Ongoing Problems with East African Humanitarian Finance

Currency Risks

• Ideally there would be a system in place where foreign investors can place money into these microloan funds for international finance
• The default rate is low, ~1%
• The problem is that their backing currency, the Tanzanian & Kenya Schilling are not particularly stable.
  • Someone needs to be willing to underwrite the currency risks
  • Or some kind of financial mechanism needs to be made to deal with the currency risks
• On further investigation it's not that much more risky than European currency and so could potentially be underwritten with charitable funding.
  • Any charitable funding that underwrites the risk though is an opportunity cost to help others through more direct means of finance
  • But direct financing implies much more administration cost - maybe we can get those down through automation.

Entrepreneurial Fears of Risk

The beneficiaries of these programs have been observed to be extremely risk averse. This makes sense as they came from extreme poverty, domestic violence, ill health and general poverty. The last thing they want is to return to it. So they are risk avoidant to a detrimental degree.

Think of it like a roulette gambler who was down nearly all their chips, then suddenly got a single number bet and came back with more money than they started, ideally they should leave the table afterwards. That's their mindset currently in aggregate but the market isn't a casino table game, a lot of risky activities in the market pay back more sustainably and they need to be able to take on some of those risks. We need to train them in some of these concepts so they're more capable of dealing with the market.

Training

On top of training entrepreneurs, including teaching them to assess risk and not constantly fear it, they need other skills we take for granted.

• Local Marketing
  • Hi Christine
• Web Marketing
  • Hi Marcus
• Web Commerce
  • Hi Marcus & Moon-sak
• Logistics Planning
  • Hi Dan, Marcus (Niemann)

Hand in Hand Service Expansions

There's a lot of growing pains in Hand-in-Hand group right now.

Internal Market

There is so much growth in their services now that there's effectively the first signs of a potential internal market. The solidarity of the group could potentially spark talks of forming some kind of internal market where they get first dibbs on the beneficiaries' products.

This is great for instilling greater solidarity but it puts tremendous responsibilites on Hand in Hand administratively.

Growing Responsibilities for Hand in Hand

Administrating such an internal market brings many challenges. In IT, administration, sales, organizing payments, etc.

Coordinating Funds

Some kind of CRM and HRM and financial tracking system needs to be put in place to deal with the explosion of granual work needed. Marcus can definitely help with coming up with some of these systems and recruiting locals to help out.

Call to Action 2022/23

• Martin made a call to action to use the skills of the AV group.
• Linkan suggested using consultants to help come up with plans for training and execution about the local markets.
• IT automations to cut down labor to administer their tasks
• Anything to increase social enterprise capacity
• Help opening up the beneficiaries to export markets since Kenya/Tanzania are net importers
  • Consumable goods are difficult because of tighter regulations that they can't meet
  • Also food in Europe is grown as an investment not as sustainable farming, hard to compete