Interview with Susan Randall, Country Guide Coordinator at BiD Network

Susan Randall is BiD Network’s Country Research Coordinator.
Before joining BiD in 2007, Susan worked for 10 years at a private bank as a country risk analyst with a focus on Eastern Europe and Latin American markets. In that position she had to write on a daily basis about political and economic risks in new emerging markets, and give recommendations on bank policy toward particular countries. Used to work with many sources of information, and to make analysis based on a careful weighing of differing views and opinions, and also working with data, made Susan the ideal person for the Country Guides. “This background is very helpful now, since for the guides I also have to deal with large amounts of information and try to get to the essence quickly.”

Why a guide to investing in SMEs?

“In mature markets, such as in the US, Europe and parts of Asia, SMEs benefit from an inflow of capital from Venture Capitalists, private investment funds and banks. However, investments in SMEs in most emerging markets are limited by a lack of information and thus a high perception of risk. As a result of this, many SMEs miss out on attracting investment, which I think is very unfortunate, since SMEs are a major driver for economic growth and job creation. At BiD Network we believe that if investors are presented with practical information on investing in SMEs, this will help them make informed decisions and increment investment flows to the best SMEs”, explained Susan.

There is, of course, information already available on investing in emerging markets, and which detail the business climate and regulations for investment -continued Susan- however, a lot of this information is geared toward Foreign Direct Investment in the traditional sense, e.g. how to set up a branch of a large multinational in a foreign country or how to invest in large, listed corporations. There is very little information available on the particular issues faced by investors in the SME segment. We shouldn’t forget that SMEs are disproportionally affected by issues such as complex tax systems, bureaucracy and undeep capital markets. If you are going to invest in these types of businesses in an emerging market, you need to be aware of these issues and how they could affect you or the company you are investing in. SMEs are not historically the easiest segment to invest in. The emphasis of the guides is on showing investors about the opportunities of investing in emerging markets and also inform them about the risks.

Why the choice of Uganda to start the series?

“Uganda was the most recent addition to our network of national partners, and the guide is an ideal tool to facilitate information gathering for our general activities there, including investor matchmaking. Uganda is also the pilot country for a new initiative of BiD Network to establish a system of equity service providers in selected countries in Africa, Latin America and Asia. Other important considerations for choosing Uganda are that it has a relatively friendly investment regime for foreign investors, and is also relatively stable politically. There is already some information available about investing in Uganda, but not as much as in, e.g., neighbouring Kenya where the capital markets are more developed. So we thought we could add some value by writing a guide on that country.”

How are these guides produced?

For the first guide, on investing in SMEs in Uganda, I was the sole author. Since this was the first guide, I depended in part on information provided by the Ugandan Investment Authority, which was very helpful in getting me on the right track and introducing me to organizations which contributed content to the guide. At BiD Network, we also have an extensive network of businesses and organizations all over the world, who I also relied on for input in the guide. Web searches and contacting organizations directly which I had found on the internet plus emailing was needed to collect valuable information from primary sources located in Uganda.

I am currently working on the second guide in the series, on investing in Colombia, in cooperation with SEAF Colombia, who are the co-authors. Since this guide is a co-production with a local partner, the process has been somewhat different than with the Uganda guide. Before starting research on the Colombia guide, we did an inventory of all the feedback we had received on the Uganda guide, and we adjusted content accordingly. For instance, several persons noticed that the first guide didn’t have enough case studies or interviews, so for this second guide we have focused much more on this. The research topics were divided between BiD and SEAF Colombia based on our respective backgrounds and access to information, and we maintain regular contact on progress of the guide. We are entering into the final stage of production now, where we compile all the information and then do extensive editing, checking for accuracy. All subsequent guides in the series will be done in co-operation with a local partner, who is responsible for designing and contributing part of the content and getting sponsors and advertisers on board. These partners will generally be investment professionals with extensive experience working with SMEs, they could come either from the private sector (Investment Funds) or Universities (e.g., many universities have entrepreneurship centres).

Available in handbook format

The guides will be published in a handbook format. The Uganda guide first released online, in a trial version, is now is available in a handy printed handbook. To order, please go to:
www.bidnetwork.org/investinginuganda

October 2008