News

AFRICA. A CONTINENT OF INVESTMENT OPPORTUNITY: People, Objectives, Strategy and Means.

Africa has made the headlines, again, as a Continent of opportunity. We said again because in past some openings have been observed but then the move didn’t last as expected. Recently the movement seems to be steady and we noticed the turning pointof the new trend after the former president Obama’s visit (2013) and announcement a US $ 2.5 billion Programme, which renewed the interest for the Continent. A year later, Mr. Elumelu – a Nigerian tycoon and banker – in an interview spelled out his vision on what to do to promote African entrepreneurial spirit: “There are some areas — flood disasters, for instance — where you must give charity. But I think the charity approach to solving other issues must be reassessed. https://www.devex.com/news/tony-elumelu-s-new-africapitalism-82590.The Africapitalism’sIdea has been spelled out; where are the African Capitalists?

The demographic trend is the basic data to look at along with the main socio-economic indicators, to catch the development’s challenges. Simply, Africa’s population has been exploding and the unemployment rate among youngsters is alarming.

By 2030, more than half of Africa’s population will reside in seven countries: Nigeria, Ethiopia, the Democratic Republic of Congo, Egypt, Tanzania, Kenya, and South Africa. But, more important, 43% of Africans will belong to the middle or upper classes, up from 39.6% in 2013, implying considerably higher demand for goods and services. By 2030, household consumption is expected to reach $2.5 trillion, up from $1.1 trillion in 2015. https://www.weforum.org/agenda/2018/03/capturing-africa-s-high-returns/

At the very recent African Continental Free Trade Area (CFTA) held in Kigali, Ruanda (21/03/2018) it has been predicted that Africa will create a single market of up to 1.2 billion people and a collective GDP of more than $2 trillion. The United Nations Conference on Trade and Development also predicts that reducing intra-African tariffs – one of the conditions of AfCFTA – “could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.”

Over the past four decades we achieved frequent journeys to the Continent and actually cumulated missions in some eighteen Countries both Anglophone and Francophone Regions, having been resident in four Countries. This provided us with a privileged first-hand information, which we decided to complete by reviewing the overwhelming narrative on the matter and, in particular, we focused on the investment opportunity: where and how to invest?

In this context the real question has been: how much social objective could be compatible with a sustainable intervention? The answer may be articulated is in the below mathematical function:

 

Social performance= F (ED-enterprise development; IGA-family income; FA-food aid)

 

Source: Ascanio Graziosi, Financial Inclusion, Give people a job, not a loan. https://itunes.apple.com/us/book/id1116912686

It should be clear that although any organization is social oriented, the degree of achieving a social mission could be quite different whether it works in the segment of enterprise development (accumulation) or income generating activities (increase family income) or food security distribution of basic food to very poor people.

Besides, it must be taken into account that that the bearers of specific interests (financiers, borrowers, investors, sponsors) dealing with business in the above segments may react differently in relation to the market conditions along with their vision, objectives and means available.

In this understanding we have focused on the segment of enterprise development, on the assumption that Enterprises are the backbone of countries’ economy. Moreover, there is a need to give people a job and not a loan, on the grounds that empowering people is the vehicle to mitigate the poverty: this is the main message we detected from the recommendations and suggestions released by the international financial establishment (2030 Agenda for SDGs, CGAP, AfDB, OECD, Basel III and others), which phased out the old-fashion idea to provide credit to mitigate poverty, unless the intervention is sustainable, transparent and affordable.

We do think that it is of utmost importance to promote opportunities around the giant projects that are reshaping Africa, to have a productive impact on the communities. Indeed, the big infrastructure projects although being a condition for a solid development, they aren’t enough for a real take-off, which ask for the promotion of enterprises. When you click the following line

(9)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 this ideal spine and fulfil their aspirations and needs. But this is just an example, opportunity being available everywhere.

Then the question has been: how to translate in the field activity the proposed approach? We carried out a Feasibility Study THE GATEWAY TO AFRICA INCLUSIVE GROWTH – JAMBO FUND, which is a suitable approach to make it happen poverty mitigation and countries’ inclusive growth via job creation and people empowerment. Although the Continent is the reference (it was necessary to have a landscape to refer to) the Model is suitable for region and country level world-wide. Moreover, the Model is propaedeutic for working out a Business Plan at micro and macro level: it is just a matter to apply the proposed methodology.  Besides a ROI the investors will benefit of Marketing Return by improving their images as social oriented development actors.

There are four basic questions we endeavoured an answer: Who?Why? How? Where?It is just a matter to click the following line:  https://www.morebooks.de/store/gb/book/the-gateway-to-africa-inclusive-growth-jambo-fund/isbn/978-620-2-28375-5

AFRICA. A CONTINENT OF INVESTMENT OPPORTUNITY: People, Objectives, Strategy and Means.

Africa has made the headlines, again, as a Continent of opportunity. We said again because in past some openings have been observed but then the move didn’t last as expected. Recently the movement seems to be steady and we noticed the turning pointof the new trend after the former president Obama’s visit (2013) and announcement a US $ 2.5 billion Programme, which renewed the interest for the Continent. A year later, Mr. Elumelu – a Nigerian tycoon and banker – in an interview spelled out his vision on what to do to promote African entrepreneurial spirit: “There are some areas — flood disasters, for instance — where you must give charity. But I think the charity approach to solving other issues must be reassessed. https://www.devex.com/news/tony-elumelu-s-new-africapitalism-82590.The Africapitalism’sIdea has been spelled out; where are the African Capitalists?

The demographic trend is the basic data to look at along with the main socio-economic indicators, to catch the development’s challenges. Simply, Africa’s population has been exploding and the unemployment rate among youngsters is alarming.

By 2030, more than half of Africa’s population will reside in seven countries: Nigeria, Ethiopia, the Democratic Republic of Congo, Egypt, Tanzania, Kenya, and South Africa. But, more important, 43% of Africans will belong to the middle or upper classes, up from 39.6% in 2013, implying considerably higher demand for goods and services. By 2030, household consumption is expected to reach $2.5 trillion, up from $1.1 trillion in 2015. https://www.weforum.org/agenda/2018/03/capturing-africa-s-high-returns/

At the very recent African Continental Free Trade Area (CFTA) held in Kigali, Ruanda (21/03/2018) it has been predicted that Africa will create a single market of up to 1.2 billion people and a collective GDP of more than $2 trillion. The United Nations Conference on Trade and Development also predicts that reducing intra-African tariffs – one of the conditions of AfCFTA – “could bring $3.6 billion in welfare gains to the continent through a boost in production and cheaper goods.”

Over the past four decades we achieved frequent journeys to the Continent and actually cumulated missions in some eighteen Countries both Anglophone and Francophone Regions, having been resident in four Countries. This provided us with a privileged first-hand information, which we decided to complete by reviewing the overwhelming narrative on the matter and, in particular, we focused on the investment opportunity: where and how to invest?

In this context the real question has been: how much social objective could be compatible with a sustainable intervention? The answer may be articulated is in the below mathematical function:

 

Social performance= F (ED-enterprise development; IGA-family income; FA-food aid)

 

Source: Ascanio Graziosi, Financial Inclusion, Give people a job, not a loan. https://itunes.apple.com/us/book/id1116912686

It should be clear that although any organization is social oriented, the degree of achieving a social mission could be quite different whether it works in the segment of enterprise development (accumulation) or income generating activities (increase family income) or food security distribution of basic food to very poor people.

Besides, it must be taken into account that that the bearers of specific interests (financiers, borrowers, investors, sponsors) dealing with business in the above segments may react differently in relation to the market conditions along with their vision, objectives and means available.

In this understanding we have focused on the segment of enterprise development, on the assumption that Enterprises are the backbone of countries’ economy. Moreover, there is a need to give people a job and not a loan, on the grounds that empowering people is the vehicle to mitigate the poverty: this is the main message we detected from the recommendations and suggestions released by the international financial establishment (2030 Agenda for SDGs, CGAP, AfDB, OECD, Basel III and others), which phased out the old-fashion idea to provide credit to mitigate poverty, unless the intervention is sustainable, transparent and affordable.

We do think that it is of utmost importance to promote opportunities around the giant projects that are reshaping Africa, to have a productive impact on the communities. Indeed, the big infrastructure projects although being a condition for a solid development, they aren’t enough for a real take-off, which ask for the promotion of enterprises. When you click the following line

(9)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 this ideal spine and fulfil their aspirations and needs. But this is just an example, opportunity being available everywhere.

Then the question has been: how to translate in the field activity the proposed approach? We carried out a Feasibility Study THE GATEWAY TO AFRICA INCLUSIVE GROWTH – JAMBO FUND, which is a suitable approach to make it happen poverty mitigation and countries’ inclusive growth via job creation and people empowerment. Although the Continent is the reference (it was necessary to have a landscape to refer to) the Model is suitable for region and country level world-wide. Moreover, the Model is propaedeutic for working out a Business Plan at micro and macro level: it is just a matter to apply the proposed methodology.  Besides a ROI the investors will benefit of Marketing Return by improving their images as social oriented development actors.

There are four basic questions we endeavoured an answer: Who?Why? How? Where?It is just a matter to click the following line:  https://www.morebooks.de/store/gb/book/the-gateway-to-africa-inclusive-growth-jambo-fund/isbn/978-620-2-28375-5

TOWARDS INCLUSIVE GROWTH

Inclusive growth is relatively recent concept dealing with objectives, means and strategy to empower either people or segment of market via economic development. A comprehensive understanding may be taken from the documents and papers made available by the main international organisations like 2030 Agenda for SDGs, CGAP, AfDB, OCED, Basel III and institutions of the international financial establishment, which in a short span between end of 2015 and beginning 2016 released recommendations and suggestions on how to deal with social objectives and poverty mitigation.

There is a wide consensus on the core business of whatsoever intervention: sustainability for the providers, affordability for the beneficiaries, transparency of the interventions along with a tangible impact on the related communities.

In this context the real question is: how much social objective is compatible with a sustainable intervention? The answer may be articulated is in the below mathematical function:

 

Social performance = F (ED-enterprise development; IGA-family income; FA-food aid)

 

In this picture it should be clear that although any organization is social oriented, the degree of achieving a social mission could be quite different whether the organization is in the segment of enterprise development (accumulation) or income generating activities (increase family, income or food security distribution of basic food to very poor people).

In practice there should be a set of rules to be conceived in harmony with a particular environment such as tradition, unwritten procedures, institutional framework and so on. However, it must be taken into account that that the bearers of specific interests (financiers, borrowers, investors, sponsors) may react differently in relation to the market conditions along with their vision, objectives and means available.

In our Book Financial Inclusion (https://itunes.apple.com/us/book/id1116912686)   we redesigned the entire architecture of the approach in favour of poor people within a new paradigm and actually replacing the CREDIT-BASED ECONOMY with COMMUNITY-BASED WAY TO DEVELOPMENT, referring to the works released by above mentioned institutions, which inspired the paradigm.

How to translate in the field activity the proposed approach? In our just released eBook, we have made a further step ahead and tried to answer to the question: https://www.morebooks.shop/bookprice_offer_2bb9110d4473a6c2f220d662a16b4729e850b118?auth_token=d3d3LmVkaXRpb25zLXVlLmNvbTo0ZTViNjVjMDdhNjBhNmRlMTM0MzBjZTc5NjNiMjg5Mw%3D%3D&locale=fr&currency=EUR

Actually we carried out a feasibility study THE GATEWAY TO AFRICA INCLUSIVE GROWTH – JAMBO FUND, which is a suitable approach to make it happen poverty mitigation and countries’ economy growth via job creation and people empowerment. Although the Continent is the reference (it was necessary to have a landscape to refer to) the Model is suitable at region and country level world-wide. Moreover, the study provides the Model for a business plan: it is just a matter to apply the proposed methodology.

 

HOW TO CONVERT AN IDEA INTO A PROJECT AND LAUCNH A FUNDRAISING CAMPAIGN? – JAMBO FUND CASE

An Idea isn’t a Project because you have to convert it into a venture, starting with a feasibility study going through assumptions, justifications and work out a business plan. The promoter’s professional profile should be in line with the proposal.

Our question/idea has been: how to strengthen the Private sector’s development programmes aimed at supporting and financing small and medium business, which are the backbone of the national economies?

Firstly, we have reviewed the narrative on development finance issues focusing on Africa that has made, again, the headlines as a Continent of opportunities, which have been estimated at billion $ 1.5. We completed a forty pages Feasibility Study along with a Swot Analysis and concluded to launch JAMBO FUND.

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 in 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, because a Project is not all the time an opportunity, we have proved 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.

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:https://www.amazon.com/kindle/dp/B01ENJP37S/ref=rdr_kindle_ext_eos_detail  .Accordingly, we have elaborated a conceptual framework that has been visualized in the Figure https://www.linkedin.com/in/ascanio-graziosi-968ba43/detail/recent-activity/shares/, 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 philanthropist.

Final Step. On the grounds of above and encouraged by the positive comments, we have launched the Fundraising Campaign and here the highlights the FUND’s features.

JAMBO (Swahili salutations) isn’t a fund as usual (Extract from 40-page Project Document Feasibility Study):

A.  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: (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 digitalisation providers. It has a twofold objective: to provide financial resources to UNDERSERVED ENTREPRENEURSand 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 an ROI above 3%; besides, there is a non-negligible Investors’ image return by 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 (see Figure), which should be discussed with the Founders, visualising two ways to go: 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 seed capital along with the African Country where to register the Venture Company shall be discussed with a restricted Group of the Founders: Investment Companies, Firms, Private Investors, Donors, Financial Institutions.

You will make the history of promoting the Gateway to Africa’s inclusive growth.

Subscribers will receive a copy of the Feasibility Study: JAMBO FUND, Africa’s Gateway to Inclusive Growth. Truly interested Investors may have more information: graziosiascanio@aol.com or via Skype.

 

 

BRINGING ENTREPRENEURS AND FINANCIERS TOGETHER

The use of financial leverage to the business isn’t an easy job because it means to provide entrepreneurs with what they really need and doing it on a sustainable basis at an affordable price. Meantime the borrower has to present a sound project.

The job to bring together both actors requires experience and expertise above the ground. Our Practice has a daily exposure to evaluate the risk and to find out a meeting point to finance valid, viable and sustainable projects.

We will welcome valid and viable Funding Requests aiming at expanding business along with real estate investment supported by good market perspectives and a strong  business plan.

 

GIVE PEOPLE A JOB, NOT A LOAN

So, they may or may not buy a WhatsApp in freedom and independence. The electronic devices should empower people; if not there could be Provider’s disillusion, Client’s illusion and likely Community’ financial implosion.  Financial inclusion isn’t the objective, but a tool to achieve inclusive growth’s goal.

The problem is to manage the field operations in a way to make it financial inclusion happens: sustainability, affordability, transparency and accessibility of the use of the financial leverage to the economy, which will continue to have a casting position, but mitigated by the community-based economy. Sustainable microfinance creates jobs. And having in mind that financial inclusion is a tool to achieve the objective countries’ inclusive growth.

This month last year, ING, Economic Division produced a report on “creating a job at the bottom of the pyramid” …  “in the developing world has to grow by a third to provide these jobs, from 400 million enterprises currently towards 537 million. Half of the required jobs are needed in Asia, followed by Africa (45%). Financial constraints are the largest obstacle for MSMEs to grow and thus provide jobs for the poor. The loan portfolio to MSMEs has to grow by 80% from $6.9 trillion to $12.4 trillion to finance the creation of so many jobs. This huge credit gap will not be closed through the traditional relationship banking model since physical branches are costly to operate, especially in remote rural areas”. And it added three questions: … But is FinTech the game changer for the traditional bricks and mortar bank model that excludes so many enterprises? How can FinTech improve access to MSME finance and lower its cost? And what technologies look most promising?

Six months before (May 2016) we provided the answers and proposed a Paradigm. Taking from the international financial establishment recommendations, the main message we detected is 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 paradigm of the financial interventions from over-indebted economy at micro and macro level to a real people’s empowerment via jobs creation and promote opportunities via Bottom-up.  https://www.linkedin.com/pulse/from-mdgs-sdgs-technologists-new-populists-ascanio-graziosi/ .

How to position before the Poverty matters? The answer is provided by the below-market segmentation by Empowering people in four big market segments. We  do say that while studying a new paradigm for solidarity, (Why capitalism is broken, https://www.linkedin.com/pulse/why-capitalism-broken-ascanio-graziosi/) the suitable way to go is to elaborate on what has been recommended by the international financial establishment:

  1. a) People in need of basic services
  2. b) People who aim at improving family budget
  3. c) People who aim at start-up business
  4. d) People who aim at growth-up business 

In the first one, the financial provider is in the presence of poverty tout-court and food aid, while the second comprises income generating activities; in the third and fourth segment the provider is in the presence of enterprise development and, in such a case, there is accumulation, which should be correctly evaluated.

Referring to Basel III’s terminology we may say that the point (a), (b), and (c), (d) indicate, respectively unserved and underserved customers. 

The features of above segments make it the difference among lender, developer and philanthropist. For financial inclusion purpose, the segments ask for an accurate investigation, to understand which kind of service may be added to an electronic device.

In line with the President Obama Initiative for Africa, Mr.Elumelu – Nigerian tycoon and banker – in an interview spelt out his vision on what to do to promote African entrepreneurial spirit: “There are some areas — flood disasters, for instance — where you must give charity. But I think the charity approach to solving other issues must be reassessed. It’s all about sustainability; it’s all about self-reliance. It’s catalytic philanthropy”. (https://www.devex.com/news/tony-elumelu-s-new-africapitalism-82590).

In a Post, Graham Wright urged for a revisit the design and delivery of digital credit: https://www.linkedin.com/pulse/digital-credit-have-we-been-here-before-microfinance-graham-wrighthttps://www.linkedin.com/pulse/we-really-financially-excluding-27-million-digital-credit-wright.

Summing up, digital providers may benefit a lot cooperating with financial providers, when it comes to design a model that has to match-up finance and technology, which asks for expertise and experience in financial services above the ground. For more: https://www.linkedin.com/pulse/open-letter-fintech-ascanio-graziosi/ 

A proposal on how to ground field operations, the Exhibit (https://ascaniograziosi.net/2017/06/15/investment-proposal-fundraising/ ) highlights the logic of the approach and the avenues to achieve inclusive growth via business at macro and micro level because sustainable finance is the backbone of the countries’ economies.

HOW TO DEAL WITH FINANCIAL INCLUSION MATTERS.

Our own data indicate that four out five MFIs aren’t sustainable. Under the circumstances is it sensible to get into financial inclusion activities? It is believed that it is just a matter to provide people with a smart electronic device to sort out from the situation. This is decidedly wrong, as it has come out from a Conversation on the matter https://www.linkedin.com/in/ascanio-graziosi-968ba43/detail/recent-activity/shares/.

Financial inclusion aims at inclusive growth throughout empowering people; so it is a good step to look into, among others:

  • How to manage financial inclusion at micro and macro level?
  • Which credit model to use?
  • How to approach the market and design new products?
  • How to campaign new products?
  • How to negotiate and link with digital providers?
  • How to approach poverty matters?
  • How to deal with Start-up and Growth-up business?
  • How to link with financial providers?

Going through “FINANCIAL INCLUSION – Give people a job, not a loan” you can find out how to provide an answer to above questions: it is just a matter to click  https://www.amazon.com/kindle/dp/B01ENJP37S/ref=rdr_kindle_ext_eos_detail . We have elaborated a paradigm matching up experience and expertise accumulated in more than three decades’ field activities with the recent recommendations issued by the international financial establishment. Good reading.