Launch Invest Africa

Launch Invest Africa

BeninEast Orange, United States
Organization type: 
for profit
Project Stage:
Start-Up
Budget: 
$1,000 - $10,000
Project Summary
Elevator Pitch

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

Invest Africa is an online micro-investment platform dedicated to helping small enterprises in Africa get the funding they need to expand, grow and create jobs

About Project

Problem: What problem is this project trying to address?

Invest Africa aims to cater to the “missing middle” of finance: with traditional banks serving the higher end of the market and microfinance institutions (MFIs) serving the poorest of the poor, there is a gap in the financial services industry where entrepreneurs and their MSEs have little or no access to capital. There are many challenges in regards to financing SMEs in Africa: local banks and financial tend to believe that small entrepreneurs do not have the skills/capacity to run successful businesses. For private investors, the difficulty to identify promising investment opportunities, the lack of standardized reporting and adaptation to local needs are the main issues. In Sub-Saharan Africa, almost 50% of firms reported that access to finance is a major obstacle (World Bank 2009)

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

Invest Africa aims to meet this challenge by allowing individuals across the world to make micro-investments in these MSEs via an online platform: - The new crowdfunding legislation opening start-up investing using an online portal represents a tremendous opportunity to bring new investors. - Invest Africa will target an untapped market: the African Diaspora and the growing African middle-class. At the end of the investment term, the online investors receive back their principal plus a return on their investment corresponding to the interest rates paid by the entrepreneur. Invest Africa levies a fee of 10% on the total funds received through fundraising campaigns.Via an online coaching program, investors have the opportunity to contribute their business skills to the entrepreneurs in whose companies they invest. To improve the tracking systems, Invest Africa is developing an SMS-based accounting application allowing entrepreneurs to report their operations figures via text messages
Impact: How does it Work

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

Invest Africa offers a micro venture capital platform that matches promising African entrepreneurs with investors and local microfinance institutions, investments firms or NGOs. Invest Africa is creating a network of reliable local partners in all the countries we operate. These local partners are microfinance institutions, NGOs or small consulting/investments firms. Their role is to identify and select the businesses, process the money transfers and implement a monitoring and reporting system with each business. Additionally, each business must have a track record of positive cash flow for 2/3 years or be a successful former microloan client with a 100% repayment rate. Value to investors: - At the end of the investment term, the online investors receive back their original investment plus a return on investment corresponding to the interest rates repaid by the entrepreneurs. The new “Jobs Act” legislation allows Invest Africa to repay each investor the return on their investment. - As an extra incentive to investors, Invest Africa offers a rewards platform, www.investafricarewards.com, designed to incentivize investors - More transparency: entrepreneurs report their key sales, expenses and operations figures via text messages. Value to entrepreneurs: - Access to finance - An online coaching program to strengthen the connection between investors and entrepreneurs. Our online coaching program is a way to open up a line of communication between investors and entrepreneurs as well as strengthen the path to a successful investment and enterprise.
Sustainability

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

Many online platform are dedicated to raise funds for micro-credits but none of them is specifically addressing the missing middle issue. In addition, these platforms targets only occidental contributors but none of them target the African dispora community that represent a huge potential impact on Africa's economic development. As opposed to its competitors, Invest Africa plans to open its first office in Africa and to hire local employees. Moreover, Invest Africa would be the only platform to offer the innovative services below: -Rewards platform: designed to reward investors with consumer goods. -Education program: to help the entrepreneurs' communities -Affiliate program that allows various merchants to set up e-commerce stores on a a dedicated ‘Shop’ section of the website.
Team

Founding Story

Raised in Ivory Coast and France, Sandra Ntsonde founded Invest Africa during the summer 2011 after witnessing the difficulty to access expansion capital during her frequent trips to Benin (West Africa) where she is originally from.
About You
Organization:
Invest Africa
About You
First Name

Sandra

Last Name

Ntsonde

About Your Organization
Organization Name

Invest Africa

Organization Country

, NJ, East Orange

Country where this project is creating social impact
How long has your organization been operating?

Less than a year

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

The information you provide here will be used to fill in any parts of your profile that have been left blank, such as interests, organization information, and website. No contact information will be made public. Please uncheck here if you do not want this to happen..

Innovation
How long have you been in operation?

Operating for less than a year

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

Access, Transparency, Quality.

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

The goal of our solution is to allow entrepreneurs to access funds in order to expand their businesses and create employment opportunities. Our coaching program will enable an exchange of knowledge and skills by creating the opportunities for business professionals around the globe to collaborate with local entrepreneurs. The entrepreneurs will receive capital and innovation. In addition, Invest Africa is developing an SMS-based accounting mobile application that will allow entrepreneurs to report their key sales, expenses and operations figures via text messages: this will increase the tracking of the investments and the transparency of the process. In addition, an education program will support education initiatives in the entrepreneurs communities.

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

The lack of affordable financial products tailored to the needs of underserved and excluded communities,.

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?

Our solution targets former micro-credits clients based in Africa who need capital to expand their businesses. These clients are micro-entrepreneurs and small business which lack access to traditional banking services due to the lack of financing offered to entrepreneurs who already have received several micro-credits and need larger amounts of financing to expand their businesses and create employment opportunities.

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

Invest Africa aims to work in the following regions in Africa: West Africa, East Africa and Southern Africa. However, our model could work worldwide since we only need an online platform to raise the funds and local partners to assist the entrepreneurs on the field.

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

The beneficiaries of the solution are the entrepreneurs who receive funding to expand their businesses. These entrepreneurs will be able to provide for their families and to hire employees who will be able to provide for their families.The indirect beneficiaries are the extended family of the direct beneficiaries and their communities and the users of the SMS accounting application. Indeed, the success of the businesses that received investments will generate an improvement of the local SME sector, the employment market and the living standards. In addition, the education and coaching program will provide services to the entire communities and will contribute to the economic growth in the areas where Invest Africa operates. If our solution is successful, we could observe the development of the SME throughout Africa. This sector is underdeveloped in Africa, even though it represents a vital sector to drive economic growth (SME account for 57% of employment in developed countries.

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

In order to make this happen, Invest Africa would need to provide capital to a great number of local entrepreneurs and to implement a strategy to ensure their businesses are succesful. To do so, Invest Africa must implement a rigorous selection of the local partners and entrepreneurs, raise a high volume of capital via its online platform, lead them to success with our coaching program and support local development initiatives in their communities via our linked non-profit organization.

What has been the impact of your solution to date?

Invest Africa has established contracted partnerships with local institutions in the following countries: Benin, Ghana, Mali, Nigeria. As of today, Invest Africa raised $1460 via its online platform and plans to finance an agro-processing plant in Ghana.

What is your projected impact over the next five years?

As an online platform, Invest Africa will be accessible to anyone with Internet access. The platform and the team members are bilingual (English and French) which will enable Invest Africa to develop in the USA, Europe and Africa and gain millions of users over the years. If successful, Invest Africa could expand its activities in all the African regions by increasing the number local partners/entrepreneurs and set up an office in Africa.Invest Africa will track its impact through program performance indicators (total value of investments, number of enterprises who received investments, number of hours of coaching program provided...) and social and economic indicators (number of jobs created, number of local service providers who better meet entrepreneurial demand)

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

Lack of repayment: While the extremely high repayment rates among microfinance clients are encouraging, there are still potential circumstances which could lead to an investor‘s loss of all or part of his/her money. These include: political unrest, currency fluctuation, natural disasters, business failure, institutional bankruptcy or fraud, etc. Invest Africa aims to circumvent these challenges as best we can with the selective choosing of our field partners and areas of operation.
Another challenge is the difficulty to raise funds to provide funding to the entrepreneurs. The balance the risk of failure, Invest Africa plans on using various sources of funding: individuals (online investments, fundraising events), corporations (sponsorships, investments).

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

Reach 1000 online investors and provide $50000 funding to African entrepreneurs

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

Redesign the website and register the Crowdfunding platform with SEC

Task 2

Increase number of partnerships with local partners and select projects.

Task 3

Increase Traffic on the platform: an online marketing strategy to recruit targeted visitors

Now think bigger! Identify your 12-month impact milestone

Reach 10 000 online investors and provide $500 000 funding to African entrepreneurs

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

Build strategic partnerships with organizations and corporations to increase recognition and visibility

Task 2

Create a foundation to increase fundraising options and manage the coaching an Fellowship programs.

Task 3

Build a full-time management team

Sustainability
Tell us about your partnerships

Invest Africa needs to create a network of reliable local partners in all the countries we operate. These local partners are microfinance institutions, NGOs or small consulting/investments firms. Their role is to identify and select the businesses, process the money transfers and implement a monitoring and reporting system with each business.
Invest Africa has established contracted partnerships with local institutions in the following countries: Benin (Alidé), Ghana (VPWA), Mali (Fiinco Africa group), Nigeria (MICS).

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

After the first years, Invest Africa will implement the growth strategy below:
- New customers bases: In additional to its original European and American individual investors, Invest Africa will target corporations, interested in sponsoring similar sectored African businesses and the fast growing African middle/upper classes.
- Multiple locations: Invest Africa will increase its countries of operations throughout Africa.

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

Invest Africa main office will be based in Africa since the goal of the organization is to support entrepreneurship and create employment opportunities on this continent. This will also improve the cost-effectiveness of our solution since labor costs are much lower there. Invest Africa will benefit from the new US crowdfunding legislation that will allow us to offer a return on investment to our online investors and thus will help us attract a higher volume of investments. Invest Africa will also benefit from the growing interest in Africa as an investment opportunity, the fast economic growth on the continent and the growing African middle class that represent potential investors.

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

We are interested in sharing ideas and collaborate with other organizations.