Jacqueline's Letter: Winter 2010

Acumen Fund

Jacqueline Novogratz
February 2010

Overview: A quarterly update letter from Jacqueline recaps recent news, a visit to the beautiful new home of a former prostitute and slum dweller outside of Nairobi, Kenya, and an inspiring event that took place in the Kibera slum of Nairobi.

Publication Preview: "In the first years of Acumen Fund’s existence, the two most challenging questions we faced were “Can this scale?” and “Will you ever exit?” As I wrote in my last letter to you, we’re seeing significant scale in our investments ranging from maternal health, to public toilets and solar energy. Of course, the more we find answers, the deeper our questions become. Regarding scale, we’re now doing more intense dives into understanding the trade-offs. On one hand, how do our investees avoid corruption in partnering with government; and on the other, how do they avoid being pushed to serve a wealthier clientele by more traditional investors focused more on profitability than on serving the poor?

Regarding exits, the news is good. Indeed, we exited two investments this quarter and hope to exit a third in the coming months. Most exciting is Jamii Bora, the affordable housing development outside Nairobi, Kenya, which has fully repaid its $250,000 loan! Three years ago, we lent this money so that Jamii Bora could build a housing development for low-income slum dwellers who had proven their ability to repay, but would never qualify for a traditional bank mortgage. I remember standing on the open land an hour outside Nairobi’s slums, listening to the inimitable Ingrid Munro, Jamii Bora’s founder, laying out her vision: the organization would build 2,000 houses, each equipped with an indoor kitchen and bathroom, a garden and a place for laundry; they would use solar energy, and create an efficient water system so that the water could be treated and recycled; and they would eventually see a town of 12,000 people flourishing."