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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

SPORTELLO OPPORTUNITA’

SPORTELLO OPPORTUNITA’

Riteniamo possa essere utile e d’interesse per le PMI Italiane la possibilità di poter accedere a finanziamenti per programmi di espansione e innovazione a partire da 30 milioni di US $/€ tramite a FACILITY WINDOW reso disponibile da Investitori Privati. Per  informazioni sulle modalità di accesso e condizioni: graziosiascanio@aol.com

 

FUNDRAISER WANTED

The Fundraiser will assist the Fund Promoter to make contacts with high profile Investors. This is a unique opportunity that besides a ROI above the market rate does guarantee a MARKETING RETURN improving the Investors’ Image acting as a DEVELOPMENT’S ACTORS.

The FUND should have no more than five Founders who initially subscribe $ one million to start operations in selected African Countries from where there are already funding requests amounting at $ half million from Tanzania, Kenya, Côte d’Ivoire, Ghana, Nigeria and Benin; besides, requests are from Morocco and Tunisia.

Two trips to the Continent have been planned for round-up meetings with existing high-level contacts.

 

INVESTMENT PROPOSAL – Fundraising

Taking from our banking background, we will go straight to point. We would like to present a Project already shared in some conversations and here we take the opportunity to say thank you and congratulate the commentators, whose feedback encouraged this step.

This Investment-Proposal is well rooted in our field activity, particularly when we designed, managed and evaluated Credit Guarantee Fund/ Trust Fund/ Grant Facility/ Revolving Fund in Tunisia, Bosnia, Caribbean (St. Lucia), Romania, Mali, Albania, Netherlands Antilles (Curacao), Malawi, Algeria, Morocco, Ghana and Russia Federation.

The importance of business financing doesn’t need to be reiterated: Bankers/Investors did it for centuries. The proposed JAMBO FUND deal with financing the underserved customers, focusing on the small and medium enterprises, which are the backbone of the countries’ economies. https://ascaniograziosi.net/2017/02/14/jambo-twofold-objective/

JAMBO TWOFOLD OBJECTIVE is to provide financial resources to UNDERSERVED ENTREPRENEURS and assistance to UNDERCAPITALISED LENDERS to achieve common objectives and interest,  both of them being undercapitalised.

However, JAMBO isn’t just financing but much more: it is a new way to approach the market. In particular, we elaborated on both the Basel III Committee Document on Financial Inclusion and the Goal 8 of UN 2030 Agenda: “Promote inclusive and sustainable growth”. It is worthwhile to note that in the wave of digitalization, the proposed approach is of utmost importance because the basic question isn’t to provide people with a smart Mobile phone or WhatsApp but to have people eligible for its use. Under the particular circumstances, the methodology will guide the interventions in the emerging economies with a well-defined algorithm and appropriate market segmentation, as it has been visualised in the Slide – letters c and d -, which explains the methodology behind the Project.

Incidentally, although the FUND specifically refers to the Continent, the Paradigm is viable and valid for the emerging economies and country level as well. In this understanding, if there is a specific request, it can be fitted into the Model.

There are questions we have already provided with an answer like Why a Fund? Why Africa? Which assumptions? Which justifications? Where to start? How much capital to invest? Which is my position? https://www.linkedin.com/post/edit/6275982994779971584

JAMBO aims at being A GATEWAY TO AFRICA’s INCLUSIVE GROWTH, opportunities being available in each one and every country. https://ascaniograziosi.net/2017/06/01/jambo-fund-the-gateway-to-africas-inclusive-growth/

The forty pages of the Project-Document starts from the review of the narrative of Africa’s achievements, from which we detected FUND’s assumptions and justifications along with conclusions highlighting the great opportunities by sustaining the entrepreneurship and in so doing have a positive impact on the communities. 

Summing up ….:

The FUND’s features have been shared with a Group of Professionals https://www.linkedin.com/groups/4682884 and received hundreds of appreciations.

– The Business Model has been designed and confirmed by our field activity.

– Although the FUND’ horizon is the Continent, initially, the focus will be in Nigeria, Ghana, Kenya, Morocco, Tunisia, Cameroon, Tanzania and Algeria, to be confirmed by the Investors.

– The administrative and operational components will be presented as options to validate along with the proposed links with national finance providers, lending & credit policy.

– The Investors Committee will select the Fund Manager along with the place to register the business, – in Africa – where le Office shall be located (soft structure).

– The operations may be advanced by a field survey in the above-selected Countries, but it may be replaced by our contacts in the Continents: we shall have field trips for round-up meetings with the purpose to come back with a significant portfolio.

– The SME/SMI’s market niche has been growing and currently has been estimated at $ 1.5 billion (South-Saharan Regions).

–  The initial investment for grounding the activities should be above US $ half million.

– Besides the ROI, the Investors can benefit from a non-negligible marketing/image return by acting as a development’s actor: https://ascaniograziosi.net/2017/06/01/jambo-fund-the-gateway-to-africas-inclusive-growth/.

– At this stage, we are available to provide truly interested Private Investors, Entities, Funding Agencies, Donors, Finance Providers, Banks with additional information they need.

In this perspective, we look forward to reading from you: graziosiascanio@aol.com .

SEVEN QUESTIONS ABOUT JAMBO FUND

The line announcing JAMBO (Swahili salutationgot hundreds of clicks and here I congratulate those who kindly showed interest and commented on. Below, the key questions.

1-   Recently, you launched JAMBO FUND FOR AFRICA: Which is the scenario?

I designed the FUND taking inspiration from the Documents/Papers released by the international financial establishment and, among others, Basel III Committee, CGAP, UN 2030 Agenda on SDGs. With particular reference to Africa, I found it very attractive Mr. Elumelu’s  Africapitalism, a Nigerian tycoon and banker, who, in 2014, in an interview spelled out his vision on what to do to promote African entrepreneurial spirit and how to approach microfinance issues; among other, he said: “It’s all about sustainability”.

I elaborated on above background information and I designed JAMBO borrowing from my extensive field experience; in particular, I designed, managed and evaluated Credit Guarantee Fund/ Trust Fund/ Grant Facility/ Revolving Fund in the following Countries: Tunisia, Bosnia, Caribbean (St. Lucia), Romania, Mali, Albania, Netherlands Antilles (Curacao), Malawi, Algeria, Morocco, Ghana and Russia Federation. In other words, experience and expertise have been a necessary background to drawing it, which afterwards will be a requirement to run the business, which asks for accumulated daily exposure to evaluate the credit risks.

2 – Presenting JAMBO, you said that the Fund is an innovative approach, why?

JAMBO isn’t business as usual and indeed isn’t just financing but much more: it is a new way to approach the market. As a matter of statement, I elaborated on the message articulated by the financial establishment, at least how I detected it. This the best way to innovate: to introduce something new in a mechanism already in use.The reasoning behind the below Figure has synthesised the idea that justifies why and how to sustain the entrepreneurship, which had hundreds of clicks and tens appreciations. Bankers/Financiers did business over centuries and the importance of financing doesn’t need to be explained. However, under the particular circumstances, the Figure illustrates how to make interventions in favour of entrepreneurship in the emerging economy and in so doing make a tangible impact on the communities. In particular, I elaborated on the Goal 8 of UN 2030 Agenda: “Promote inclusive and sustainable growth”. In the wave of digitalization, the proposed approach is of utmost importance because the question isn’t to provide people with a smart mobile phone or WhatsApp but to have people eligible for its use.

3 – You said that the finance providers should work as a driving belt; could you explain it?

I do have my own idea, of course, but the issue should be discussed together with the Investors in connection with the parallel objective of the FUND: assisting microfinance sector, which is important not only for the single entity but for the sound achievement of the financial inclusion. The interest of the micro financial providers to cooperate is well beyond the availability of fresh resources, because JAMBO will provide them with advice to review and revise the style of management, to better meet the underserved customers’ needs.

4 – How to start operations?

JAMBO’s horizon is the Continent, opportunities being available in each one and every Country, but initially, the focus will be on some Countries to be agreed with the Investors: Nigeria, Ghana, Kenya, Morocco, Tunisia, Cameroon, Tanzania and Algeria (to be agreed). The operations may be advanced by a field survey although it isn’t necessary and indeed it may be overcome with my contacts in the Continents: I do have in mind to achieve field trips for round-up meetings with the purpose to come back with a significant portfolio.  For the time being, the FUND’s model has to be completed and I have prepared a Project-Document of some forty pages. However, the exercise has to be finalised in agreement with the Investors, who should say a word on topics that belong to them: Institutional and Administrative Arrangements, Organization Structure, Decision Making process, Policy & Procedures. On the matter, I have elaborated some slides for discussion.

5 – Where JAMBO shall be located?

The office shall be located in Africa to campaign the FUND at inception and then to be close to the Borrowers. The FUND shall have a soft structure with a FUND Manager, a national consultant and a secretary. I have worked out a tentative timetable for establishing the Fund: a month time could be the period to complete the job, depending on the way the Investors will speed up the process.

6 – Which would be your role?

I am a Consultant and in my advisory position, I proposed a Model of intervention because I do believe it is a valid and viable intervention. It will be up to the Private Investors/Institutions/Funding Agencies to appoint a Fund Manager and the other Executives Positions in the Board. Having conceived and designed the Model and being a field man I will be available to act as a Partner and be involved in running the business, of course.

7 – Why the Investors should subscribe? 

The Project-Document starts with the narrative of Africa’s economic development and from this exercise, I drew operational conclusions; justifications and assumptions have been listed in ad hoc paragraph. The investment shall have economic return and a social impact on the communities as well; also, the investors shall appreciate the return on the image, being the development’s actors for providing opportunities and reduce jobless. It is worthwhile to note that the market has been estimated at $ 1.5 billion and JAMBO has been designed to take these opportunities.

WHY 98% OF START-UPS ARE REJECTED?

Recently, the start-up topics have been the media headlines, which intrigued us and we decided to look into the matter and trying to provide an answer to the question of unsuccessful fundraising: 2% is decidedly a very low rate, which the article’s author explains with six sins.

Above all, we do think that there has been much emphasis and enthusiasm on start-up as a way to launch businesses, which has been inflated by the media; we don’t say that start-up is like a scoop, we do say that it has been overstated before evidence.

The “sins” listed in the article should be called and actually are missing points made by the fundraisers. On top of everything, there is a basic question: HOW TO SWITCH AN IDEA INTO A PROJECT: the former although being a good one isn’t a venture, the latter should comply with the feasibility’s criteria along with justifications and assumptions.

By and large, inventors aren’t necessarily entrepreneurs: they have a different way of working and different background as well. Working on an idea that has been well elaborated in a laboratory with a complete formula isn’t like running it as a business and to make it happens deserves an entrepreneurial spirit.

In the above understanding, we tried to match what the author said with what we did presenting the Project JAMBO FUND.

Going through the article’s recommendations to avoid the failures, we can say that the presentation of JAMBO FUND, since the very first announcement, avoided the “six sins” and the “Seven questions about JAMBO FUND ”, are a further justification in support of the Project (https://www.linkedin.com/post/edit/6275982994779971584): the Post spelled out the reasoning behind and why the Investors should endorse it (see also: https://ascaniograziosi.net/blog, which give account of the research we did).

We investigated on the international context and reviewed the narrative of Africa’s development trend; then, we completed the exercise with findings and conclusions, which drove to the design of JAMBO FUND AS A GATEWAY TO AFRICA’s INCLUSIVE GROWTH: vision, mission, assumptions, justifications, objectives, target. In addition to, we provided the Project with both a Model: https://www.linkedin.com/feed/update/urn:li:activity:6256035102674026496/ and indicated our career as a field man with expertise on the funds’matters.

In our line of business – financing projects – which is the relevant missing point? Taking from our field experience, we witnessed situations where projects failed because of the shortage of the necessary working capital or its size wasn’t appropriate for the business inception’s length; and when the lenders financed such projects without investigating on the working capital, they lost the money lent out: the borrowers became defaulters. Combien de fois nous avons réitéré le message sur l’importance du Fond de Roulement, à l’époque des missions dans l’Afrique Sub-Saharien ?

Fundraising is a serious matter and currently, even training courses are proposed on the subject: converting people’s failures into an opportunity!

JAMBO FUND: The Gateway to Africa’s inclusive growth

Post on 01/06/2017 https://www.linkedin.com/post/edit/6275982994779971584
The line announcing JAMBO (Swahili salutation) got hundreds of clicks and here I congratulate those who kindly showed interest and commented on. Below, the key questions.

Africa has made the headlines, again, as a Continent of opportunities, since President Obama’s announcement $ 2.5 billion Programme Power Africa Initiative, while visiting the Continent in 2013.
We found out it very attractive Africapitalism, Mr.Elumelu – Nigerian tycoon and banker – idea (2014) on how 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”.

The demographic trend is the basic data to look at, to catch the economic development’s challenges. According to UN, Africa’s population has been exploding and the unemployment rate among youngsters is alarming; the Continent shall see its current population of 1.2 billion double by the year 2050. That’s an expected growth of 42 million people every year”. The importance and the implications of above data don’t need to be emphasised.

The FUND will provide financial resources to Underserved Customers, as per Basel III financial inclusion’s definition, namely, the small and medium business that are the backbone of the countries’ economy. It will do it by assisting (parallel objective) MFI/Finance Providers to achieving a performing position in the market, in the projection that the sector will face challenges in the following three big areas: UNDERCAPITALIZATION, DIGITALISATION and MANAGEMENT.

We have finished the job and are ready for comments, inquiries and feedback from truly interested Firms, Private Investors, Institutions, Donors, Funding Agencies, Organisations, etc. and provide them with the Project-Document: graziosiascanio@aol.com

THE REASONING BEHIND “JAMBO” FUND FOR AFRICA

Above all, we would like to congratulate the 2,300 “clickers”, much more if we count those “outside LinkedIn” and in particular those who commented on https://www.linkedin.com/feed/update/urn:li:activity:6255675757557874688/

JAMBO FUND FOR AFRICA isn’t business as usual and indeed isn’t just financing but much more. It is a new way to approach the market. As a matter of statement, we elaborated on the message from the international financial establishment, at least how we detected it. This the best way to innovate: to introduce something new in a mechanism already in use.

The reasoning behind the display has synthesised the idea that justifies why and how to sustain the entrepreneurship. Bankers/Financiers did it over centuries and the importance of financing business doesn’t need to be explained.

However, under the particular circumstances, the Exhibit (not yet the final one) show up how to make interventions in favour of entrepreneurship in the emerging economy and in so doing make a tangible impact on the communities. We went through three basic documents: the UN 2030 AGENDA for SDGs, in particular, the Goal 8: “Promote inclusive and sustainable growth” (www.un.org.) along with BASEL III Committee ( http://www.bis.org ) and CGAP http://www.cgap.org/publications/new-funder-guidelines-market-systems-approach-financial-inclusion.

In our understanding, there has been a repositioning by the international financial establishment on development finance issues, because in the past the importance of the term sustainability hasn’t been emphasised as a key factor that should inform all development finance interventions. Over decades the development interventions focused on credit, sometimes easy going to credit at the grassroots level, on the assumption that everybody has the right to get it; but this isn’t true because credit means confidence and it is sanctioned when the applicant is eligible for it and it is a lender discretion. This doesn’t mean that the financial leverage to the business isn’t important; on the contrary, it is vital, on condition to use it according to the eligibility criteria. This hasn’t been all time applied and the abuse and misuse of credit have caused the financial implosions we witnessed in many countries.

This can be achieved with a credit model and following an appropriate market segmentation, as it has been widely discussed in the iBook FINANCIAL INCLUSION, Give people a job, not a loan, https://itunes.apple.com/us/book/id1116912686, which contents are the reasoning behind of the proposed ground activities.

In the wave of digitalization, the proposed approach is of utmost importance because the question isn’t to provide people with a smart mobile phone or WhatsApp, but to have people eligible for its use. There are two ways to understand digitalization: product innovation and process innovation. The former when we simply provide the client with an electronic device, the latter when the electronic device adds value to the service and creates opportunities, because without economic inclusion there will be no real inclusive inclusion.
In this context, we have proposed a new approach moving from CREDIT-BASED ECONOMY to COMMUNITY-BASED ECONOMY. thus re-designing the entire architecture of the intervention in favour of poor people and small business as well, and shift the theoretical paradigm of the financial system from over indebted economy at micro and macro level to a real people’s empowerment via jobs creation and promote opportunities.
We don’t say to restore 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.

Moving from above reasoning we have designed a RISK FUND FOR AFRICA as a business way to empower viable enterprises at both Start-up and Grow-up stage, on the grounds that there is a market worth $ 1.5 billion and JAMBO FUND has been designed to take these opportunities. Who does what and how? https://ascaniograziosi.net/2017/02/28/jambo-fund-who-does-what-and-how/

We said “elaborated” on above documents that inspired our work. But we did it borrowing from our extensive field experience dated over three decades in twenty-eight Countries and in the following ones we designed, managed and evaluated Credit Guarantee Fund/ Trust Fund/ Grant Facility/ Revolving Fund: Tunisia, Bosnia, Caribbean (St. Lucia), Romania, Mali, Albania, Netherlands Antilles (Curacao), Malawi, Algeria, Morocco, Ghana and Russia Federation. In other words, experience and expertise are a necessary background to run these kind of business, which ask for accumulated daily exposure to evaluate credit and financial risks.

JAMBO will be proposed soon as a FINANCE START-UP. Fundraising Managers are invited to join the campaign. Investors, Funding Agencies, Corporate Finance and Venture Capitalists may contact us for additional information: https://ascaniograziosi.net