Low Income (Low Consumption) – Low Saving – Low Investment - Low Productivity – Low Income (Low Consumption) – keep iterating…
The poverty vicious circle keep iterating until there is a breakthrough to cut the cycle chain. Most people think education to create skills is the key answer to breaking the cycle, but the education itself is not enough.
There should be an additional of capital and asset support beside the education.
In East Africa, the vast majority of employment options occur in the informal sector which leads to the entrepreneurship. A golden opportunity for the youth (18-35 years old) as the have the potential to unleash their entrepreneurial DNA, to create a Small-Medium Enterprises.
However, these youth must be equipped with the knowledge, skills, and opportunities that will pave the way to success.
There are youths who have entrepreneurship idea and know how to do it but don’t have any capital access opportunity, youth who already have an idea but they don’t know how to do it, and youth who want to be an entrepreneur but they don’t have any solid idea.
Meanwhile, there are many establish Small – Medium Enterprises in Africa hoping they will scale up to the bigger level. They cannot simply do it because of there are no sufficient demand or supply to scale it up. There should be more player to fill in the chain of supply and demand.
Meantime, there are many people in the world who cares about the poverty in Africa. They could be anyone who want to help to alleviate the poverty, namely corporation employees, teachers, civil servants, entrepreneurs, police, and even students.
I believe poverty exists because of the system, not because of the poor people. If the broken system is being fixed, then there are no poverty in any corner of the world.
There are many ways to improve the broken system, the way I do it is by supporting the youth, male and female to become an entrepreneur, to unleash their entrepreneurial DNA.
That is the reason why I come up with the Philanthropy Central Bank idea.
Philanthropy Central Bank initiative is a platform that supports young entrepreneur needs to establish a small-medium business with the supply from entrepreneurs and philanthropies in order to combat poverty.
How does it work...
There are two main activities which are the facilitation of the capital needs (cash or raw material from current entrepreneur) to establish a small-medium business with the loan opportunity from philanthropies and incubation for the youths to sharpen their skills and information to become a success entrepreneur.
1. Facilitation for next entrepreneur, current entrepreneur, and philanthropy
Philanthropy Central Bank (PCB) acts as the digital platform to facilitate the money from philanthropy to be loaned or leased to the youth entrepreneur business.
The youth entrepreneur can request a loan through the platform by filling the online platform that consists of business proposal template, loan money requested and expected profit sharing.
Profit sharing is the agreement of certain amount of money between the youth entrepreneur and philanthropy to reply the kind act of money loaned by the philanthropy to the youth entrepreneur.
The profit sharing is limited to 25% of the total cash loaned. The agreement profit sharing and the loaned money will be re-invest again to PCB help the other young entrepreneurs.
Meanwhile, the philanthropies that could consist of anyone who wants to put their money in PCB to help young entrepreneur can make a profile account with the available money to be loaned out. The system will be transparent in order for philanthropy to track their money.
Meantime, the supplier (current entrepreneur) can sell their product at the most competitive price. The young entrepreneur could request to the philanthropy a leasing for the specific product. The young entrepreneur and philanthropy can look the real price of the raw material in order for them to create a profit sharing agreement.
The KPI of PCB is to ensure the entrepreneur to repay the money loan and the agreement profit sharing since the operational cost comes from the agreement profit sharing before it goes to the philanthropy. (Look for the User Journey Maps and the Concept for more details)
There will be no collateral requirement for the entrepreneurs since if they cannot fulfill a certain amount of money, PCB will evaluate how their business going and give the constructive feedback and extended time to improve their business.
As a result, young entrepreneurs will be capitalized and re-capitalized, the supplier will be re-supplied, and the philanthropy could re-invest to capitalize the other young entrepreneur.
The economy wheels of the particular region will be moving rapidly.
But, before achieving that, PCB will prepare the young entrepreneur to run their businesses.
2. Incubation program
In order to transfer the skills and knowledge, PCB create an incubation program for the next youth entrepreneurs. It consists of the roadshow, ignition, workshop and mentoring.
PCB socialized the Incubation program to gather the youths who want to be an entrepreneur, to be a job creator. The registered youth will attend the ignition phase.
Ignition phase is a collection of world volunteer who works in entrepreneurship area that inspires these registered youth to strengthen the entrepreneurship mindset based on what the volunteer have done. The concept of the event is idea sharing and question-answered concept.
After they have a right and solid mindset, the young entrepreneur will be trained by doing on how to establish their business, manage their money and make it sustainable using the latest entrepreneurship tools such as lean canvas, lean start-up, javelin board, etc.
By the end of the workshop, they already know how to establish a business supported by the mentors.
d. Idea Pitching
The young entrepreneur will create their business based on their own ideas using the tools in workshop phase. They will present it to the judges to ask their opinion about the business concept. The outcome of the phase is the entrepreneur can get a constructive feedback to the business.
The entrepreneur will revise the idea based on the feedback from judges with the help from mentors. The mentor will assist the entrepreneurs to establish the business. The PCB digital platform takes a part in this phase. Therefore, in maximum 3 months, they will have their own businesses running.