To our knowledge “JAMBO” is the first RISK FUND designed within the UN 2030 Agenda for SDGs along with the guidelines of Basel III Committee on financial inclusion. Here we would like to explain the reasoning behind its construction.
The line https://www.linkedin.com/feed/update/urn:li:activity:6255675757557874688/ presenting “JAMBO” FUND FOR AFRICA has been clicked hundred times and got tens appreciations. We have to say that the proposed approach goes well above and beyond the purpose as a tool for financing ground activities; indeed the Figure has been elaborated from the methodology rationalizing the model to inclusive growth and for a comprehensive understanding you may go through: https://itunes.apple.com/us/book/id1116912686.
In particular, we utilized the market segmentation as a means to group people belonging to four big segments: a) People in need of basic services, b) People who aim at improving family budget, c) People who aim at start-up business, d) People who aim at growth-up business.
In the first segment, we are in the presence of food aid intervention while in the second one we have income generating activities; in the third and fourth segment the service provider is in presence of enterprise development. We may say that the points a), b) and c), d) refer, respectively, to Unserved and Underserved customers, taking from Basel III Committee’s terminology, which mention customers and not people, meaning that a link with a finance provider is a pre-condition for whatsoever intervention. Under the circumstances, the terminology Unserved people indicate that poverty matters should be addressed with economic policy instruments; accordingly, the terminology underline the difference among lender, developer and philanthropist: this is what we have detected, at least.
In this understanding the achievement of SDGs become a function of the actors’ capability and skill to deal with financial and economic inclusion, which have to be conjugated together, to have the desirable impact; indeed, financial inclusion alone could be a disillusion for the provider, an illusion for the client and a likely financial implosion within the community.
Back to the proposed FUND, we have elaborated on above documents and in particular, endeavoring the meaning of Goal 8 “Promote sustainable inclusive economic growth”, which should inform all development finance interventions: this is a real revolution made by the international financial establishment and it is quite incomprehensible that industry’s insiders haven’t emphasized the concept as it deserved. Prior to the release of above-said documents, the concept of sustainability has been almost neglected and, what’s more, there has been a misapplication of the use of the micro credit, privileging the outreach either horizontal (reach an increasing number of people) or vertical (cheap services) and in so doing ignoring the eligibility criteria.
Taking from the institutional narrative dealing with financial inclusion, the main message we perceived has been to move from CREDIT-BASED ECONOMY to COMMUNITY-BASED ECONOMY, thus re-designing the entire architecture of the approach in favor of poor people and small business as well, and shift the conceptual paradigm of the financial system from over indebted economy at micro and macro level to a real people’s empowerment via jobs creation.
We don’t say that there should be a restoration of the Keynesian theory, we do say that the role of finance in the economy has been dominant at macro and micro level, to detriment of the real economy, on the wrong assumption that poverty is a lender task instead of a government duty.
We simply elaborated from the suggestions and guidelines issued by the international financial establishment (WB, CGAP, etc.) and designed a RISK FUND FOR AFRICA as a business way to empower viable enterprises at both Start-up and Growth-up stage, on the grounds that there is a market worth $ 1.5 billion and JAMBO FUND has been designed to take these opportunities.
Who does what and how? https://ascaniograziosi.net/2017/02/28/jambo-fund-who-does-what-and-how/
Ascanio Graziosi 