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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: “The Gateway to Africa Inclusive Growth – JAMBO FUND”
https://www.morebooks.de/store/gb/book/the-gateway-to-africa-inclusive-growth-jambo-fund/isbn/978-620-2-28375-5

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:

The “Gateway to Africa Inclusive Growth – JAMBO FUND”

https://www.morebooks.de/store/gb/book/the-gateway-to-africa-inclusive-growth-jambo-fund/isbn/978-620-2-28375-5  

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 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.

APPLYING FINANCIAL INCLUSION 

Forward

There is a movement of re-thinking on development finance issues in the context of new orientations provided by the recent international financial establishment’s Documents and Papers; in particular, the focus of attention is on financial inclusion.

To properly apply financial inclusion, the first step is to investigate on micro finance trend, on the grounds that Grassroots organizations and retail banks are the main vehicles to implement in the related field activities, their network being closer to the potential beneficiaries.  In so doing, we have to provide an answer to two basic questions: * Microfinance has been proposed as a new idea, but it was genuinely a new idea?  • When, how and why was micro finance recommended as a tool to fight poverty? What’s your position?

Since 06/2011 with the publication of” Suggestions for designing a credit model” http://www.microfinancegateway.org/p/site/m/template.rc/1.9.51017/ (Rated among the first five most read documents in 2011) we spelled out our position and then, with articles and Papers; recently, we have released a Post https://www.linkedin.com/pulse/methodological-approach-ground-work-achieving-sggs-ascanio-graziosi?trk=v-feed, inspired by our research book “FINANCIAL INCLUSION, Give people a job, not a loan”.

Re-thinking on micro finance began after the industry’s implosions in Bangladesh, Bosnia, Cambodia, India, Morocco, Pakistan and Nicaragua, where some micro financial institutions (MFI) have been beset with financial problems. The microfinance’s collapse in the southern Indian state of Andhra Pradesh led to mass suicides and had a worldwide echo. The poignancy of the moment created by this dark side of microfinance has been the origin of review and revision of the whole industry. Before this tragedy, few commentators argued about the fundamentals of this appealing way of doing credit and everybody jumped on the bandwagon playing an unreliable piano score “everybody deserves a loan”. Currently, in our insight position of the financial inclusion business, we came to the conclusion that there is the risk that history could repeat itself: everybody is rushing to provide people with a WhatsApp. Why? Because it is a lucrative business, but it could be short-sighted; moreover, the imitation factor: everybody does it; again, the misunderstanding between means and objectives: financial inclusion isn’t the objective to achieve but a means to get countries’ inclusive growth within UN 2030 Agenda for SDGs. And much more.

Continue). We have provided a comprehensive answer to above basic questions and actually contributed with three specific pages to the matter (https://itunes.apple.com/us/book/id1116912686 ), besides the § “Microfinance as a product of the capitalism” in a wider picture of MICROFINANCE AND CAPITALISM. And much more, as thousands of the iBook’s readers are aware: What is the meaning of the terms finance and credit’?
What are the features of the credit market?
Are all human beings innately entrepreneurs?
Have microcredit basic notions been missed out?
Does demand have to be met at any cost?
Do human rights mean equal credit opportunity?

Microfinance re-thinking can be seen in the picture of the most recent revisions of capitalism like Creating Shared Value (Michael E. Porter, Mark R. Kramer, Harvard Business Review – CSV) and Mass Capitalism.

Porter and M. Kramer (Harvard Business School) have proposed (a couple of decades ago) the concept of Creating Shared Value (CSV). The authors have criticized capitalism as a major cause of social, environmental, and economic problems. Companies are widely thought to be prospering at the expense of their communities.http://hbr.org/2011/01/the-big-idea-creating-shared-value/

Harper analysed Grameen and Self Help Group systems and, among other things, concluded, “there is little direct evidence as to whether SHG or Grameen system is more effective at reaching the poorest people”. This was written down beginning year 2000; currently above statement can be supported by more facts and figures.

As a matter of statement, a re-thinking on financial inclusion as a new approach to development finance started between end 2015 and beginning 2016.

There are four basic Documents/Papers to  catch what has been going on development finance issues : Basel III Committee (http://www.bis.org,), CGAP (http://www.cgap.org/publications/new-funder-guidelines-market-systems-approach-financial-inclusion), UN 2030 Agenda on SDGs ( www.un.org.) and Financial Services for all , known as CSFI Banana Skins (http://www.aboutmicrofinance.com/wp-content/uploads/2016/07/Banana+Skins_07-16_v8.pdf).

With particular reference to Africa, it is worthwhile to note the activities carried out by Financial Sector Development Africa- FSDA ( http://www.fsdafrica.org/about-fsd-africa/), which aims to reduce poverty across sub-Saharan Africa by building financial markets that are efficient, robust and inclusive. In 2013 the US President Barak Obama while visiting Africa, announced a US $ 2.5 billion Programme, which renewed the interest for the Continent.

In line with the President Obama Initiative, a year later, Mr.Elumelu – 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. It’s all about sustainability; it’s all about self-reliance. It’s catalytic philanthropy”.

From Elumelu’s interview we quote: “But we have come to realize that there are better ways of impacting a huge number of people through business practices, not necessarily philanthropy”.
 We do support the idea to have a demarcation line among food aid, income generating activities and enterprise development and apply a different approach while dealing with the credit matters, which seems to be quite in line with above reasoning (https://www.devex.com/news/tony-elumelu-s-new-africapitalism-82590).

We have found interesting parallelisms of above approach with Creating Shared Value (CSV) concept that M. Porter and M. Kramer (Harvard Business School) proposed a couple of decades ago. The authors have criticized capitalism as a major cause of social, environmental, and economic problems. “   Companies are widely thought to be prospering at the expense of their communities …(20) Above-mentioned authors have analyzed   Grameen and Self Help Group systems and, among other things, concluded, “there is little direct evidence as to whether SHG or Grameen system is more effective at reaching the poorest people”. This statement has been written twenty years ago; currently, it can be supported by more facts and figures, besides the “move” of the international financial establishment.

To widen the reasoning on microfinance market at the Continent level, there is a need to make the microfinance transparent, competitive and accessible, provided that the MFI will apply rules and procedures of the country legislative framework.
To make it happen is not easy, but central banks in Africa have issued regulations and supervisory systems following the recommendation of Basel III Committee.

What’s the microfinance market looks like? From a recent field research (http://nextbillion.net/yes-microcredit-requires-subsidies-and-thats-great-news/)  “only 20 percent of MFI are truly sustainable. The other 80 percent could not maintain their current operations without social investors providing the market-rate capital. And it’s not a question of subsidy flowing to new MFIs who are scaling up. Three-quarters of subsidy in the industry flow to MFIs which are 10 years old or older”.

We don’t share the idea that micro-credit requires subsidy because it could mean going back to three decades of past mistakes, besides being not in line with SDGs.

We do think that the segment of the market (70-80% MFIs poor performing) could be restructured via mergers & acquisition and another way of pooling resources, on the likely perspective that the near future microfinance market shall go through economy of scale. Hence, the need to assist the restructuration of the sector.

Our own data confirmed above field research results at Regional level: four out five MFI in Africa micro financial market is non-performing. Here the question is: what to do? In our opinion, MFI, NGO, Rural Banks, People Banks, SACCO, Retail Banks, which deserve attention and accept the challenges – namely ready to innovate way of doing business and style of management – should be assisted with advice and resources, the former without the latter doesn’t work.

On the matter, we have a field Project that we launched some time ago “COLLOQUIUM WITH DECISION MAKERS”(https://www.linkedin.com/pulse/project-decisions-makers-africa-ascanio-graziosi?trk=mp-reader-card , which is neither training nor course of lessons, but a Colloquium on strategic issues with micro-finance top Executives in their own hub; so they don’t need to travel to Rome, London and Paris. Upon request, they will receive the Document and the Budget. This is a very important Colloquium for those who like to step in the digitalisation of the financial services, based on informed decisions.

French version “COLLOQUE SUR L’INCLUSION FINANCIERE” https://www.linkedin.com/pulse/colloque-sur-linclusion-financiere-ascanio-graziosi?trk=mp-reader-card.

It has been argued (Milford Bateman) that changes produced by the above-mentioned documents have been made to change anything; worse, above author and Phil Mader, Maren Duvendack, Lamia Karim, Jessica Gordon Nembhard, Marcus Taylor and others argued that microfinance phenomenon is all about the politics, not the economics and financial inclusion “seduced and betrayed”.

In our opinion the problem isn’t whether or not believe the establishment, but to manage the field operations in a way to make it inclusive growth 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 micro finance creates jobs. Moreover, it could be very important that the establishment disseminate and promote what they said.

What’s wrong with microfinance? One thing, only: it has been proposed by Populists and not Economists and then manipulated by low profile politicians, by purpose. Does microfinance alleviate poverty?

We do think that a basic mistake has been the lack of a paradigm; the Populists said: distribute credit, they will pay back, which is a dogma. At this point, the question could be: why the international financial establishment allowed them to promote it? We have shared with Members and Followers of our Group the answer (FINANCIAL AND ECONOMIC INCLUSION: https://www.linkedin.com/groups/4682884 .

To have a more comprehensive explanation we have dedicated many pages to the matters (two paragraphs and two chapters of our iBook) matter and here there isn’t enough room explain, the question being a little complicated and interconnected with the financial capitalism   :https://www.amazon.com/Financial-Inclusion-Give-people-loan-ebook/dp/B01ENJP37S/ref=sr_1_1?ie=UTF8&qid=1489340682&sr=8-1&keywords=financial+inclusion+ascanio.

As we said over the past decades we started elaborating on how to design a credit model, taking from our field experience in leadership position in the emerging economies. Eventually, in 2010 Basel III Committee released a document on microfinance activities, which provided us with a reference to place the credit model in the picture of the countries’ institutional and organisation framework, central banks having adopted Basel III’s recommendations. A further step has been done a couple of years ago when above cited Basel III issued a document on financial inclusion, which we read in conjunction with UN 2030 Agenda for SDGs, CGAP Papers and others documents.

Taking from the desk research in aggregation with the consultancy activities, we published FINANCIAL INCLUSION, Give people a job, not a loan”  https://www.linkedin.com/pulse/methodological-approach-ground-work-achieving-sggs-ascanio-graziosi?trk=v-feed, which sub-title synthesized the proposed new approach to development finance interventions.

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 favour 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.

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; moreover, we haven’t assumed interventions from the public sector, but the private sector taking the lead and get really involved.

The financial leverage to business is important and even vital, of course, 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; 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 a WhatsApp 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 capital. 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 DESIGN NEW CREDIT MODEL/SERVICE We proposed four steps to design a new Credit Model/Service:1)      Position the MFI/Organisation in the financial market (slide page 27)

1)      Position the MFI/Organisation in the financial market (slide page 27)

2)      Place the Business within the country institutional & organisational framework (87)

3)      Design a credit model/service within the regulatory framework, as per Basel III (93)

4)      Find out your market’s niche via the proposed market segmentation. (204).

We took the slides from the iBook “FINANCIAL INCLUSION, Give people a job, not a loan”. Although we would like to provide you with more, there isn’t room enough. Besides, the practical problem, we can’t do it because it will be unfair competition with our professional colleagues. However, you can download it (https://www.amazon.com/Financial-Inclusion-Give-people-loan-ebook/dp/B01ENJP37S/ref=sr_1_1?ie=UTF8&qid=1489340682&sr=8-1&keywords=financial+inclusion+ascanio ) for a very cheap price and benefit much more beyond and above the slides, in a comprehensive understanding.

(Continue) Last week we introduced the works and quoted M.E. Porter and M.R. Kramer (Harvard Business School), Mr Mr Elumelu, Milford Bateman, Kate Maclean, James K. Galbraith and others, who argued that microfinance phenomenon is all about the politics (“seduced and betrayed”). Here we would like to add: Does microfinance alleviate poverty? https://www.linkedin.com/pulse/does-microfinance-alleviate-poverty-frithjof-arp-phd-sfhea. And quote Graham Wright’s Posts, who 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-wright. https://www.linkedin.com/pulse/we-really-financially-excluding-27-million-digital-credit-wright.

A very recent Paper released by CGAP on Consumer credit “raises serious consumer protection concerns”. http://www.cgap.org/publications/consumer-protection-digital-credit#.WaQ2MWN2voc.linkedinWith a particular reference to digitalisation we wrote the OPEN LETTER TO FINTECH https://www.linkedin.com/pulse/open-letter-fintech-ascanio-graziosi and suggested to review the approach to digitalisation in a way to shift from PRODUCT INNOVATION to PROCESS INNOVATION: https://www.linkedin.com/pulse/open-letter-fintech-ascanio-graziosi 

We do think that a thousand followers of the Conversation https://www.linkedin.com/in/ascanio-graziosi-968ba43/detail/recent-activity/shares/ deserve consideration and in our Moderator position, we have decided to make available the iBook “FINANCIAL INCLUSION – Give people a job, not a loan” at a very cheap price for the weekend only, starting Sept. 2 at 8h AM and ending Sept. 3 at 12h. https://www.amazon.com/kindle/dp/B01ENJP37S/ref=rdr_kindle_ext_eos_detail