Yale World Fellow Interview Series with ‘Tokunboh Ishmael
By Charlotte Finegold
‘Tokunboh Ishmael, the Managing Director and co-founder of Alitheia Capital, spent many years of her professional life in investment-banking in Africa, Europe, and the U.S. After graduating from London Business School and the University of London, she held a variety of positions: she worked as a technology consult for companies including Amerada Hess, ING Barings, and Reuters, as the Country Partner for Nigeria at Aureos Capital, as a Managing Director at Avante Capital Ltd, where she worked on a number of gas and oil acquisitions. After accumulating experience in investment baking, technology and new business development, and private equity investment, she co-founded Alitheia Capital, an investment management and advisory firm working to improve access to finance, housing, and energy for low-income households and small businesses and improve the lives of people in Nigeria.
Why did you choose to apply to serve as a Yale World Fellow?
Well that is a big question. First of all, there is no other program like the Yale World Fellows program. I took a look at some profiles of other fellows that had come other years, and I felt that the quality of people who came to the program was high. Also, the international breadth that you get here is second to none. At this stage, everyone is here to share and tap into this great seat of learning, but also to bring in and share individual experiences… I thought that would be a great experience for me personally. Also, what I felt when I was looking at the Yale website, and speaking to people about the work that Yale does, was that there was a heavy emphasis on my field in Asia, and part of why I wanted to come here was also to bring the stories of what I do in Nigeria and Africa to Yale so that we could get more of a two-way flow between Yale and where I work.
So you wanted to increase the diversity of the program’s focus?
How long is the application process?
It opens sometime in the fall and it closes in early December. But I bet that most people do not start thinking about it until a couple weeks before.
Did you know you wanted to apply to the program a long time ago?
Well…I had a friend that came and I really liked what I heard about what she did whilst she was here, so within twelve to eighteen months of hearing about it was when I decided I wanted to do it.
So now, shifting to the work that brought you to Yale – could you tell us about your company, Alitheia?
So essentially what we do is we are like a venture capital firm. We invest in businesses and people who are providing solutions to allow ordinary, everyday people in Nigeria to be able to have the opportunity to buy and use everyday goods and services that most people take for granted. That includes being able to have access to a bank account and using that to transact or save, having access to some money that enables them to run a business, access to a roof over their heads that is affordable to them. In some cases, that means financing businesses that enable people to afford putting a toilet in their home. So it is really about providing basic goods and services that we take for granted that some people just do not have access to.
What led you and your co-founder to create Alitheia? What was the process like to start the company?
I was working in the investment-banking world on Wall Street, with one of the world-record investment banks, before I moved to Nigeria and continued working on mergers and acquisitions. I was working on all these large transactions in the oil and gas sector, but I felt that something was missing – a link between what I was doing and how ordinary people were being impacted. So I wanted to use my professional skills and tie those in to my empathy for the plight of poor people and the underserved and see how I could use traditional investing to have a positive effect on their lives.
Was there a particular experience or moment that made you decide to leave the traditional investment-banking world?
There were moments along the line, but yes, there was one. In the middle of the night when I was working on balancing a humongous spreadsheet and trying to figure out what would be the number of people that I should suggest that be laid off so that we could meet certain synergies. And you are thinking – you are advising on certain decisions that involve these people in a spreadsheet. And there was a huge disconnect for me.
Were there any kinds of companies, like Alitheia, that already existed in Nigeria that were working on similar goals?
At the time that we were founded – no. Certainly none that expressed that as an intention. There were obviously companies that did investing and private equity, but they did not mention that intention of having a positive effect on peoples’ everyday existence.
Could you take us through each of Alitheia’s main programs? What have been the successes and challenges with each one?
So there are three main areas that we look to provide financing intervention.
In the area of financial inclusion, we look to see if we can fund something – whether it is a bank or a mobile financing platform, etc., that can make it easier for ordinary people to have a bank account and to be able to save and buy insurance. One of the roadblocks is finding the opportunities that we can provide finance and intervention that are aligned with our objectives of not just making money and instead making a difference in the lives of people. We also struggle to have enough funds from our investors, because the number of opportunities that come up outstrips the funds that we have. In some cases, people think that we are a charity, but it is not – we are a for-profit organization, and we are leveraging the for-profit type of skills and professional way of working to address some of these social issues.
Our investors are primarily in Europe, so we rely on European finance development, so that is a roadblock. And our government’s priorities rely on financing infrastructure projects, and probably do not pay enough attention to activities on the ground that will generate a positive effect. It is a slow journey, but we are making progress.
Another area where we provide intervention is in housing, where we look at what kind of financing products we can help create that will enable people to afford to extend their homes in an environment where home mortgages are more or less nonexistent. So we look at how we can use the way that microfinance banks work to create financial products that will enable people to improve their homes, or even start out on a home that they want to incrementally build.
And the other is in the area of helping to alleviate energy poverty. There are so many people that are off the grid in their respective countries in Africa. So we are looking at what kind of financial solutions can help people to get energy, whether that is for general lighting of their house at night or using a cleaner cooking fuel than they use, because that will have some positive effects; whether that is reducing the number of hours that cooking takes; whether it is related to aesthetics, in terms of them having a cleaner pot, which is related to the soot which comes off that pot, which is related to air pollution in the home, which is related to reducing infant mortality. So there are a number of outcomes that we look to have along those lines.
We also try to make people we want to back understand what it means for us to invest in the equity of their company. Some people, rightly so sometimes, just want to hold on to what they have, and do not understand the concept of opening up their business to allow for partners to come in and help them grow. Some challenges also exist in changing people’s behavior, whether that means changing their view of thinking about the mobile phone as a way of talking to a way for paying for products and services, or a way to save or buy insurance products, or even, with cooking fuel, changing the behavior of a woman who, even though she knows that the use of wood is detrimental for her, she has not quite made the mental leap.
How have your programs been impacting the Nigerian economy? How do you feel about the company’s and the country’s future development?
They impact the communities where we work. Because of what we are doing, we are seeing 2,000 households a month change their cooking fuel from firewood to clean, liquefied petroleum gas, which is a very positive effect. And our target is to have five million households over a period of five years change their household fuel and use that as a catalyst to grow the program. There is some research that shows that the demand for microfinancing services for households is $100 million in the next five years…unfortunately, we are not even touching 50 percent of that in terms of what we provide. But any amount that we bring to the table is helping people to have access to financial services. And the companies that we are investing in collectively serve over a million clients, which means that over a million households have access to money that they otherwise would not have.
The work that you are doing sounds incredibly beneficial! You have lived in and worked in several countries. What was life like for you in Nigeria? How was the transition to life in the U.K. and U.S.?
So I did my undergraduate degree in Nigeria, then I did my graduate degree and MBA in the U.K., and then I started my professional life in the U.K. I actually started off life in Europe and visited Nigeria for the first time when I was eleven, and making that adjustment when I was young was obviously a lot harder than when I had to make it the other way after graduate school. And at the time, the quality of university education in Nigeria was high when I made that transition, and also, because I had been going back and forth as a student anyway, the adjustment was not huge when I went back to the U.K. But when I decided to move back to Nigeria to work, after spending quite a few years working professionally in the U.K. and the U.S., that took quite a bit of adjustment – getting used to the infrastructure issues, of course. But then I was also pleasantly surprised by the level of professionalism, and there were some very sharp people that I found myself working with.
What do you think are some of the largest differences between American and Nigerian life?
Well, you need to read some books for that… you need to write some books for that… I could generalize, but that doesn’t really get us here or there, because there are pockets of similarities and others of differences. I think what makes it challenging to work in Nigeria is the infrastructure issues. You can’t just stay in your office in Nigeria until whatever time, not that I prescribe that, because there is a certain time when the office generator goes off, and you need to go home. Also, there are so many other things that come into play that affect your everyday professional life that have nothing to do with your life. There is a joke that you should not really plan for more than one or two meetings in different places in Lagos, because that is your whole day. And that holds true, whereas in the West, I could hop on the subway or a bus… but because of those things, people have become resilient and have adopted technologies to make what we do useful and to facilitate what we do. But we also say that if you can survive in Lagos, you do so anywhere.
Lately there has been a lot of news about Boko Haram – the Islamist extremist group in northern Nigeria. Could you tell us about the group and its effects on Nigerian life? Has the group’s actions affected your company?
In Lagos, no, it is not something we come into contact with every day. The communities we work with are more southern, but we do have investment in the northern part, and the group’s activities have impacted the way our programs have been able to run. There have been some closures. But, in general, it is very saddening that it is happening in the same country, in the North, and that people are being impacted. Now, people are more cautious, and the issue is broader than Nigeria – I mean, look what happened in the Kenyan mall. I think there are fundamental issues that need to be addressed, and I do not think that it is religion that is driving this.
Hopefully, the work that you are doing at Yale will help to improve Nigeria even more and offset the damage Boko Haram is causing. Moving on to your experience at Yale: how would you evaluate the World Fellows Program? Are you getting the resources you imagined?
It is a fantastic program, and I do not think there is anything like it. The best thing about it, for me, is getting to meet people from different countries and cultures, who all have different perspectives, within my cohort. But I also love meeting students and faculty from all over the world, and getting to take what I learn from all of those pockets.
What kind of research are you pursuing at Yale? How are you planning to implement this research in the future?
While I am here I am focusing on the theme of financing innovation that supports development and social change, and using that financing tool as a tool for aid that many developed countries have used to make interventions and to give money to projects that will serve their agenda. I am looking at what innovations – technological or otherwise – can be used to improve lives: whether that is because someone has found a new way of using the mobile phone for low-cost financial services for people in rural areas or who are otherwise outside of the usual circle in which traditional banks want to operate; whether that is because we are able to look at some efficient, low-manufacturing-cost form of developing micro-hydro equipment that enables people in rural areas to purify their water; whether that is looking at redesigning how gas is sold so that people can switch from firewood to using clean cooking fuels. I am looking for innovations that, because you are being pushed to make them useful, low-cost, and accessible to low-income communities, and because you are being pushed to make sure that they are extremely affordable, and you are having to work within more constraints than traditionally, you are pushed to think that much more and innovate. And because of that, you could reverse innovate and could come up with something that would be useful in developed nations. One well-known example of that is M-Pesa, which created the mobile safety payments revolution. [M-Pesa is a company that provides mobile money transfer and microfinancing services for the largest mobile network operators in Tanzania and Kenya.]
I think that the manner in which clean cooking stoves are being changed and customized to make them efficient and healthier for low-income populations might make its way back to camping equipment in developed nations. So I am looking at that whole idea of financing innovation to ease the problems of poor people and in some cases save their lives, and how that can then be turned around to become a convenience for people in developed countries.
So are you implementing this research into Alitheia as you discover new innovations?
We have already done some of that by financing some of the initiatives that we are supporting. But I also want to know, by the end of my time here, how to find information about other innovations that can be applied to communities we work with.
Apart from the World Fellows Program, what are your favorite and least favorite things at Yale and in New Haven?
My favorite thing about Yale is the intellectual hotbed and the way in which people are able to think in an interdisciplinary manner, and how people are thinking about problems from different perspectives – anthropological, psychological, physiological, historical, and cultural – and how that all blends together to form solutions.
My favorite thing about New Haven is that it is actually a beautiful place that you do not know much about, and that there is a lot to discover about this place. It is like this friend that you take a walk with everyday and learn something new about.
What I do not like about New Haven is the alarming segregation that one encounters on the street. And I feel a little frustrated because of the kind of work that I do for the developing world and for poor communities. I think, surely that this kind of work should be implemented in New Haven? And I am sure that some people have been thinking about that, but I am frustrated about this… is it a case that does not work? So I would like to explore that while I am here.
What I do not like about Yale… there is so much choice, so what do I do? But it is that choice that makes it such an intellectual hotbed.
Thank you so much for your time. To close, is there a single piece of advice that you would like to share with Yale students?
Do not follow the herd. Look for your own North Star and follow that. These are all clichés… but really, think about what is important to you and do not restrict yourself about what classes to take, what major to pursue, and leverage the opportunity that you have here at Yale to work in and experience other cultures.