Africapitalism, Creating Shared Value, Community-Based Economy

1. In 2013 the US President Barak Obama visiting Africa announced a US $ 2.5 billion Programme Power Africa Initiative, which renewed the interest for the Continent.
A year later, Mr.Elumelu – a Nigerian tycoon and banker – in an interview (2014) spelled out his vision on what to do and 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 catalytic philanthropy”. For more:
In 2011 M. Porter and M. Kramer have proposed the concept of Creating Shared Value – CSV (already anticipated: Harvard Business School) and have criticized capitalism as a major cause of social, environmental, and economic problems:

We have found interesting parallelisms between Africapitalism and Creating Shared Value, the former focusing on sustainability factor, the latter criticizing capitalism: “Companies are widely thought to be prospering at the expense of their communities
Moreover, M. Harper assessed Grameen Bank (Bangladesh) 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”; currently this statement can be sustained with more facts and figures.

We are in support to above approaches and since 2011 have proposed a demarcation line among food aid, income generating activities and enterprise development (A. Graziosi Suggestions for designing new credit models, Microfinance Gateway, 06/2011 – Rated among the first five most read documents in 2011), in view of designing a sustainable credit model,; recently we have dealt with the topic “Methodological approach and ground work for achieving SDGs

2. We have elaborated on the recent documents released by the international financial establishment (WB, CGAP and UN Agenda for SDGs) and concluded that financial inclusion without economic inclusion could be a disillusion for the lender, an illusion for the client and a likely financial implosion for the community, which is well synthetized in the sub-title of the iBook “FINANCIAL INCLUSION, Give people a job not a loan”, thus re-designing the entire architecture of the approach in favor of poor people and small business as well,

Although any MFI is social oriented the degree of achieving a social mission could be quite different whether the MFI is in the segment of Enterprise Development (ED, accumulation), Income Generating Activities (IGA, increase family income) or Food Aid-Security (FAS, distribution of basic food to very poor people). The ED segment, being capable to finance small business, can create durable jobs and mitigate the poverty; the IGA segment, while addressing the households’ budget, can help families with basic needs and start small business. The FAS segment comprises people in absolutely poverty and in need for water, food aid, food security, anti-Aids or charity: this is neither micro credit nor microfinance, but micro grant and should be de-linked from credit matters.

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.

As we have extensively discussed in our iBook, the main message we detected from above sources is to move from CREDIT-BASED ECONOMY to COMMUNITY-BASED ECONOMY.

The financial leverage to business is important and even vital, of course, and its sustainable use creates jobs and opportunities, government providing an enable environment and related services. With a salary people may or may not apply for a loan and buy a smart mobile phone; in so doing the meaning of credit – confidence – will be reinstated; 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.

The operational implications of above are of great importance and we will deal with the matter.


Nowadays microfinance sector has been undergoing important changes. There is a challenge the micro finance providers shall have to face in the near future: ECONOMY OF SCALE. Those who are familiar with the field activities should be aware that the unit cost for many small size MFI could be unbearable; under the circumstances the business size can make it the difference. Talking to micro financiers they do think that outreach services either horizontal (new outlets) or vertical (new products) is the solution. In our direct experience we didn’t recommend the former way because before expanding they should put in order the house (balayer la maison, d’abord, je me souviens d’avoir dit dans une mission au Maroc), the latter is currently practiced via digitalisation of the services. In our perception of the market, the digitalisation has the same effect of the aspirin: it temporarily alleviates the illness but isn’t a therapy.
Usually, the management problems can be sorted out by keeping low the in-house unit cost and there are many ways to do it, but this matter deserves an ad-hoc discussion, because it calls in cause the review and revision of the decision-making process and could be unpopular among Board Members.

There is an ongoing trend started in 2010 when the Central banks made the first step on a supervisory and monitoring role of microfinance sector, after the release of the Basel III document on microfinance activities. The document inspired central banks in the emerging economies to make order in an uncontrolled market. Our followers may recall that we commented on above source and then published A. Graziosi – Suggestions for designing new credit models, Microfinance Gateway, 06/2011 – Rated among the first five most read documents in 2011). As a matter of fact in the past the micro finance market has been “no-man land”: Some commentators argued that microfinance sector has nothing to do with Basel III Committee!

A second step started beginning 2016  with the release of Basel III Committee document on financial inclusion  (, ). For a complete picture and understand the current and future trend of the micro financial market it could be useful going through CGAP (, Banana Skins( ) along with the Financial Sector Development for Africa ( ). We did it and published FINANCIAL INCLUSION, Give people a job not a loan, .

A third step may be predicted in the near future and most likely shall be the restructuration of the sector: the time being function of the speed of the ongoing transformation of MFI into Micro Banks. At that time the central banks might release the guidelines on how to MFI should position in the market.

Economy of scale is in an unpopular issue because will make unhappy people (not a few) sitting in the MFI board room.

The good news is that the sector doesn’t need to invent anything because everything has already been experienced by the banking systems some decades ago. What did they? They invested in culture, innovation and outsourcing advisory services.  MFI can to do it? How much is the MFI’s budget for advisory services? We know the answer. Whatsoever the case, there shall be a shrinking of the market on the ground that, as we have commented previously, some three out of four MFI aren’t performing.

The MFI alone can do very little, that’s to say nothing. The representative associations should take the lead. To our knowledge, in the ongoing financial inclusion process they have been spectators of the trend and we don’t think that they shall do something important in the future. See also: Three big challenges:


The degeneration of financial business is the dark side of the capitalism that had ups and downs since A. Smith shared his idea. After September 2007, a date that marked the beginning of the world crisis that is still ongoing, there wasn’t a real change in doing finance, but just the introduction of new regulations and restrictions to the financial markets, which have produced poor effects and even a negative impact (austerity); in some way, it looks like a dog eating the queue. It has been assumed to solve the world economy’s problems with financial engineering, keeping the technicality approach instead of changing the approach;under the circumstances it is hard to think to sort out from unemployment and poverty.

Two decades ago it has been campaigned the Globalization as a way to a prosperous world, although, at least in our view, the real question is what we call the “financialisation” of the economy, or too much liquidity floating around in search of off-shores instead of investing in the real economy.

From this point, there should be a move from Credit-Based Economy to Community-Based Economy, investing in the real economy and particularly in small-medium sized business, which are the backbone of countries’ economies and create opportunity and jobs; for more click FINANCIAL INCLUSION, Give people a job not a loan:

The paradox of current trend in the emerging economies is in the fact that the financial providers are both undercapitalized and need to change the style of management.

We have proposed “JAMBO” FUND FOR AFRICA, which objective is twofold: provide assistance and money, the former without the latter being inconsistent. The FUND aims at pooling resources to finance viable projects: everybody says that! But, JAMBO will do it within the UN Agenda for SDGs and in the framework of Basel III Committee; somebody said that, but then we will find out that there isn’t above reasoning behind. Summing up, we have elaborated from the recent issues on theme of development finance and matched it with our extensive field experience and expertise.

The author, launched “JAMBO” RISK FUND FOR AFRICA:

Mobile technology and global challenges

The mobile World Congress (27/02-02/03/17) “illustrated ways that mobile technology can be used to address major global challenges, from personalized learning to pay-as-you-go solar”.

We do think that a word of caution on the matter may add a lot to the paramount benefits of the technology. Talking about mobile phone and other smart electronic devices, the connectivity question is: should the users be eligible to connect? As the insiders of economic development issues are aware, it is the same question, sometime forty years ago, micro lenders faced when inaugurated the cycle everybody deserve a loan and in so doing neglected the eligibility criteria: we witnessed financial implosions and negative impacts on both individuals and communities.

There is the risk that history repeats itself: last century the new credo was promoted by microfinance’s pioneers who mystified the concept of the rights of the people to have an equal opportunity (GVT task) with the right to have access to credit (lender discretion). Currently, on the grounds of the digitalization, the technologists have been doing the same mistake in partnership with microfinance providers.

Why the above-mentioned pioneers have been allowed to spread their inconsistent and unsustainable credo? We tried to provide an answer (pages 7-8 and 10-14, Let’s look ahead.

At the heart of the digitalization problem the question is: how to make users eligible to a WhatsApp? We have discussed the matter and summing up, there are two levels of interpretation: macro and micro. The former take from the definition of financial inclusion “provision of financial services to unserved and underserved customers” (Basel III Committee:, which refers to customers and not people, meaning that a link with a finance provider is a pre-requisite for whatsoever financial link. The latter requires to shift from product innovation to process innovation and in so doing adding value to the product.

Does it make sense give a mobile to people with $ 2/d income? Last century they did it!. In “Open letter to Fintech” I dealt with the matter:

By and large to have an inclusive growth the “big job” is to have less unserved and better underserved customers. How to? Two lines of intervention, again , at macro and micro level: the former moving from credit-based economy to community-based economy, the latter with an appropriate market segmentation.

Those who like to have a comprehensive overview of the subject under discussion may click the above mentioned line of the iBook: a suggestion for Sunday’s reading.


• We got some interesting questions and here we would like to provide a feedback, starting from the intriguing one: which would be my role? I am a Consultant and in my advisory position I proposed a Model of intervention; then, it will be up to the Private Investors/Institutions/Funding Agencies to see who to appoint as Fund Manager and the other Executives Positions. Having conceived and designed the Model of Intervention, I am available to act as a Partner and be also involved in running the business, of course.

• Which is the scenario? We designed the FUND taking inspiration from the basic Documents/Papers recently released by the international financial establishment and, among others, Basel III Committee (, ), CGAP (, UN 2030 Agenda on SDGs and CSFI Banana Skins ( ).

• The main message we detected is that on development matters there is a need to lessen the importance of financial component of the economy, which has increased to the detriment of the real economy. Accordingly, it is essential to shift from Credit-based economy to Community-based economy. This can be achieved with the correct use of the financial leverage to the business, namely sustainable interventions. It is as easy to say as complicate to fulfil, because all the decision-making process should be revised.

• The FUND Model foresees the impact of the digitalisation to be accomplished making it the product sustainable for the providers, affordable for the clients and market transparent: this can be reached with an appropriate market segmentation.

• We elaborated on above background information on top of our extensive field experience: implementing the activities asks for, besides the necessary practice, expertise well above the ground, which can be acquired with the daily exposure to evaluate credit risk and not copy and paste.

• We have been asked about the driving belt, namely the financial institutions to be involved in FUND activities. We do have our own idea, of course, but at this moment in time, we would say that their involvement – role and responsibility – should be investigated together with the Investors.

• However, this matter should be seen together with the parallel objective of the FUND: assisting microfinance sector to have a performant position in the market, which is important not only for the single entity but for the sound achievement of the financial inclusion.

* We have forecasted that the microfinance sector very soon – likely already in progress – shall go through restructuration under the pressure of the mentioned three big challenges: Undercapitalisation, Digitalisation and New Products.

• In other words, helping lenders to assist Start-up and Growth-up Business, the FUND will advise them to be on track.

• In this picture, the interest of the micro financial providers to cooperate is well beyond the involvement in the business because the FUND will provide them with assistance to review and revise the style of management and in so doing to make the sector efficient.

• For the time being, the FUND is half- way and indeed to complete the exercise we (Investors and I) have to work out The Institutional and Administrative Arrangements, The Organisation Structure, The Decision Making process (Who decides What), The Policy & Procedures, the Countries to initially focus, etc.

• The related phases have been figured out in some slides and a tentative timetable has shown one-month time to complete the job, depending on the way the Investors will speed up the process.

• The FUND’s horizon is the Continent, opportunities being available in each one and every Country, but initially the focus will be on eight Countries, to be agreed with Investors: Ghana, Kenya, Morocco, Tunisia, Cameroon, Tanzania and Algeria.

• Finally, we invite Investors who have appetite to fil in the request of information: Then, we will inform them on the FUND double ROI – economic and social – along with viability, feasibility, opportunities and rationale.


Today I got a mail asking whether I am raising money; Am I? YES, and NOT.  Actually the FUND has twofold objective: provide assistance and money, the former without the latter being inconsistent. The FUND aims at pooling resources to finance viable projects: everybody says that! But, JAMBO will do it within the UN Agenda for SDGs and in the framework of Basel III Committee; somebody said that, but then we will find out that there isn’t above reasoning behind.

Which is FUND background? Documents and Papers of international financial establishment, which we have reviewed and revised on top of our extensive field experience and exposure to development finance matters in three Continents where, among others issues, we have designed, managed and evaluated Credit Guarantee Fund/ Trust Fund/ Grant Facility/ Revolving Fund in: Tunisia, Bosnia, Caribbean, Romania, Mali, Albania, Netherlands Antilles, Malawi, Algeria, Morocco Ghana and Russia Federation.

Moreover, Why Africa? Which assumptions?  Which justifications? Well, you may find it going through some twenty pages Proposal. Below the FUND’s features we are ready to discuss with truly interested investors:

  • FUND VISION:UN 2030 AGENDA for Sustainable Development Goals.
  • OVERALL GOAL: – AGENDA Goal 1. End poverty in all its forms everywhere and Goal 8. Promote sustained, inclusive economic growth. Both to be achieved with sustainable intervention.
  • OBJECTIVE: –Provide assistance and financial resources to Underserved Customers, as per Basel III financial inclusion’s definition, namely, small and medium business that are the backbone of the countries’ economy.
  • SPECIFIC OBJECTIVE: –To Sustain viable projects and support initiatives that empower both individuals and communities: To finance Start-up & Growth-up Business.
  • STRATEGY: Microfinance Banks, Credit Unions, Cooperative Banks, Commercial Banks and Retail Banks working as a driving belt between the FUND and SME (pure Risk Fund? Risk sharing?).
  • METHODOLOGY:Holistic approach as per to basic management criteria: sustainability, accessibility, affordability and market transparency, with a well-defined model of intervention. See: FINANCIAL INCLUSION, Give people a job not a loan

The FUND will do it by assisting (parallel objective) MFI to achieving a performing position in the market, in the projection that the sector will face the following three big challenges: UNDERCAPITALISATION, DIGITALISATION and MANAGEMENT.



Part One already posted :

Part 2 – Contents: 4. JAMBO FUND – 4. 1 Justifications & Assumptions 4.2 Fostering the emerging demand for finance 4.3 Re-frame the field activities4.4 Equity investment commitment4.5 New style of management4.6 Objectives, Methodology and Strategy4.7 Risks. Figure 1 – Putting Financial Inclusion in the GDGs picture    – Figure 2 – Actors’ role and responsibility – Figure 3 – Tentative calendar for establishing RISK FUND


There is more than one reason to anticipate 2017 a year of delivery and be positive about ‘Aspiring Africa’: talking about fifty-four Countries as one piece would be restrictive and not functional, business opportunity being available in all places.

In a more widen perspective we detected the following market challenges: A – strong demand for technical and financial assistance from entrepreneurs, B – need of fresh resources to complement financial providers’ inadequate capital, C – launch sustainable and affordable Fintech products, D –  review the style of management and decision making process of both lenders & entrepreneurs.

In this perspective we propose a FUND taking from our extensive field experience and exposure to development finance matters in three Continents where, among others issues, we have designed, managed and evaluated Credit Guarantee Fund/ Trust Fund/ Grant Facility/ Revolving Fund in the following Countries: Tunisia, Bosnia, Caribbean, Romania, Mali, Albania, Netherlands Antilles, Malawi, Algeria, Morocco Ghana and Russia Federation.


The full text will be sent to truly interested Investors

  1. (



Recently Africa has made the headlines again as a Continent of opportunity. The demographic trend is the basic data to look at along with the main economic indicators, to catch the economic development’s challenges. Simply, Africa’s population has been exploding and the unemployment rate among youngsters is alarming. By the United Nations’ estimate, 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 — basically a brand-new Argentina — every year. The importance and the implication of above data doesn’t need to be emphasized.

The Paper will be sent to truly interested Investors


To discuss with Private Investors, Investment Banks, Funding Agencies, etc., on request.


Which FUND?
4. 1 Assumptions
4.2 Fostering the emerging demand for
4.3 Re-frame the field activities
4.4 Equity investment commitment
4.5 New style of management
4.6 Objectives, Methodology and Strategy
4.7 Risks

Figure 1 – Putting Financial Inclusion in the GDGs picture
Figure 2 – Actors’ role and responsibility
Figure 3 – Tentative calendar for establishing RISK FUND


Recent field surveys confirmed our own data on Africa microfinance market: three out of four MFI aren’t competitive and for the coming year they shall face THREE BIG CHALLENGES, namely UNDERCAPITALISATION (need fresh resources to complement inadequate capital), DIGITALISATION (launch sustainable and affordable products and negotiate with digital providers) and MANAGEMENT (review style of management and decision making process).Referring to single Entity (MFI, Rural Bank, SACCO, ONG, Retail Bank, etc.) we do have two Projects “A PROJECT FOR DECISIONS MAKERS IN AFRICA”

dont la version Française nous avons lancé en 2016 “COLLOQUE SUR L’INCLUSION FINANCIERE”, which provide above institutions with advice along with fresh financial resources for their interventions to support Start-up and Growth-up business, the backbone of the countries’ economy.


We may project what could be going on referring to current trend. •      In 2017 the micro finance sector shall face the following challenges:

UNDERCAPITALISATION (the capital base is currently inadequate),

DIGITALISATION (sustainable, transparent and affordable service),

MANAGEMENT (review and revision decision making process).

  • Emerging topics: Facing peer competitors, Negotiating with digital providers, Review style of management, Expand business, Launch a new product, Check market’s position and within the institutional & organisational country framework.

For MFI innovation isn’t an option, but a need.

Ascanio Graziosi