LE REGOLE DEL GIOCO DELLA FINANZA NON HANNO FUNZIONATO. PERCHÉ ?

“We’ve never needed new economic thinking like we do right now. The economic effects of the COVID-19 crisis are again laying bare the failings of traditional economic thinking. But it is also forcing our institutions toward beneficial policies that would usually be anathema to orthodox understandings”.https://mailchi.mp/evonomics/p3f1nhihu6-1402168-w6i4hxo708-1402221?e=4a5f65ad55

Di seguito abbiamo annotato un riassunto di nostre recenti conversazioni sulle contraddizioni – che non sono poche e di poco conto – del mondo della Finanza, facendo riferimento alla Missione Povertà https://www.linkedin.com/pulse/lo-sviluppo-inclusivo-via-business-approach-ascanio-graziosi/ (Post pubblicato 13/09/2019).

Dopo quattro anni dalla pubblicazione del documento delle Nazioni Unite sullo sviluppo sostenibile, riteniamo sia fattibile iniziare una conversazione sull’impatto delle nuove Regole del Gioco della Finanza,

Sulla carta, i Grandi Attori della Finanza (GAF) – (Banca Mondiale-CGAP, Basel III e Altri) – hanno introdotto dei cambiamenti importanti (2015-2016) per eliminare la Povertà in tutte le forme entro il 2030 “Agenda 2030 NU”, “Comitato Basel III” , “CGAP” e “CSFI Banana Skins”.

Al presente, la questione è quella di verificare se i citati Attori hanno iniziato il percorso con il piede giusto per rendere possibile la Missione: sembra peraltro che i risultati delle prime analisi non siano stati incoraggianti.

Malgrado i progressi realizzati, ci sono dei fatti quotidianamente verificabili nelle grandi città le cui strade sono occupate da emarginati e mendicanti, a dimostrazione che qualche cosa non va nella direzione giusta nel capitalismo finanziario; per non parlare delle situazioni nelle regioni emergenti del pianeta dove si registrano migrazioni massicce e crescenti diseguaglianze sociali.

Qualche dato. È stato stimato che le attività liquide cioè disponibili in cerca di lucrativi off-shore rappresenterebbero più del 10%(?) del PIL prodotto da 188 Paesi, per un totale pari a 88 683 787 milioni di dollari; inoltre, nel corso degli ultimi dieci anni, 3 miliardi di dollari sono stati reinvestiti in attività finanziarie, cioè i capitalisti/investitori hanno massimizzato il valore delle proprie azioni. Cosa dire delle banche europee che tengono gli attivi liquidi presso la Banca Centrale Europea.

Le contraddizioni di cui sopra risiedono nel fatto che esiste un’enorme domanda da parte di cittadini che chiedono migliori condizioni di vita e di professionisti/imprenditori bisognosi di capitali per iniziare nuove attività (start-up) e/o espandere iniziative esistenti. Detti paradossi sono stati accompagnati dall’avversione al rischio degli investitori, soprattutto Africani.

«Après dix ans de défaut de Lehman Brothers, le système financier a peu changé» (C. Lagarde, già Direttrice del FMI). Secondo la Banca Mondiale “African investors remain risk-averse” and …. the funding requests lack speaking the language required for investment”. La situazione è ben nota agli imprenditori/banchieri del Continente .  

Recentemente, l’insoddisfazione suscitata dalle suddette situazioni ha trovato eco presso i Grandi Attori della Finanza (GAF) e discussioni sull’argomento sono in corso: incontri annuali del Gruppo Banca Mondiale (Ottobre 2018) e il documento della Commissione Europea (Appel de la Commission Européenne.

Per ribaltare la situazione, in alcuni ambienti è stata avanzata l’dea che occorra cambiare le Regole del Gioco della Finanza. Noi concordiamo su azioni multilaterali, come indicato da un recente Rapporto dell’l’ONU ma non siamo sicuri che occorra “revisiter l’architecture financière mondiale” et de “remodeler à la fois les niveaux national et international du système financier … ., che è stato cambiato soltanto quattro anni fa.

Il problema non è quello di nuovi cambiamenti, ma interrogarsi sul vero significato dell’inclusione finanziaria che non è il fine ma il mezzo per raggiungere lo sviluppo inclusivo, la sostenibilità degli investimenti essendo il core business. 

A nostro avviso, i GAF hanno cambiato le Regole del Gioco ma non hanno aggiornato la Scatola degli Attrezzi (approccio al mercato). Pertanto, è un dovere dell’Establishment Finanziario dare l’esempio sul come comportarsi, cui dovrebbero allinearsi gli Executives delle banche.

Nella misura in cui si è d’accordo su quanto sopra, l’attenzione va sui punti seguenti:

  1. a)    Rivedere la Cassetta degli Attrezzi (tools box) per il conseguimento degli obiettivi concordati
  2. b)    Avere investitori nazionali realmente impegnati nello sviluppo delle comunità di cui fanno parte
  3. c)    Attenuare il ruolo dominante della finanza nell’economia e effettuare interventi sostenibili
  4. d)    Stabilire una vera partnership con il settore privato
  5. e)    Affrontare l’avversione al rischio dei capitalisti nelle attività produttive.

Per il raggiungimento degli obiettivi va aggiornato il comportamento e l’approccio basati sull’esperienza e competenza (cassetta degli attrezzi) che vanno aggiornate alla luce delle nuove situazioni del mercato. Se c’è avversione al rischio occorre conoscerne le cause e agire di conseguenza e anche condividere con gli investitori & capitalisti nazionali il processo decisionale (learning by doing): non è facile, ma le opzioni ci sono, come abbiamo scritto di recente.

La povertà va riconsiderata in termini di crescita sostenibile e trasformazione delle economie. La sfida è enorme perché non si tratta solo di aiutare chi non ha, ma chi ha bisogno di più, entrambi non ancora ben integrati nelle comunità di cui fanno parte: i poveri non sono solo quelli che vivono in emergenza ma anche quelli (imprenditori e professionisti) che hanno bisogno di maggiore integrazione nel contesto sociale. La domanda è quindi quella di disegnare un nuovo modello di finanziamento dello sviluppo per includere le azioni sul campo nel quadro logico già delineato dall’Establishment: lotta alla povertà, crescita sostenibile, partenariato, sviluppo inclusivo. Non c’è dubbio che aspirazioni, obiettivi e interessi delle comunità locali, imprenditori e gruppi sociali, debbano essere incluse nel quadro logico di riferimento.

Occorre passare dall’ECONOMIA BASATA SUL CREDITO all’ECONOMIA BASATA SULLE COMUNITÀ, come abbiamo scritto sin dal 2016 e recentemente; in pratica, passare dal Capitalismo dell’Establishment al Capitalismo delle Parti Interessate.

Conclusionela Missione Povertà è possibile a due condizioni: – A – Accesso alla Board Room dei rappresentanti degli altri Stakeholders, – B, Capitalisti & Imprenditori decidono di dare vita a Fondi Nazionali di Sviluppo. La condizione (A) potrà verificarsi in concreto se i GAF accettano i Rappresentati degli altri Attori nella Board Room: circostanza improbabile. Pertanto, la condizione (B) sembra la strada da percorrere. Come? La nostra proposta è stata pubblicata

THE THEORY OF CHANGE APPLIED TO FINANCE FOR DEVELOPMENT http://reader.ilmiolibro.kataweb.it/v/1252660/the-theory-of-change-applied-to-finance-for-development_1268103

 

 

THE THEORY OF CHANGE APPLIED TO THE FINANCE FOR DEVELOPMENT

To catch with the meaning of the finance’s current trend, there is a need to fill the dots in the historical context. This is what we have done starting from late 70’ of last century and focusing on the last decade, which have marked the discontinuity at macro finance and micro lending as well and since then never has been as before.

Finance Boutique has elaborated on the Theory of change applied to Finance for Development taking from field experience and desk research; in particular, we have assessed the impact of the changes either introduced or endorsed by the Financial Establishment over the past four decades, which have registered important changes in the rules of the finance game.

The literature dealing with the Theory of Change has deeply discussed the methodological approach in view of evaluating the impact of the related changes.

Our contribution has evaluated the impact of the changes in the Development Finance Practice linking the recent proposed methodologies with the Factors affecting the Project performance, on the grounds that while “filling the dots” there is also a need to evaluate the situation, which consent to learn for projecting the future.

As it is a well-known to the evaluation’s insiders, the outcome of a Development Programme is function of the prevailing Stakeholders’ interests, objectives, expectations at that moment in time. In the past the Finance’s Actors have privileged the outreach to the detriment of the sustainability of the operations at both macro and micro finance. 

More recently, the Agenda for SDGs has provided new horizons in terms of vision and objectives and shifted the course of action reinstating the sustainability’s factor.

An important result of such a trend can be perceived by the increasing importance of the private sector in the the finance industry. New topics have been emerging and the attention of the Development’s Actors will be drawn on how to make it happen a durable growth. 

It has become evident that a balance has to be found between economic and social objectives and this new course has called for a new deal among all the Stakeholders and the role plaid by the international development agencies shall be of upmost importance. 

In practice, this means that while dealing with development’ issues, the bearers of a specific interest can react differently in relation to the market conditions and consequently the collaboration among all the players is a pre-condition to attain the goals and have an equitable game.

In this scenario the interests/objectives/demand/expectations stressed by the Stakeholders shall find out a welding point in a common consensus. As a result, at management level the expected performance/results of the Development Programme shall vary in relation to the relative importance (weight) of Stakeholders’ interests/positions.

In parallel with the changing goals and objectives (UN Agenda) a different way of doing business shall be implemented in order to adapt and adjust tools and techniques at macro, meso and micro level. 

We have assumed the Theory of Change applied to Finance for development as a process of a continuing negotiations among the Actors, who have different interests/aspirations and expectations in pursuing a common development goal.

The debate on the matter should involve each one and every Development Actor but not limited to the finance industry’s insiders. This is why we have decided to send the draft document to Executives and Top Managers who commit themselves to return it with their feedback, as a condition: write to ascaniograziosi@gmail.com .

Ascanio Graziosi,

Former Banker, Owner INNOVATIVE FINANCIAL INCLUSION SOLUTIONS

VERS UN NOUVEAU MODEL DE CROISSANCE INCLUSIVE

Nous voudrions partager un résumé succinct de conversations sur les contradictions de la finance, tout en référent à la Mission Pauvreté: quatre ans après la publication du document des Nations Unis pour le développement durable, il est faisable entamer une conversation sur l’impact des nouvelles règles du jeu de la finance. https://www.un.org/sustainabledevelopment/fr/objectifs-de-developpement-durable/,

Sur papier, les Parties Prenantes de la Finance (Banque Mondiale-CGAP, Basel III et d’autres) – ont introduit des changements remarquables (2015-2016) pour éliminer la pauvreté sous toutes ses formes d’ici à 2030 « UN 2030 Agenda » http://www.un.org. Basel III ( http://www.bis.org, ), CGAP (http://www.cgap.org/publications/new-funder-guidelines-market-systems-approach-financial-inclusion), and CSFI Banana Skins (http://www.aboutmicrofinance.com/wp-content/uploads/2016/07/Banana+Skins_07-16_v8.pdf ).

A présent, la question est de savoir s’ils ont commencé du bon pied pour rendre possible la Mission Pauvreté avec des interventions soutenables. D’après les premiers analyses, les résultats n’ont pas été encourageants.

Il est à noter que malgré les progrès réalisés, il y a des faits quotidiennement constatés dans les rues des grandes villes, qui sont occupées par un nombre croissant de sans-abri et de mendiants, ce qui montre que quelque chose ne va pas dans la bonne direction dans capitalisme financier. Sans parler des situations dans les régions en développement enregistrant des migrations massives et des inégalités grandissantes.

Quelques données. Il a été estimé que les actifs liquides, à savoir les fonds disponibles à la recherche d’off-shore lucratives, devraient représenter beaucoup plus (10 fois?) du produit intérieur brut (PIB) mondial, c’est-à-dire la valeur de tous les biens produits et services par 188 Pays, pour un montant de 80 683 787 millions de dollars. En outre, il a été estimé qu’au cours des dix dernières années, 3 milliards de de US $ ont été réinvestis dans des activités financières; autrement dit, les capitalistes ont maximisé la valeur de leurs actions. Quoi dire des banque Européennes qui, au lieu de financer l’économie, gardent les actives liquides auprès de la BCE et paye 0,5%! 

La contradiction des données ci-dessus réside dans le fait qu’il existe une demande énorme de la part des citoyens qui supplient de meilleures conditions de vie et des professionnels et entrepreneurs ayant besoin de capitaux pour démarrer des activités nouvelles et pour la croissance des entreprises existantes. Les paradoxes dont on a dit tantôt, se sont cumulées avec l’aversion au risque des capitalistes, surtout Africaines.

«Après dix ans de défaut de Lehman Brothers, le système financier a peu changé» (C. Lagarde, ancienne directrice du Fonds Monétaire International).  D’après la Banque Mondiale “African investors remain risk-averse” and …. the funding requests lack speaking the language required for investment” https://ascaniograziosi.net/2018/05/28/the-digital-economy-in-africa-could-be-a-gamble-because-investments-matter/ . La situation est bien connue aux entrepreneurs africaines (Tony Elumelu, Africapitalism) (https://www.linkedin.com/pulse/africapitalism-creating-shared-value-community-based-economy-ascanio/).

Dernièrement, l’insatisfaction suscitée par les situations susmentionnées a trouvé des écho auprès des Parties Prenantes et des discussions sont en cours: réunions annuelles du Groupe de la Banque mondiale (octobre 2018) et  le document de la Commission européenne (Appel de la Commission Européenne https://ec.europa.eu/commission/sites/beta-political/files/soteu2018-investment-outside-eu-communication-644_en_0.pdf).

Pour inverser la situation, dans certains entourages il a été avancé l’idée de modifier les règles du jeu de la finance.

Nous sommes d’accord sur les actions multilatérales et sur “les conséquences du non-investissement affecteront tout le monde“, comme a indiqué le rapport susmentionné de l’ONU, mais nous ne partagerons pas l’idée “revisiter l’architecture financière mondiale” et de “remodeler à la fois les niveaux national et international du système financier … . .

A ce sujet il n’est pas question de nouveaux changements, mais s’interroger sur le véritable sens de l’inclusion financière, qui n’est pas le but, mais un moyen pour atteindre le développement inclusif, la durabilité étant le noyau central des investissements.

A notre avis, les Parties Prenantes ont changé les règles du jeu de la finance mais ils n’ont pas mis à jour la “boîte à outils” pour les atteindre. Donc, à l’Établissement Financier reviens le devoir de donner l’exemple.

Pour atteindre les objectifs, le comportement et l’approche basés sur l’expérience et la compétence (boîte à outils) doivent être actualisés à la lumière des nouvelles conditions du marché. En présence d’une aversion au risque, il faudrait en connaître les causes, agir en conséquence et partager le processus décisionnel avec les investisseurs: ce n’est pas facile, mais des options existent.

Il faut reconsidérer la pauvreté en termes de croissance durable et transformation des économies. Le défi est colossal car il ne s’agit pas seulement d’aider ceux qui n’ont rien mais ceux qui nécessite de plus, les uns et les autres n’étant pas encore bien intégrés dans les communautés dont ils font partie: les pauvres n’étant pas seulement ceux qui vivent dans l’émergence (laissez pour compte) mais aussi ceux qui ont davantage besoin d’être mieux intégrés. La question est donc celle de dessiner un nouveau modèle d’intervention pour encadrer les actions de terrain dans le cadre logique déjà esquissé : lutte à la pauvreté, croissance durable, partenariat, développement inclusif.

Pour concrétiser les objectifs du développement durable, il est question de :
a) Réviser la boîte à outils pour atteindre les objectifs fixés,
b)   Avoir les investisseurs nationaux engagés dans leurs communautés ;
c) Atténuer le rôle dominant de la composante financière dans l’économie,
d)   Établir un véritable partenariat avec le secteur privé
e)    Faire face à l’aversion au risque des capitalistes.

FINANCE BOUTIQUE a mis au point un Modèle de financement du développement visant à atténuer la pauvreté par la création d’emplois et la croissance des entreprises : “Inclusive Growth via business approach” https://ascaniograziosi.net/2019/05/05/inclusive-growth-via-business-approach-2/ .

D’après nous, il faut PASSER DE L’ÉCONOMIE BASEÉ SUR LE CRÉDIT À L’ÉCONOMIE BASEÉ SUR LA COMMUNAUTE, comme nous l’avons écrit depuis 2016 et récemment https://ascaniograziosi.net/2019/07/17/national-investors-setting-up-a-country-development-scheme/. En pratique, il faut passer du Capitalismes des Actionnaires au Capitalisme des Autres Parties Prenantes (from Shareholder Capitalism to Stakeholders Capitalism, to get Better Capitalism), comme récemment le passage a été défini https://www.lemonde.fr/idees/article/2019/08/26/il-est-temps-que-les-chefs-d-entreprise-changent-radicalement-de-paradigme_5502888_3232.html?

Les Exécutives des banques aussi doivent adapter une nouvelle approche au marché

Conclusion: la mission de lutte contre la pauvreté peut être possible si deux conditions sont remplies: A) Les actionnaires partagent avec les autres Parties Prenantes les décisions stratégiques; B) Capitalistes & Entrepreneurs décident de créer des Fonds Nationaux de Développement.

D’après vous, il y a d’autres options ?

NATIONAL INVESTORS SETTING UP A COUNTRY DEVELOPMENT SCHEME

Continuing our conversation “Vers le développement inclusive de l’Afrique https://www.linkedin.com/pulse/vers-le-developpement-inclusif-de-lafrique-ascanio-graziosi/, there is another avenue to take, if and when African Capitalists agree that something should be done, unless they decide to keep going the status quo. 

FINANCE BOUTIQUE has worked out a Model of intervention, to mitigate the poverty via jobs creation and providing opportunities for people’s better living conditions and business prosperity. 

The Model aims at promoting growth via business approach, which vision has been inspired by the UN 2030 Agenda for SDGs, in particular the Objective 1 (end Poverty in all its forms) and Objective 8 (Promote inclusive and sustainable growth). The Model has been proposed in 2018 (6) and then justified by forty pages of a Feasibility Study, ready to be converted into a Project. 

Here our approach:

Firstly, we have reviewed the narrative on development finance issues focusing on Africa, which has made, again, the headlines as a Continent of opportunities, which have been estimated at billion $ 1.5. (5)

Secondly, we have taken into account our background in terms of field experience: we do have collaborated in some sixteen African Countries out of twenty-six world-wide.

Thirdly, we have checked our expertise on the matter: we have designed, managed and evaluated FUNDS in the following Countries: Tunisia, Bosnia, Caribbean, Romania, Mali, Albania, Netherlands Antilles, Malawi, Algeria, Morocco Ghana and Russia Federation.

Fourthly, we have tested the viability and validity of the proposal in the field. Although the Project’s horizon is the Continent, it doesn’t mean to cover 54 Countries, opportunities being available everywhere; initially, the activities shall focus on some selected countries. (6)

Fifthly, we supported the Proposal with a methodology: The Project should be seen in the picture of the Community-based economy as a new approach replacing Credit-based economy (7). Accordingly, we have elaborated a conceptual framework which has been the reference in point to design the Model to promote growth via business approach. The connected market segmentation deserves a detailed investigation of the landscape to understand which kind of service/product may be delivered and makes also the difference between lender, developer and philanthropists. 

Who?Why? How? Where?

  • A) JAMBO (Swahili salutations) isn’t a fund as usual. To our knowledge it is the first RISK FUND designed within the UN 2030 Agenda for SDGs along with the guidelines of Basel III Committee on financial inclusion: (Fund vision: Objectives 1 and 8 of SDGs).
  • B) JAMBO isn’t just financing but much more: it does match-up traditional and innovative approach to the market and the proposed market segmentation will be of utmost importance for both finance and the digital providers. It has a twofold objective: to provide financial resources to UNDERSERVED ENTREPRENEURS and assistance to UNDERCAPITALISED LENDERS, both facing the following three big challenges: UNDERCAPITALISATION, DIGITALISATION and MANAGEMENT. The linkages between FUND and national financial providers (MFI, Banks, Finance Agencies, etc.) shall be worked out country by country, in accordance with the related market situations; if this way isn’t viable or feasible, the FUND will directly link with the Entrepreneurs;
  • C) The Model is viable and valid at both regional and country level and in this understanding, a specific request can be fitted into it;
  • D) The FUND shall have a positive impact on the financial market by lowering the high cost of borrowing;
  • E) Based on the current lending activities in the Continent, the FUND can secure, at least, an ROI above 3%; besides, there is a significant image Return for Investors acting as a development’s actors;
  • F) Although the Project’s horizon is the Continent, it doesn’t mean to cover 54 Countries, opportunities being available everywhere. We have planned to achieve round-up meetings in 3-4 countries and come back with an important portfolio. It is worthwhile to note that some entrepreneurs have already anticipated requests for financial assistance: Ghana (cotton), Cote d’Ivoire (cocoa beans), Benin (port) Nigeria (recycling), Tanzania (enterprise expansion), Algeria (Construction).
  • G) We have worked out a tentative timetable, which should be discussed with the Founders: 1) a field survey in some selected countries, 2) round-up meeting with our high-level contacts in some countries. In case, the field survey could be completed soon after FUND inception.
  • H) The requested seed capital along with the African Country where to register the Fund shall be discussed with a restricted Group Founders: Investment Companies, Firms, Private Investors, Donors, Financial Institutions.

The Fund will make it the history of promoting African Countries’ inclusive growth. Truly interested Investors may have more information: graziosiascanio@aol.com and via Skype.

BACK TO AFRICA for Partnerships, Joint Ventures and more

Eight years ago, we opened up our own FINANCE BOUTIQUE to share Experience accumulated in three Continents and Expertise in Development Finance, which has been a recurrent topic in our consultancies, backed by a solid banking background with the largest Italian commercial bank.

Currently we have planned to expand the activities in Africa, where already we have qualified relations in both Anglophone and Francophone Regions proved by a second and a third trip in Malawi, Guinea Conakry, Morocco, Niger, Mali and certified by reference letters granted by Governments and Institutions in Somalia and Guinea Conakry.

Why do establish a network of partnerships, associations and joint ventures in the Continent?  

We could do it in the Cariforum Countries (Caribbean) where we still recall the passionate discussions with the Representatives of the Banana Growers Associations; we could also mention the challenging meetings with the policy decision makers in Kaliningrad and Pskov while in Russia Federation, without disregarding the tough debates in the Balkans Region.

Eventually, the sentiment prevailed, and we opted for Africa where we started our overseas career in the 60s as Economist with the Central Bank of Somalia and then added fifteen Countries with a residential status in Malawi, Somalia, Swaziland and Burkina Faso.

Taking from above Facts and Figures we don’t say “we will do it”; we do say “we will continue doing it

We do believe that like in chemistry, in economics it is a continuing process of review and revise of theories formulated to meet the desires, the demands for, the needs, the interests, the objectives and the aspirations of the people, which are prevailing at that moment in time.

Enfin, quelle est notre vision au sujet Développement ? Dans la période 1997-98 nous avons commencé à réfléchir d’une manière complète à ce sujet dans le cadre du Programme UN-FAO « Aliments dans les villes »,http://www.fao.org/fcit/fcit-home/fr/, et  en tant que Coordinateur du Groupe de Travail Finance nous avons préparé une “Étude de faisabilité pour des interventions en faveur de la petite entreprise commerciale alimentaire dans la ville de Addis Abéba”, à l’intention des Donneurs.

The thème Pauvreté a été débattu depuis longtemps. En Europe, dans le dix-neuvième siècle, des organisations humanitaires et de charité se sont exposées à aider tous et chacun ayant besoin d’une assistance de base. C’est dans cette époque que des organisations de petit crédit ont commencé à élaborer un modèle d’intervention en faveur des désavantagés, qui ont été aussi les bénéficiaires de l’action des Caisses d’Épargne, Populaires, Rurales, dans les années devenues des grandes banques à l’échelle internationale.

A partir des années cinquante du siècle passé le problème Développement a été adressé sous l’égide de l’aide. Dans ce contexte, et tout en référant aux thème Pauvreté dans les années soixante-dix un mouvement populiste dans le Sous-Continent de l’Asie a promu l’idée autant fasciné que risqué « crédit pour tout le monde ».

A présent le secteur de la Microfinance – auparavant incontrôlé – comprend centaines des réalités qui travaillent à côté des communautés et encadrées dans le coiffe législative et organisationnel des pays, à la suite des recommandations contenues dans le document Basel III publié en 2010 « Microfinance activities and the Core Principles for Effective Banking Supervision”, http://www.bis.org/publ/bcbs175.pdf. Donc l’an 2010 trace la ligne de démarcation pour une renouvelle action de terrain. Par ailleurs, ce document a inspiré notre ouvrage « Suggestions for designing a new credit model” publié en 2011 http://www.microfinancegateway.org/library/suggestions-designing-microcredit-model, mentionné parmi les trois premiers articles consultés (source CGAP).

An ultérieur et décisive pas en avant a été fait à cheval des années 2015-16 lorsque les établissements financiers internationaux ont discontinuité l’idée populiste du crédit en remettant l’individu au centre des interventions sur le terrain. Ici il faut citer le document Basel III ( http://www.bis.org, ), CGAP (http://www.cgap.org/publications/new-funder-guidelines-market-systems-approach-financial-inclusion), UN 2030 Agenda on SDGs http://www.un.org.) and CSFI Banana Skins (http://www.aboutmicrofinance.com/wp-content/uploads/2016/07/Banana+Skins_07-16_v8.pdf ).

Taking from above sources, in 2016 we have published FINANCIAL INCLUSION (https://www.amazon.co.uk/dp/B01ENJP37S?ref_=k4w_oembed_XABBfUDmCDeygV&tag=kpembed-20&linkCode=kpd) , which sub-title “Give people a job, not a loan”, synthetized our idea to replace the dominant role of the financial component in the economy moving from CREDIT-BASED ECONOMY to COMMUNITY-BASED ECONOMY; in a word, re-think the approach to the development taking from the requests of the Underserved clients, entrepreneurs and professionals – already committed and involved in the system – in need of assistance and capitals to have more and better access aux sources de financements.

Referring to Africa landscape in 2018 we have worked out a feasibility study The Gateway to Africa Inclusive Growth prêt à être traduit en Project (  https://www.morebooks.de/store/gb/book/the-gateway-to-africa-inclusive-growth-jambo-fund/isbn/978-620-2-28375-5) , to map-out the road to achieve the countries’ inclusive growth.

When you click the following line http://www.businessinsider.com/giant-infrastructure-projects-reshaping-africa-2016-12?IR=T/#in-2009-the-common-market-for-eastern-and-southern-africa-began-work-on-the-north-south-corridor-a-series-of-roadways-and-railways-spanning-more-than-6000-miles-across-seven-countries-its-total-cost-is-approximately-1-billion-1 you will have a concrete overview of what’s going on in Africa’s landscape and likely to conclude to give a chance to people living around this ideal spine and fulfil their aspirations and needs. But this is just an example, the opportunity being available everywhere, as we have

The big projects although being a condition for a solid development, they aren’t enough for a real take-off, which ask for a more inclusion of the people, which can be achieved with a remunerated job and promotion of the opportunities.

FINANCE BOUTIQUE has in the basket projects ready for implementation on the following topics: Inclusive Growth, Digitalisation of financial services, New Products, Bring together Entrepreneurs and Financiers, Fundraising, Start-up & Growth-up Activities, Restructuring Micro Financial Sector, facing undercapitalisation & Digitalisation & Management.

Dutifully, we have anticipated our way to work in terms of vision, objective, strategy and means so that our Business Partners – established consulting firms, development agencies, donors, trust funds, may see where to have a meeting point for our field activities. You may express your interest: ascaniograziosi@gmail.com and have a Skype meeting.

Inclusive Growth via Business Approach

In our Finance Boutique we worked out a Model of intervention, to mitigate the poverty via jobs creation and providing opportunities for people’s better living conditions and business prosperity. The Model aims at promoting growth via business approach.

The Inclusive Growth can be achieved re-examining the development finance agencies’ approach. To make it the story short: changing the development objectives without updating the approach to achieve them could leave things as before. Honestly, we must say that phasing out last century’s micro finance idea (credit sorting out from the poverty) and replacing it with financial inclusion has been a substantial step ahead. Now it is a question to make a further step and advice financial & technological providers on the real meaning of financial inclusion, which isn’t giving a smart electronic device; see: Open letter to Fintech https://ascaniograziosi.net/2016/10/27/162/

We do think that bankers, lenders and financiers should be aware about the new market situation while sitting around the table and play the digitalisation with the technologists, the main focus of the attention being the individual and not the group. Indeed, a smart phone connected to a finance institution is personal product. Moreover, the Players’ objectives and interests are different and accordingly Financiers and Technologists have different strategy, when it comes to decide the target. This does mean they have to reach a balance between sustainability and expansion: providing sustainable products at affordable and transparent price; accordingly, the market segmentation approach should be revised.

To really translate into action the SDGs there isn’t a need to change the rules of finance game but to review and revise the approach to understand what’s going on and take action. We did it taking from our “tools box” of extensive field experience and expertise on development finance issue.

In other words, we plaid the inclusive growth game with the cards distributed by the Big Financial Players and then elaborated a Model of intervention: MOVING FROM CREDIT-BASED ECONOMY to COMMUNITY BASED ECONOMY

Here is a practical example. Referring to IFC Program in Mena Countries, even a small slice of planned $ 2 billion could make it the difference.How do it? Getting into a development scheme the truly committed national investors & entrepreneurs and provide them with the seed capital for setting up a National Fund in each Country.

Africa Investors could act taking the opportunity we have made available with FUNDRAISING CAMPAIGN for JAMBO FUND: https://ascaniograziosi.net/2017/06/13/seven-questions-about-jambo-fund/. Interested capitalists may have details addressing their inquiry to ascaniograziosi@gmail.com

However, it has been said that“African investors remain risk-averse” and …. the funding requests lack speaking the language required for investment” https://ascaniograziosi.net/2018/05/28/the-digital-economy-in-africa-could-be-a-gamble-because-investments-matter/ . The situation is well-known to the Africa business insiders. And if WB-IMF, the African Entrepreneurs and the Nigerian businessman and banker Tony Elumelu (Africapitalism) (https://www.linkedin.com/pulse/africapitalism-creating-shared-value-community-based-economy-ascanio/) said that, we must believe them.

On the matter we said that the extent to which the above comments are actual, the best way to face the situation is to take financiers & entrepreneurs onboard, learning by doing being the appropriate way to disseminate the language required for the investments. Finally, having the national development actors taking in their own hands the future of their communities is per se an innovative approach and is the real meaning of the Community-Based Economy, which we have presented in our recent book POVERTY – An Alternative Paradigm: MOVING FROM CREDIT-BASED ECONOMY to COMMUNITY BASED ECONOMY https://www.morebooks.de/store/gb/book/poverty-an-alternative-paradigm/isbn/978-613-8-45817-3

 

POVERTY – A colossal challenge wrongly addressed – An alternative Paradigm.

SUMMARY. The possibilities to achieve countries’ inclusive growth could move to a probability to never it happens, because of the finance matter; indeed, the mission could be possible on condition to change the finance’s rules of the game. We aren’t sure that the actual players will change the system.

This week, ten years ago, people around the world learned about Lehman Brothers bankruptcy: have you noticed any changes in global finance? Well, besides the employees going out with their packed stuff from the bank’s main door we don’t recall any significant and tangible revision. In a very recent interview, Christine Lagarde, MD of International Monetary Fund said: “After ten years from Lehman Brothers default the finance system changed a little bit” This isn’t a lonely voice: if the financial establishment said that, we must believe them.

Let’s have a look at the global finance status of affairs. In 2010 a Document issued under the Basel III (Bank International Settlements) flagship“Core Principles for Effective Banking Supervision”, http://www.bis.org/publ/bcbs175.pdfissued recommendations on financial market regulations, supervision and risks, but very little changed.

Two years ago, Basel III http://www.bis.org)and CGAP (the house organ of the World Bank) (http://www.cgap.org/publications/new-funder-guidelines-market-systems-approach-financial-inclusion), phased out microfinance idea proposed by the Populists from Asia Sub-Continent, but very few words have been spent on how to make it happen Inclusive Growth that is the ultimate goal of UN 2030 Agenda for SDGs.

A global evidence of the finance’s continuing business, as usual, is given by the digitalisation of the financial services. Sensibly, the above-mentioned Documents made recommendations to national market supervisors to regulate the market of financial institutions working with people who do not have an account (Unserved) with a formal financial institution or need (Underserved) to integrate it. However, in some Countries, like Kenya and Ghana, just to mention a couple of hem, the risks caused by the a credit via mobile phone’s way of doing business arisen alarming comments till making parallelism with the easy going to credit promoted by the Populists last century, which caused financial implosions in Bangladesh, Bosnia, Cambodia, India, Morocco, Pakistan, Nicaragua with mass’s suicides in Andhra Pradesh – India, which had international echo.

Here we aren’t going to propose a new finance game’s rules, but suggesting how to deal with matter, quoting what Mr Menichella a former Governor of Bank of Italy said four decades ago “These are the cards and we have to play with them”; so, let’s play  with the cards distributed by the big players. Accordingly, we worked out an Algorithm that has been inspired by the financial establishment recommendations. So, we didn’t design a new umbrella, but just an elaboration of what has been recommended by the financial establishment.

Taking from above-mentioned sources we have detected, among others, a recurring and a dominant message, as we perceived it, at least: To move from the Credit-based economy to Community-based economy and focusing on jobs creation and people empowerment.

MOVING FROM CREDIT-BASED ECONOMY to COMMUNITY-BASED ECONOMY: what does it mean? It does mean to provide people with either a job or opportunities in view to upgrade the life’s conditions. This can’t be achieved using the financial leverage alone, but conjugating together both economic policy and financial and economic inclusion, countries’ inclusive growth is the ultimate goal of the 2030 Agenda for SDGs. We don’t say to restore the Keynesian theory.

We do say:

  1. To phase out the financial way to development based on the supply side of the financial services to detriment of the demand for, namely from the bottom to the top.
  2. To re-design the entire architecture of the approach in favour of poor people and small business as well, and shift the paradigm of the financial interventions from the over-indebted economy at a micro and macro level to a real people’s empowerment through jobs creation and opportunities’ promotion.
  3. To have private investors really involved in the development process.
  4. To use the financial leverage for sustainable interventions, which is as easy to say as complicated to achieve, because asking for a revision of the decision-making process and fulfil the credit eligibility criteria.
  5. To digitalise the services with a product that is sustainable for the providers, affordable for the clients and market transparent: this can be reached via an appropriate market segmentation: https://www.linkedin.com/pulse/open-letter-fintech-ascanio-graziosi/.
  6. To conjugate together two main Goals of the UN 2030 Agenda for SDGs, namely Goal 1 (End of poverty) and Goal 8 (Promote inclusive and sustainable growth).

We have elaborated on above reasoning and worked out a conceptual framework that has been visualized in the above Figure, which has been the reference in point to design a new Model to promote growth via business approach.

The fundamental question is how to approach the market and manage interventions when dealing with both individual persons and businesses. Under the circumstances and referring to the thousands of people that grassroots organizations aim at having in their portfolio, we may distinguish four big market segments:

Box 2 – Market segmentation

Empowering people in four big market segments:

  • (a) People in need of basic services
  • (b) People who aim at improving family budget
  • (c) People who aim at a start-up business
  • (d) People who aim at growth-up business

 

Source:https://www.amazon.com/kindle/dp/B01ENJP37S/ref=rdr_kindle_ext_eos_detail

In the first segment, the financial provider is in the presence of food aid while in the second one we have income generating activities; in the third and fourth segment, the finance provider deals with promotion & enterprise development. In the Basel III’s terminology we may say that the point (a) and (b) – (c) and (d) refer, respectively, to unserved and underserved customers.

For financial inclusion purpose, the segmentation is the core of the business, which deserves a correct and detailed investigation of the landscape, to understand which kind of service may be added to the product and makes also the difference among lenders, developers and philanthropists. In this perception, to make it a successful approach, the experience and expertise of the Team in charge to run the field operations will make the difference and here the competence and behaviour will play a very important role: https://ascaniograziosi.net/2018/08/13/the-factors-affecting-the-projects-performance/.

Inclusive growth is a relatively recent concept dealing with objectives, means and strategy to empower either people or segment of the market via economic and social development.  A comprehensive understanding may be taken from the above-mentioned-documents

In this context, the real question is: how much social objective is compatible with a sustainable intervention? The answer may be expressed with a mathematical function where social performance is a function of the below variables:

Box – Social performance’s function

Social performance= F (enterprise development; family income; food security)

In the above scenario the expected performance of whatsoever intervention in any of the three segments (Enterprise Development, Generating Activities, Food aid) shall vary in relation of the relative importance (weight) of the interests, objectives, position, expectation of the players and, as a result, the search of a welding point shall be found out in a continuing negotiations: “The factors affecting the Projects performance” https://ascaniograziosi.net/2018/08/13/the-factors-affecting-the-projects-performance/

The financial leverage to business is important, sometimes vital and its sustainable use creates jobs and promotes opportunities, government providing an enabling environment and related services. With a salary, people may or may not apply for a loan and buy a mobile phone without pressure and independence; in so doing the meaning of credit – confidence – will be re-established. Regards to the digitalization of the financial services the real question isn’t to provide people with an electronic device but to have them eligible for its use.

In this understanding we have elaborated a model in a way to put finance providers in the picture of the guidelines provided by the international financial establishment, to find out a suitable solution and facilitate the access of the entrepreneurs to the source of capital. The Figure of the Post https://ascaniograziosi.net/2017/06/15/investment-proposal-fundraising/ highlights the logic of the approach and the avenues to achieve inclusive growth.