Eng. Belachew Chekene [PhD] Co-Founder, Wegenfund
Belachew Chekene (PhD) is a licensed chartered engineer with over 20 years of diversified academic and business expertise. He earned his BSc in Chemical Engineering at Addis Ababa University, followed by an MSc at Leeds University in the UK and a PhD from the University of Huddersfield, also in the UK.
Belachew has collaborated closely with cutting-edge industries while working in prestigious research facilities, and has published more than 45 articles in prestigious journals and conferences. He has held positions as a technical advisor for modeling, data validation, data management, and system development at UK’s major auto and power system companies. In Ethiopia, Belachew is the founder of Ethiopia International Professional Support for Abay (EIPSA), which is a volunteer professional association that has been working on the Grand Ethiopian Renaissance Dam (GERD) since June 2013 with more than 270 professionals across the world.
Belachew and his business partner, Million Ajebe, from the UK, were behind Wegenfund – a platform Ethiopians are using to raise funds. In this interview with EBR’s Lidya Tesfaye, Belachew talks about how it started, and how the technology is shaping the long-standing culture of support among Ethiopians.6
Tell us how Wegenfund came about.
We once organized a campaign to raise funds for GERD. When we began encouraging people to donate to the dam, it didn’t take long for us and other colleagues to realize that there was no simple or convenient way to do so. That motivated me to act. In association with United Ethiopia for Peace and Reconciliation in the UK, we unveiled a temporary fundraising application, #itismydam, developed by EagleLion System Technology. The software was successful in creating convenience for individuals to make donations for GERD.
Soon after we launched that, a question was brought up about the platform and how it should not be restricted to fundraising for the GERD, but should be built as a permanent system so that people can serve charitable organizations in Ethiopia.
We have seen the technology, how it works, and what we need, including the payment gateway system. Accordingly, the idea of developing Wegenfund emerged. We setup Wegen Technology Solutions in Addis Ababa and developed Wegenfund in six months’ time. It was very challenging, especially as we were abroad. However, we built a successful crowd funding platform for both local and international donations.
So, generally, Wegenfund is an Ethiopian-based donation platform that enables charitable organizations and religious institutions to campaign and raise funds globally. It is one of the products of Wegen Technology Solutions PLC. It was launched on December 30, 2021, and was founded and created by myself and co-founder and lead developer Million Ajebe. We are really delighted to have created a technological solution for crowd funding in our country.
Ethiopians are used to raising money to support one another. What impact did technology have?
The fact is, Ethiopians have always helped one another. The society is used to raising money and donating, even through informal organizations like “Edir” and “Mahiber”. Especially in the rural area where I grew up, I remember how society provided the required resources, like providing wood and sticks to rebuild a house or purchasing an ox for a farmer who faced unforeseen challenges. In the metropolitan region, for instance, in Merkato, if a businessperson experiences a disaster at work, if the business is damaged, torched, or robbed, the community will pitch in to help him or her rebuild. People contribute money to a coworker who is having problems at his job. This culture has existed within us all along. Charitable organizations are established that provide such a service throughout the rest of the world, where such ways of supporting one another have already existed in Ethiopia.
Fundraising is important because it assists individuals or nonprofit organizations that are experiencing difficulties in overcoming challenges and in rebuilding what has been lost.
Fundraising used to be limited to a specific area and to a select group of individuals who knew one another personally. But now that technology has advanced, I can donate to charities and raise money without having to travel to Addis Ababa. Thanks to technology, I can hear your issues from anywhere in the world and offer assistance. That has been the case for other fundraising events that we have seen. The technology enabled individuals to donate to charitable causes and raise money for people they have never met in person, from anywhere in the world.
How does digital literacy affect technology-based fundraising in Ethiopia?
Let me take you back to two years earlier. Back then, it was difficult to do what we are doing now. Four main problems existed. One is that there was no payment gateway system that could facilitate payments. That means a person who wants to buy a product online cannot make a payment because there is no online payment gateway system. The other problem was that the Ethiopian financial system had no integration with the international financial system, besides direct bank transfers.
The third issue was the accessibility of technological infrastructure, especially internet access. Internet access two years ago was very limited. Of course, now, with the service that Ethio Telecom and Safaricom are providing, the accessibility of the internet has been enhanced. But still, in comparison with the demand, we are far from full access.
The fourth problem was an accumulation of the above three. As a society, we are just learning how to use technology, so some may still find it difficult to make payments online. These problems were there two or three years ago, but now there is a huge difference and positive change. Payment systems like VISA and Mastercard have been introduced. Different online payment gateways like Chapa, Arfipay, Kacha have also been introduced locally.
But the problem that remains is that each bank is setting up its own payment gateway, and there is no central system that enables them to work together. That means if you have a card from Awash Bank, you cannot make a payment for a transaction processed through the Commercial Bank of Ethiopia. That is because banks are not yet integrated.
If you ask me what I wish would happen in the future, it would be for the banks to cooperate and work on common payment processes so that customers can get any service with any bank card. I am hoping the National Bank of Ethiopia will push the banks towards that. But for now, it remains a problem.
The success of technologies like Wegenfund is dependent on the development of financial technology and internet accessibility.
We have heard that there are more than 100 different fundraising causes registered on the Wegenfund platform. What were the criteria for cause selection, and which cause has earned the most funds so far?
We are not the ones who select the causes. Currently, the customers or users of Wegenfund are four kinds of groups: the first are charitable organizations. These are the ones that are registered with the Authority of Civil Society Organizations and have a license. They came to us and had their organization as well as their cause registered. The second is religious organizations, both Islamic and Christian. They [religious institutions] are not obliged to be registered as charitable organizations, as they are also legal entities. The third is an individual person. Anyone with a letter of approval from the medical board of directors to go abroad for medical purposes or who has been referred to local hospitals can register. The fourth is one that we launched last Thursday, March 9, 2023, which is crowdfunding for startup businesses, through which entrepreneurs bring their business ideas and raise funds.
When they come to fundraise on the Wegenfund platform, there is an online registration system, where they are requested to submit all the necessary documents. We will then review the documents, and, if the request is accepted, we will send the documents to the banks that we work with. It is after this process that they are given the final approval. Then they can create a fundraising campaign for the cause they chose, which can be promoted to people who will donate.
As I have said earlier, it is those groups that create the cause, not us. A charity can create more than one cause. That is why we have about 100 causes, but only 47 registered organizations as of March 13, 2023. There are many different types of causes. Funds have been raised for orphans in the war-torn areas of the country, for an elders’ association that looks into sustainable sources of income for the elderly like Mekedonia, and for people with medical issues. Of all those, the highest amount of funds was raised for two causes: for Mekedonia by comedian Eshetu and for the Wag Hemra Archdiocese’s war affected area, both of which raised almost one million dollars.
Moreover, since last year, we have been working on integrating our system with a local payment gateway so that anyone in Ethiopia can be part of the fundraising using our system. Now people can make payments through the payment gateway Chapa, and through Telebirr, Awash Bank, Wegagen Bank, Amole, and CBE Birr.
Tell us about the recently launched crowdfunding program for startup businesses. What convinced you to start this?
Donating and giving to a charitable organization is giving to those who cannot help themselves and who are facing problems, it is more of a humanitarian act when you give to people in need of help. But besides that, a country develops when people become entrepreneurs and work hard. That is a gap that Wegenfund wants to address. As the saying goes, it is better to teach a man how to fish than feed him/her a fish each day.
In general, there are four ways to crowdfund for startup businesses. One is donation. Through donations, you can donate to a business idea that you like or that you believe will bring about a change that many can benefit from, without expecting anything in return. The second is reward. Through this option, you will help the business that is on its way to being established and get something back, in kind. For instance, if a person wants to publish a book, he or she might come to us and register through his or her publisher. Then the author will introduce his or her book with some details and advertise the idea for fundraising to those who can “buy” an unpublished book. And when the book gets published, the author will give a signed copy to those who took part in the fundraising.
The third is credit. You do not have to go to banks when you need credit, myself or any other person can give you that peer-to-peer (P2P) loan. With the loan, you will do your business and repay with a certain amount of interest. The fourth and biggest is equity. We believe that this one can bring a radical change to our country’s business startups. Through this option, the startups or business owners will bring their idea and advertise it on the Wegenfund platform. After which different investors and stakeholders will buy shares. Then, they will receive dividends based on their investment once the business is launched and starts making profits.
Due to the credit and equity options requiring tax and other legal processes, it’s the first two (donations and rewards) that are currently available on the Wegenfund platform.
If you ask me what the significance is, many people have noble ideas, but they face different challenges while implementing those ideas due to financial limitations. Banks request collateral. People with business ideas can come to Wegenfund, and Wegenfund will help them raise the funds they need.
People are familiar with GoFundMe and a few other crowdfunding platforms. What makes Wegenfund more convenient?
There are two reasons. First, platforms like “GoFundMe” and “JustGiving” are not available in Ethiopia that serves charities. When you open the GoFundMe website and try to fundraise for a cause, it will say the system is not available in your country. GoFundMe is only available in 19 countries across the world. To raise funds and to create a cause for Ethiopia, the person must be in America or in one of those European countries where the system is available. Otherwise, you cannot register because the system requires your address, bank details, and identity as a whole. So. there is no platform in Ethiopia that provides such a service. Therefore, there is no competition in the first place.
Some people create a cause and fundraise, engaging people living abroad, which can be a hassle. They will manage to collect the donations, but when they try to send the money to Ethiopia for the purpose intended, it is not an easy process. The system works when the fund is being raised, but after that, especially if the money is a lot, it will ask too many questions. It will ask where the money is going to be spent, exactly which international organization put the fund to the intended objective, and more. For instance, two years back, more than USD 3.5 million was raised by the Ethiopian Orthodox Tewahido Church followers living in America, for people in Shashemene. But after that, the question was how and where to send the money. The Ethiopian Orthodox Tewahedo Church development and Inter-Church Aid Commission, had to transfer the money to the commission, and the commission distributed it to the people in need in Shashemene. But if the commission had not written a letter to GoFundMe, it wouldn’t have released the funds.
Previously, the main platform used to raise funds for Mekedonia was GoFundMe. Since Mekedonia is a charitable organization already registered in America, it was easy for them to pass through those processes. However, for other charitable organizations, it’s difficult. Wegenfund is the first crowdfunding platform in Ethiopia. So now, you can be anywhere in Ethiopia and register your charitable organization, create a cause, and fundraise. The money will enter the Ethiopian financial system the moment it is donated, and you will immediately be able to get the money in your account. This makes Wegenfund convenient.
The other issue is that it takes 15 to 45 days for GoFundMe to disburse the money raised. It may sometimes take up to 90 days. But during that time, if information, data, or any document requested is not presented, GoFundMe will give the money to other charitable organizations with a similar objective. Numerous funds have been raised for Ethiopia for various causes; however, GoFundMe distributed them for other causes. But through Wegenfund, based on the emergency of the need, it might only take as long as two days.
On another note, whether it’s a small or large amount, it helps collect foreign currency. There is no assurance that money given through GoFundMe will arrive in hard currencies like the US dollar, British pound, or European Euro. But every penny that is raised through Wegenfund will directly get into the system of the National Bank of Ethiopia. Therefore, we can earn foreign currency without any waste.
We can mention technological empowerment. If you recall, during the war in the northern part of Ethiopia, social media accounts supposedly supporting the betterment of Ethiopia were shut down, while those opposing peace were supposedly promoted and given more authority. Fundraising activities during those days used to be biased. With Wegenfund, fundraising is independent and helps achieve self-sufficiency for Ethiopians.
GoFundMe charges about 2.9Pct for the service it provides. There is also a bank transfer fee when the funds are transferred to Ethiopia. On Wegenfund, there are transaction and administration charges, but they are low compared to GoFundMe. And there is no bank transfer fee at all.
We, as Wegenfund, do not see our financial gain, rather, the way I see it, we are bringing technological empowerment to our country. We did all the work from beginning to end. And by enhancing and developing what we have now, we can introduce more technological empowerment to Ethiopians.
What feedback have you received from charitable organizations, religious institutions, and individuals?
There are about 3,000 charitable organizations that are registered with the Ethiopian Authority of Civil Society Organizations. We have the data for all of them and have reached out to them to introduce Wegenfund. We have also given trainings about how funds are raised. A few of them registered after that, and some of them wanted to wait and see. Those who saw our system and our presentation were short on words to express their appreciation. Some of them did not believe that it was true; they registered to test it, and when they received money through Wegenfund, it built their confidence, and they are now fully using it.
Even with the introduction of Wegenfund and the technology, many have not registered, for many reasons. For now, in one year, about 49 charitable organizations and religious institutions have registered and are raising funds. We will continue advertising it and giving training.
We have more than 120 million people in Ethiopia, of which about 67 million have mobile phones. If at least 10Pct of them donate one birr a day, it means we can raise ETB 6.7 million for charity daily. Using this system, a businessman in Moyale or a pastoralist in Afar can easily donate to his brother and sister in Borena. They may not be able to send goats or teff, but using the system, they can donate to a cause. We are working to make Wegenfund the “GoFundMe” of Ethiopia. We believe and are hopeful that it will come true.
What challenges have you faced so far, and what are the hopes that you are looking forward to?
We can see this in two ways. As a technological product, we are in a very good position because the system is reliable. Our system has not failed once since the launch. The system has been assessed and certified by the Ethiopian Information Network Security Administration (INSA), and it is a verified platform. We have now integrated it with local financial institutions, and everything is going well in terms of the technological aspects.
On the other side, there are some challenges regarding integration with a third party and assessing the different required support for crowd funding for startup businesses. There are about 3,000 organizations, but only 48 of them are registered on Wegenfund. Reaching the rest and creating awareness has been a challenge. Of course, in the coming days, we hope to register most of them. The other challenge is the payment processers, which I described earlier.
Technologically, in one year, we have refined Wefenfund. Wegenfund will be used across Ethiopia, and we also plan to expand to other African countries. And in no time, we will launch a massive product that can bring about a huge change in the financial flow of the country. Last year was a productive year for our company. But that does not mean there were no challenges; be we are working through them.
EBR 11th Year • April 2023 • No. 116