Githa is in Ghana for a few weeks working on finishing her Master’s thesis and also spending some time with our partner PRC. She sent us this story:
‘These past few days, I’ve been lucky enough to do what I love the most about working with MYC4: meeting and talking with the borrowers whose pictures and stories I’ve looked at and even invested in on the MYC4 platform.
Today, I started by going to Real IT Solutions (https://www.myc4.com/Invest/Businesses/View/4595) where I was to meet with the co-owner Vida, a very charming young lady. Real IT develop and sell educational software to schools, parents and community centres, and with their in-house software development, they are able to make their products fit the needs and syllabus of Ghanaian school kids. Vida explained their business to me like this: “A lot of kids are interested in using the computer, but all the time they use it to play games. Well, to play is sometimes good, but academic wise they don’t really get anything out of it. So why don’t they play the same games, but this time we will add the academics to it? This way, while they are playing, they will be learning at the same time”.
Vida started the company together with her next door neighbour, Isaac, five years ago when they were both still living with their parents. Seeing as she is a software developer and Isaac is a graphic designer, they could develop their first product together at virtually no cost. “We started it in my bedroom, very small”, Vida told me “with just one PC”.
After successfully developing and selling a few copies of their first product called Math Twister, Vida and Isaac decided to officially start up a company. Full of optimism, they went to eight different banks and financial institutions to present their business plan in order to apply for funding. “We weren’t lucky at all” Vida remembered, “at that time people didn’t really understand educational software so they didn’t really share our ideas and vision. They didn’t see a need for it. They rather saw it as a risk instead of something that would end up being profitable.”
After that experience, Vida and Isaac looked at venture capital as an option, but they quickly realised that they would need some kind of track record and cash flow to even be considered for it. Luckily, they were soon chosen out of 56 applicants to be hosted by a UNDP-funded ICT Incubator which gave them access to five years of free office space. During the following couple of years, the two of them were able to develop another three products, but when time came for larger scale production and marketing, funding became a big issue. “This was around the time that we first heard about MYC4”, Vida said.
In January 2009, Real IT Solutions received a 4,000 euro loan from MYC4’s investors (https://www.myc4.com/Invest/Loans/View/4672) which was paid back in 12 months. “Without this loan, we would have ended up quitting” Vida said. “You really think so?” I asked her a bit skeptically. “Yes, because there would be no way out. Here in Ghana, it is very unfortunate that they don’t really support small start ups – especially in ICT” she explained, “so things would have been tougher and tougher and we wouldn’t have been able to create more products”. She paused. “By now I would maybe have been working in a bank or somewhere else.”
A couple of months after fully repaying the first loan, Vida and Isaac applied for a second loan on MYC4. This time, they obtained a loan of 8,000 euro (https://www.myc4.com/Invest/Loans/View/6521) which was disbursed to them in April this year. With the two loans, Real IT Solutions has been able to grow significantly: “Now we have eight products,” Vida told me, “and instead of two staff, we now have five permanent staff and eight contractors. We are still selling, and now we are even able to sell in large volumes while creating new products for other school years and other subjects”. Real IT Solutions has one year left with the incubator and 11 months to go before clearing the second MYC4 loan. The hope of Vida and Isaac is to by that time be able to succeed in getting some venture capital and thereby expand their business further.
You can visit Real IT Solutions’ own website here: www.realitghana.com’