Converting Informally Owned Village Assets into Financial Assets

Converting Informally Owned Village Assets into Financial Assets

Namibia
Organization type: 
for profit
Budget: 
< $1,000
Project Summary
Elevator Pitch

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

The poor in African villages have physical assets, which are often owned informally (no property rights), and thus cannot be used as collateral to generate income. The solution is to convert unregistered assets (land, water, forest and cattle) owned by people in villages into financial assets through creation of legal village enterprises.

About Project

Problem: What problem is this project trying to address?

Rural population have assets such as land, cattle, houses, forests and other resources, but they do not have property right or title deeds on these resources and therefore they cannot use these assets as collateral.

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

The aim of the solution is to strengthen the village economies and stimulate production in rural areas, by empowering rural population to actively engage in the production process and using their resource endowment. Various research papers indicates that among the wealth that is held by villagers in many African countries tend to be less diversified and concentrated more in physical and non-tradable assets such as land and cattle and very little off their wealth held in the form of financial assets. The poor in African villages have assets, which are often owned informally (no property rights), and thus cannot be used as collateral to generate capital. The solution is unique because it will lead to the following: Conversion of physical/unproductive assets into financial assets: Idle physical assets such as land, labour, water and other unproductive resources in villages will be put to good use and generate profits and converted into liquid/financial assets. These new financial assets can be used to put in motion more production in rural areas and villages. Share Ownership: Individuals and families in villages will have the opportunity to own shares in companies (legal village enterprise) that will be set up to undertake production at village level. Village enterprises will be owned by villages. Access to finance: New Village SMEs with new balance sheet will access finance through banks, pension funds and other lenders, something individual villages could not do despite possessing the physical assets. Integrate village economies into modern economy and transformation of villages into production and business centres.
Impact: How does it Work

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

Ever since the independence of Namibia, socio-economic assessments of these country have pointed out that Namibia still have high levels of poverty and inequality despite substantial amount of public funds injected to address poverty and income inequality. The Namibian Government have for the past fifteen years allocated the biggest part of its national budgets to education, health and other social spending allocations in an effort to address poverty but the unemployment and poverty situation continue to worsen. The Proposal will address this weakness by ensuring that the rural poor take ownership of their own destiny through converting unproductive, unregistered assets into financial assets which will give rural population access to finance. Poverty and Income Inequality Reach: Poverty depends on average income level and extent of inequality. Hence, business enterprise (Village SME) growth in rural areas will affect poverty and reduce income inequality through its impact on the level of rural income. By virtue of share ownership and job creation, the rural population income level will rise substantially and this will help close the income gap between the poor and the rich , urban and rural. The emergence of new business segments in rural areas and the resulting rise in GDP will translate in more tax revenue for governments. The rise in government revenue will enable government to increase social spending on health, education, housing, social welfare and more business support to close the inequality gap. Gender Participation: Women are majority in rural areas and it is estimated that with increased financing to rural business entrepreneurs, many women operating on informal basis will be converted into formal SMEs and grow their business. Income levels for women is therefore expected to increase substantially, as they gain access to finance from established lending institutions.
About You
Organization:
First Capital Namibia
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Section 1: About You
First Name

Martin

Last Name

Mwinga

Country
Section 2: About Your Organization
Is your initiative connected to an established organization?

Organization Name

First Capital Namibia

Organization Phone

264 61 401326

Organization Address

4461 Windhoek

Organization Country

, XX

How long has this organization been operating?

Your idea
Country your work focuses on
Innovation
Do you have a patent for this idea?

Impact
Actions

There might be old laws that need to be reviewed and amended to allow the transfer of communal or rural land and resources to new business entities. most of the villages resort under a traditional chief who is the custodian of the land and it might take time to reach agreement

Results

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What is the average monthly household income in your target community, in US Dollars?

Less than $50

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Sustainability
What stage is your project in?

Idea phase

Does your organization have a board of directors or an advisory board?

Yes

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The Story
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Additional
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