Context
Prepared Aug 11 2022 to better describe what we are doing in the funding platform pilots and how that could evolve over time.
We are combining access to a collective asset with training / capacity building and tools for digitization / data sharing so FOs can accelerate their growth and maturity.
By end of Sep, want to develop a sense for what is takes to execute this playbook at an FO level over 12 months so we can figure out go-forward resource needs / budget (eg, how much do we need to invest to do 15 projects during 2023?)
Right now, DG is doing a lot which is not sustainable or scalable; “Roles over time” describes which other ecosystem actors we envision partnering with so that we can narrow our focus to core DG capabilities (tools that FOs use for digitization and sharing data, maybe raising capital to subsidize cost of assets) and let us others plug in where they can add value
What / Why | How | Roles over time | Links |
|---|---|---|---|
Provide access to collective asset. Hook to motivate digitization, critical for income generation activity, builds balance sheet which can unlock additional financial products. | FO leases asset or borrows money to purchase asset. DG will figure out how to keep cost of financing low | - DG partners with leasing business or lender; provides guarantee to help keep cost of capital low | - Leasing model discussion doc - Payback period on assets |
Provide advisory / training on biz plan + how to use the collective asset + data literacy / digitization. This ensures asset is properly utilized and FO has awareness / ability to generate and share their data | DG develops video based training content and hosts workshops. DG validates business plans, esp on offtake for whatever finished goods are being produced by the FO | In theory, resource orgs / POPIs should be supporting on biz plans, offtake, content related to FPO mgmt Leverage govt extension system capability and asset manufacturers to generate training content on the assets DG owns data literacy / training on how to use tools for digitization | Donor screens (1) opportunity summary (2) monitoring page FPO video “Roles and Responsibilities of a Shareholder” |
Data collection and management. We want FOs to have ownership of their own, high quality data assets which they can leverage for various use cases. | DG provides tools to capture key financial and governance docs needed for accessing govt subsidy programs and commercial loans (stored in data wallet / digi locker) DG provides an “asset register” and “procurement calendar” to capture basic usage stats; may be needed for funders and useful for internal FO transparency (TBD) DG provides an interface to capture key “FO maturity stats” like # of shareholders and cash balance. Can be shared internally w members and with funding platform investors (TBD) | FOs may want to use various tools to manage their business (ERP, Tally, iFPO, etc.); DG builds FS connectors with these tools so FOs can leverage the same data across various use cases | |
Use FO data to unlock additional capital (grants and working capital) and maybe even insurance. Grants provide funding leverage which complement the collective asset; WC is essential to make use of the collective asset. Unlocking this demonstrates value of digitization / data mgmt. | Provide a checklist of requirements for relevant schemes and track progress towards achieving. | Resource institution supports FO in securing this additional financing DG provides a place to capture all the relevant records / data (eg, data wallet) and a simple checklist of requirements for certain program (eg, “--% of requirements captured”) | |
Raise capital to finance assets (and capacity building + tech development). Keep cost of capital low for FOs to enable access to assets | Pool capital from impact investors who value the livelihood + climate + gender impacts of FO growth. Practically, this could be channeled directly towards capex (if DG is leasing equipment), provide loan guarantees to lenders, etc | DG serves as a BC and helps FOs access subsidized bank loans for capex (govts support banks who lend to FOs through Priority Sector Lending mandates, interest subvention + loan guarantee programs like AIF) Over time, Philanthropic capital goes towards capacity building and maintaining data capture + mgmt tools | |
Continue to build opportunity pipeline and shortlist what collective assets we want to focus on. Honing in on FO type (maturity, # of members, turnover) and assets will make it easier for us to execute and communicate with potential funders + partners. | Meet with FOs + resource institutions, host workshops, speak with equipment vendors / manufacturers, refine application process and project scoring methodology | Publish application process and selection criteria to this is more “self service” |