based in Dhaka, they had a long and difficult road ahead of them. The organization had already pioneered speedy scale-ups in difficult terrain, including in Afghanistan in 2002, where it began its first operation outside Bangladesh, providing development assistance with programs in health care, microfinance, rural livelihood development, and girls’ education. Nevertheless, Uganda’s historical legacy with people of South Asian origin working within its borders would present unavoidable cultural hurdles. Six years later, BRAC Uganda’s success has been remarkable. By most measurable standards the largest nongovernmental organization in the world, BRAC is also the largest in Uganda. As of March 2012, it has over 110,000 microfinance borrowers and a cumulative loan disbursement of $116 million in Uganda, thanks largely to a partnership with The MasterCard Foundation, a private, Torontobased foundation launched in 2006 with a gift from MasterCard Worldwide at the time of its initial public offering. The partnership with BRAC was one of the first major projects of the foundation, which was created to test and scale innovative poverty solutions with a focus on youth learning and microfinance. Begun in 2008, the partnership with The MasterCard Foundation has helped BRAC increase its reach from 60,000 Ugandans in 2006 to 2.8 million today, a number projected to reach 4.2 million, or 12 percent of the country’s population, by 2016. The obvious question is how the partnership accomplished this growth. It is due in part to a strategy to multiply the impact of microfinance by combining it with livelihood development and youth empowerment. The result of the program