End to End Solution

End to End Solution

Kabul, AfghanistanKabul, Afghanistan
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Idea
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

It aims to offer financial services and create opportunities through an operationally self-sustainable, innovative, development financial system.

About Project

Problem: What problem is this project trying to address?

Access is only available to small number of clients.The recipients of small business have the ideas but do not have the commercial awareness of their business. The clients are not aware whether there are people who are also doing similar type of businesses so they can't have business partnerships. Most of the MFI clients face the problems of selling their products in the market as either they doesn't know about the supply chain management. Clients also face the problem of repaying the amount by going physically to the branch.The client and the MFI are interested in the repayments and disbursement and they don't want to be stakeholder in the each other business.Most loans are not utilized for the purpose for which they are obtained or for business purpose hampering the economic activity.

Solution: What is the proposed solution? Please be specific!

Evolving the role of the MFI and DFI by involving it more in the businesses of the clients. It will act as a procurement agent of the equipment needed for business, Business adviser of the client's business, using mobile Banking for the repayments, Building community unions of the people doing similar business so clients instead of competing with each other co-operate with each other, Manage the supply chain so that the end products of the transported to the market place and establishment of the market place for the products. It will make the whole process efficient and MFI will not be just a financial service provider. It will increase the business awareness which will help a great deal in the community development.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

If some wants to have carpet weaving business and approaches for the loan instead of giving cash we will purchase the equipment of carpet for the client from the registered shop (It will also solve the interest issue of conservative Muslims) and get the discount from the supplier as we will be purchasing in bulk for our customers. We will ask the customer that there are other people who are doing the same business in the area so it will be better if you all can work together and develop the business together by our help or you can establish our own business individually. In case of individual business we determine the percentage of profit 1.e inflation + reasonable profit (8% + 7%) whose installments are paid through the mobile network. No need of going to branches. For business/ community unions MFI act as a chain manager and supply the products of the MFI business union from their working place to the market and sell it there. The supply chain management is very critical in case of fresh fruits or vegetables.The MFI in market will have contact with purchasers so they can take orders from market and ask the community union to do carpet weaving. For products like carpets, clothes and other non-perishable products MFI will help in opening a store in the city near by where one member of the clients and one member of the MFI will run it. The profit and losses will be shared equally by the MFI and the clients so both will be involved in each other business.The MFI and business union will also help the people in community to get training and be a potential client (partner).
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

First Microfinance Bank Afghanistan FINCA OXUS Development Network HOPE FOR LIFE These all MFIs/ Banks only provide the financial facility to their clients and still acting as a traditional MFI. Sometimes they are monitoring the business activities but it is also very informal.They are also not using the Mobile network for the repayment so mostly they are dealing with the physical cash and physically involvement of the clients. All the efforts are done to disburse the loan and make the clients repay on time. In my idea the MFI is acting as procurement agent, business adviser, community developer, supply chain manager, Marketing agent and Market development. In short Financial Institution will lead the whole economic activity in the region. Mobile banking will also be used.
Team

Founding Story

During my professional experience met with alot of clients and interviewed them and worked with a dozen international microfinance organizations. It is more of a connecting the dots what will make the process more efficient and more effective. Once i was visiting the clients in the rural areas of the Afghanistan the idea came into my mind that their should be a system which can evolve this industry and cater the solutions for all the stakeholders. I am sure this idea will remove most of the hindrances to access, operational sustainability and market awareness of most of the clients.
About You
Organization:
Mutahid Development Financial Institution
About You
First Name

Mohsin Ali

Last Name

Khan

About Your Organization
Organization Name

Mutahid Development Financial Institution

Organization Country

, KAB, Kabul

Country where this project is creating social impact

, KAB, Kabul

How long has your organization been operating?

1‐5 years

Has the organization received awards or honors? Please tell us about them

As it is a pretty new organization established by established in 2011 by consolidating 6 old MFIs who had operational sustainability problems so it has not received any awards or honors yet.

Innovation
How long have you been in operation?

Still in idea phase, but looking to launch soon

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Cost, Transparency, Quality, Equity.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

I want to change the role of the traditional MFI and traditional finance structure to provide better solution to the needs of the people who want to establish business and want to run it successfully but they don't have access to finance or market. The idea will make the repayment and disbursement process efficient, introduce the business advisory, supply chain management and selling agent role of the MFI. It will for the benefit of all and not a few individual will benefit but the whole community will be empowered. Economic empowerment will destroy the root cause of the social evils in the society.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,, Powerful incentives for financial service providers to move up-market.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

Financial service will be provided to the rural and under privileged people who do not have an access to finance and there are no banks working in their areas. The women are not allowed to work outside, go to the market to sell their products or establish shops in the markets. Both Men and Women who do not have access to the efficient transport services to transport their products to the market where a fair price of their products can be obtained. Most of the women and men in the rural areas have never been to the market in the cities and do not exactly the worth of their products. The rural people have the ideas and skills to work but normally don't the business and commercial awareness.

Could your solution work in other geographies or regions? If so, where?

Yah, my solution can work all the rural areas far from the major cities whether it is in Asia, Africa or Latin America. As the problem of the interest is removed so it will be very successful in the poor Muslim conservative like Afghanistan, Somalia, Yemen, Iran, Iraq, Syria , Libya, Pakistan etc. In African and Latin American countries where most of the work is done by the women the system will efficiently provide solutions to all their problems.

If your solution is dramatically successful, how will things be different in 10 years?

The people and especially women in the rural areas will be economically empowered. It will remove the problem of the communities who are always waiting for the grants instead it will increase awareness about the business and the poor people of the rural will participate in the economic development of the poor African, Asian and Latin American countries. If implemented in all the rural areas especially those areas in India about 100-500 million will benefit from this solution. It will help in decreasing the dis parity in the incomes of the poor and rich of the country. The economic empowerment will help in destroying the social evils in the society. The human rights violations and discrimination will be significantly reduced and every member of the community will be considered as equally valuable for the community development and prosperity.It will help in the development of the new ideas, new markets and new products. In short the world will be a better place.

What will have had to have changed to make this happen?

The awareness level of the clients need to be raised. The staff should be trained so that they can evaluate the business opportunities and advise the clients to the best of their knowledge. The Board of directors of the institution need to be convinced as MFI is entering into an area in which they have very limited experience like logistics, Marketing and Selling the products. The idea of partnering with the clients should be conveyed to the clients in an effective way so that they don't get offended by too much involvement of the MFI.

What has been the impact of your solution to date?

The idea is yet to be implemented and is in idea form. Once implemented it will have significant impact on the society.

What is your projected impact over the next five years?

In next 5 years I expect 6,000 will be working with us. I hope that 4,000 people will think of benefit from the community business union. In average each business will have 10 person each so we will have 400 new businesses and training institutes. Each person is associated to 5 dependents so it will benefit 20,000 people directly. It will improve the security situation as all these people will be against any activity which is barrier in any way to their business. It will improve the status of the women in the society and she will be the bread earner for her family.The distance between the cities and rural areas will be reduced due to the efficient supply chain management.

What barriers might hinder the success of your project? How do you plan to overcome them?

Selling the idea of the solution to the clients will be a bit difficult as they may get offended by too much involvement of the MFI. Effective communication should be done.

Convince the Board to enter into a more risk and new market.

MFI staff may not be able to grasp the whole picture so training and mentoring should be provided to them.

Telecom network might not entertain our customers at some times so formal agreement should be done with the operator.

The MFI store may not compete with the already established super stores in the city. Aggressive advertisement and telling people about their social responsibility to the community will overcome this problem.

There must be a relationship based on trust between MFI and business union. Trust should be build by MFI.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

Involve at least 100 people in the process, establish at least 10 business unions and connect them with supply chain.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Identify the areas and research about the business opportunities, distance from city check suppliers availability

Task 2

Evaluate the potential clients and form community business unions.

Task 3

Connect the business unions with the supply chain management and establish market place for the products.

Now think bigger! Identify your 12-month impact milestone

Establish at least 50 business union including at least including 500 people. The market place start selling the products.

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Evaluate the competition as the selling agent, rules for running the market place.

Task 2

Using the advocacy of the people involved in the process to attract new clients. More focus on business unions.

Task 3

Analyze the issues faced in the start up phase and tailor the procedures if required.

Sustainability
Tell us about your partnerships

MISFA is partnered with many donors. For details please visit website www.misfa.org.af

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

I will intend to target the rural areas of Afghanistan as most of the population there does not have an access to finance. Especially the project will very beneficial for the women in conservative societies like Afghanistan and other regions where the women are not allowed to go outside of the home so they can stay at their homes and act a successful business women. The economic empowerment of the under privileged women will remove many of the social evils from the society. It will motivate and build confidence of the under privileged communities to participate in sustainable development.

What type of operating environment and internal organizational factors make your innovation successful?

The environment in which the people are living in the communities and conducive for the community development. The innovation will be more successful in the rural areas and as the interest factor is also removed so it will be successful in the Muslim communities also.

The organization should willing to accept the changes and they should also be willing to support the whole process. They should be willing to accept the additional responsibilities other than financial service provision. The individual should be able to sell the idea of the community development to the people of the rural areas.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

None