Helping to undo the red tape that ties up social entrepreneurs in bureaucratic knots

After losing her job, Renshia Manuel, a mother of four, found herself looking at an empty larder and a row of hungry faces. For a school librarian with no formal qualifications in a country with one of the highest unemployment and inequality rates in the world, the future looked bleak. Desperate to feed her children, Manuel started growing veggies at her home in Hanover Park – an area better known for gangsterism than it is for gardening. Little did she know at the time that the seeds of a successful social enterprise had been sown.

Today Manuel is the founder and CEO of GrowBox, a small business that provides “grow your own” planter boxes of fresh vegetables to consumers, and supplies vegetable and flowering seedlings to nursery retailers, community organisations, NGOs and NPOs as well as government entities. Boxes are sold on a two-for-one model – for every two boxes sold, one is sponsored to a hungry household. Veggie boxes and food gardening vouchers paid for by private and corporate sponsorship are also distributed to beneficiaries. GrowBox takes basic food nutrition to those who need it most and teaches households how to grow food at their own homes in sustainable and eco-friendly ways. 

“Whether you are an inner-city dweller with only a balcony space, or living in an informal settlement, a flat or backyard dwelling where there’s no space or the ground is badly polluted, we’ve got what you need to set up your own veggie garden. Anywhere that there is sunlight and fresh air you can grow your own garden,” says Manuel.

Never one to be idle, Manuel is always asking, “are we making enough of a difference?” and “what can we do next?” This is the trademark DNA of a social entrepreneur. And in the past few months, she has had more than enough opportunities to answer those questions. Already an impoverished neighbourhood, Hanover Park residents have been hard hit by the pandemic. Seeing the growing desperation around her, Manuel has moved to turn part of her nursery into a food garden and engage additional community members to grow vegetables for their tables or to sell for their profit. She is also planning to start a local market including other local vendors and a wider range of homegrown and homemade products.

Social entrepreneurs are everyday people, like Manuel, responding to the issues they see around them in novel ways – and South Africa needs more like her. Social entrepreneurs often address needs others don’t or won’t, trade with customers others might not be willing or able to, create jobs – often for those without formal training – and not least, provide an example and sense of agency often in impoverished contexts. While not the panacea, social entrepreneurship offers a way of improving both the economic and social conditions in the country. Why then do so many start-ups fail?

Regulatory requirements, chronic financial constraints, scarce resources, lack of access to mentors and advisory services, limited networks, inexperience in managing financial resources, and a broader context of a struggling economy, crime – and now too Covid-19 – are all part of the social entrepreneur’s reality.

“The red tape was stifling,” said Manuel. “Being a social entrepreneur is like being a round peg in a square hole: you are neither purely for profit, nor purely not-for-profit and this makes the paperwork even more difficult. South Africa does not currently have a legal business entity that recognises the dual mandate of a genuine social enterprise. Which makes raising finance more difficult too.”

Without a cent of her own to invest, it was only thanks to winning a R5,000 prize from the City of Cape Town’s #Youth Start competition in 2016 that Manuel was able to get her business registered, purchase basic equipment and start-up stock, and negotiate a lease on a portion of school grounds for her nursery. And it was thanks to the training she received as part of her prize that she could develop her idea into a sound business concept. But what about all the other not-so-lucky entrants and thousands of other hopeful start-ups? How do they access the necessary credit and advice to grow their business ideas?

While there are several government SME funding platforms, including the Department of Trade and Industry, Small Enterprise Finance Agency, National Youth Development Agency, and the National Treasury’s Loan Guarantee Scheme (LGS), the credit gap for SMEs is between R86-billion and R346-billion, according to a study sponsored by the South African SME fund. Alternatives include banks, or better still, non-bank lenders – many of which cater for SMEs in a way traditional banks seldom do. But still, you have to meet their requirements and if, like Manuel, it’s not part of your education or skill set, this in itself is a massive obstacle.

“I couldn’t even understand the language the businesspeople were speaking when I started, and it took me years to learn how to write an acceptable business proposal,” explains Manuel. “People like me are schooled to get a job – even though there’s no hope of one. Kids should rather be told entrepreneurship stories, encouraged to dream entrepreneurship dreams, and taught the necessary skills to create jobs for themselves.”

And when the time comes, government and the corporate sector must provide real support. Then these remarkable initiatives will have a better chance to grow and deliver the impact we need in our society and economy. DM

Mignon Reyneke is an Associate Professor of Digital Marketing at the University of Cape Town’s Graduate School of Business and the author of a teaching case study published by the Case Writing Centre at the school on GrowBox.