Challenges Faced by ICT Companies and Investors…

Over the weekend, I finally got a chance to go through the entire report by the task-force appointed by the Capital Markets Authority  in Kenya on Impact Investing. (view previous post). I was particularly impressed with what the task force had brought forth the challenges to both the ICT companies and financiers faced. In the part of developers and entrepreneurs, one of the most notable restriction was limited incubation and project preparation facilities. However, there are some initiatives that have taken to addressing this issue through the creation open spaces such as the iHub and the NaiLab. Developers have discovered the power of collaboration on executing and marketing of projects and have decided to explore it. Nway, here’s a brief run down of the main challenges:

  • Business related challenges – many of the businesses on the ICT sector are still young. Not easy to find established and stable firms in the region as yet. Considered high risk opportunities for investors.
  • Venture fund related challenges – Lengthy process of setting up venture funds and most face double taxation by the governments hence the move to registering in Mauritius to counter this.
  • Due diligence related challenges – Lack of in-house ICT business experts to hold valuation and assess the value of ICT projects
  • Limited enterprise clustering – most ICT businesses in the region are segmented and widespread geographically thus reaping minimal benefits that come out of collaboration
  • Lack of exit strategy – Restrictive and limited exit avenues due to stringent policy frameworks

The report went on to further dissect and explain more the situations and existing issues that are some of the leading challenges such as our culture of buyouts, lack of angel investor network, issues with taxation and solvency regulations.

Fortunately, the report also gives comprehensive recommendations on the potential interventions to the aforementioned challenges which cover exit strategy, set up of incubation projects, development of a business angel network, set up of fund for funds and policy and regulation reforms. A lot has been in done in terms of ideas generated, programming and support to the ICT sector by the governments and individuals. In my view, this report gives both investors and entrepreneurs a complete view of what should be done to take the sector to the next level of growth.

What does this all mean for your business?
The upsurge in support for the sector will most definitely see an increase in the adoption of internet due to the expected increase in homegrown technological solutions to local problems. What this means for your business or for the society in large is up to your imagination. But if you ask me, all I see is a major opportunity for any business to strategically position itself within the online market. Your company’s biggest strength will be its online strategy. Get a web strategy that takes into account the current happenings in the market and in the technology world to give a you an edge in terms of positioning your brand by factoring in its growth together with how the ICT sector is growing. For any business, playing catch up is never really a cheap nor pleasant experience. Talk to us today.

Read the full report here and give us your views on what it means for businesses in the region.

One Comment

  • Much as i appreciate the report, kindly help and educate me on the COMMON CHALLENGES OF ICT IN BUSINESS

    Posted by chaongopa chomba | July 4, 2012 11:54 am
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