Fiji & Malawi
Sustainable Development Goal Targeted: Decent work and economic growth
Limited education opportunities
Fundamental business education and financial education for entrepreneurs and consumers can improve economic outcomes. By simply understanding the difference between ‘good debt’ and ‘bad debt’, consumers can be guided to purchase assets, which will help increase their wealth while reducing repayment risk
Microfinance institutions charge 40+% interest on their loans, which limit the potential social impact that these loans can have. The reason for this is that many institutions have high overhead costs such as the employment of loan officers who are commonly deployed to assess applicants’ risks, which is timely and costly in a developing world context.
With limited educational opportunities and cultural factors at play microfinance can create greater problems by compounding debt problems. For example, a borrower may engage secondary or tertiary loans to pay back an original debt at far worse terms or interest rates. Compounding the problem.
In realising the eighth sustainable development goal, Project Everest has engaged in grassroots businesses in a number of developing countries with the intention to improve profitability, scale, and sustainability. Beyond advice Project Everest seeks to increase access to capital for both businesses and consumers which is intended to be offered through microlending.
In providing financial services beyond advice services, Project Everest seeks to understand the relationship between risk and return in a developing world context. Simply, risk drives returns – that is, the riskier the project, the higher the expected returns are. Therefore, to understand the level of interest we should charge for each project or individual, we need to understand the risk involved in the investment.
Teams have been employed across Fiji and Malawi to understand the issues facing proposed beneficiaries and determine meaningful experiments to test education and lending methods. In this way we can validate learning and build upon it to develop an effective business model in accordance with our methodology.
This approach will lower Project Everest’s risk in its involvement, improve the financial sustainability of its involvement, help tailor the services offered to proposed beneficiaries and to boost the social impact of its efforts in micro enterprise incubation and acceleration.
HOW IT WORKS
We’re trying to figure out a way to sustainably offer consulting services to entrepreneurs in developing economies.
Finance is about connecting people who have money with people who need money. Currently, people across Africa and Asia do not have adequate access to financial capital, which limits the opportunities and potential for them to enable a higher standard of living. By moving digital, we can pass on cost savings to our consumers, and amplify the social impact that access to lending can have.
By identifying and securing access to data sources that accurately reflect consumer behaviour and risk, we can model credit risk more accurately than loan officers. With reduced individual risk (alpha risk) and digital methods of collecting and analysing that risk further cost savings can be passed onto consumers.
What are you waiting for?
Join a team of social entrepreneurs committed to creating social change, sustainable social enterprises and achieving determined sustainability development goals across the globe. Learn leadership skills, gain personal development skills, and be part of the social change.
FarmEd is a unique technology-based consultancy service that brings agricultural expertise to smallholder farmers, to create a food supply chain that is smarter, more efficient and more profitable.
Everest Recyclable Solutions involves the implementation and optimisation of a waste collection, management, treatment, and reuse supply chain, to ensure environmentally beneficial outcomes.
Sustainable Fuel Consulting/ Rocket Stove is a clean cook stove made from recycled materials that reduces biomass usage by 50% to improve respiratory health, and resource-efficient cooking.