Discovering Outliers (DO)
Published on July 7, 2014 um 16:54
Summary of your idea
My idea is to create a platform called 'Discovering Outliers'(DO) online which will serve as a marketplace for innovative businesses to get equipment loans directly from corporate and individual impact investors while utilizing the purchased equipment/assets as collateral until the loan is repaid. For example, when a businessman in Nigeria receives N7million ($43,750)via the marketplace to purchase equipment for his new SME which provides Laundromat services, all assets in his company- to the value of N7million($43,750) belong to the different impact investors that participated in the N7milion ($43,750) funding round for him until he offsets the debt within the agreed loan tenure. This unique type of asset-backed loan facility is virtually non-existent from conventional banking establishments in Nigeria for small businesses. One of the main activities includes working closely with the 31 business incubators, co-working spaces and other stakeholders currently existing in Nigeria to recommend/feature outstanding SMEs every month on the platform who will receive financing investors. This activity ensures that sustainable SMEs will populate the platform. Each recommended SMEs video profile and other details will be featured on the marketplace and will be accessible only to a growing pool of accredited investors. Other activities will include accrediting corporate and individual impact investors who are willing to invest between N100, 000 ($625) and N100million ($625, 000) loans yearly in any SME of his/her choice that is featured in 'Discovering Outliers' (DO)platform. Impact investors can charge from 0% to a maximum of 5% as interest rate. The objective of charging an interest rate is to keep recipients accountable not necessarily to make a profit; the objective of having a ceiling on interest rates is to keep the cost of capital reasonable for SMEs.
Expected impact of your idea on sustainable development
More than 2,000 SME's will be able to receive an average of N16million ($100,000) equipment loan capital each via Discovering Outliers(DO) marketplace every year thus reducing the number of SMEs that die every year due to inadequate financing- and by extension reducing the number of jobs that could have been lost when SMEs go out of business. Performance of loans given out to SMEs via the platform will be measured via PAR (Portfolio At Risk) which is a reliable metric for indicating non-peforming loans within a particular reporting period.
Plans for implementation and sustainability
To sustain this venture, 2% of all loans raised by SMEs using DiscoveringOutliers platform will be charged as transaction fee for using the platform, while an additional 3% will be charged as ongoing monitoring and evaluation fee to be paid directly to participating incubators/co-working spaces. To ensure sustainability, the project will collaborate with business incubators and hubs to refer quality SMEs every month that will be featured in the 'Discovering Outliers'(DO) platform and made visible to impact investors. Incubators will also be responsible for providing performance monitoring for the SMEs they feature in the marketplace during the tenure of the loans. We will also operate an open procurement policy for loan recipients to avoid incidences of misappropriation of funds. When the project has gained sufficient traction, plans to launch a campaign which will convince key players in the finance industry including commercial banks and venture capitalists to commit up to 10% of their Corporate Social Responsibility (CSR) budget annually to offer this unique type of asset-backed, medium term impact investment loans to SMEs on the Discovering Outliers (DO) platform. It makes sense for commercial banks to spend CSR money on funding this type of loans for SMEs because they will be creating stronger companies which will generate more revenue in their corporate accounts that will be kept in the banks; stronger companies which will also employ more staff that can bank with participating banks- thus improving the liquidity position of participating banks.
My name is Abel Oghenero Akeni, 28, Male from Nigeria. I am a past vice president (projects implementation), Junior Chambers International, JCI, University of Benin Chapter (2008). JCI is a worldwide federation of young leaders and entrepreneurs with chapters in more than 90 countries around the world with headquarters in United States. I am also a past president of the National Society of Black Engineers, NSBE, University of Benin Chapter (2010). NSBE is an organization which helps Africans and African American engineering students and graduates succeed professionally and positively impact their local communities. NSBE has a history of more than 40 years of accomplishing its mission and its headquarters in Virginia, United States. In 2011, I was one of the engineering students sponsored by German governments DAAD under the International Association for the Exchange of Students for Technical Experience, IAESTE initiative, for a four months traineeship at ATB-Potsdam, in Brandenburg, Germany. In 2013 this project, 'Discovering Outliers' was one of the top 50 selected from among 4,000 competing projects from 60 countries in the 2013 DELL Social Innovation Competition for empowering women. Kerry Edwards, the Director for Talent Management at Dell Inc., and also a founding board member of BlackFret.Org a funding program for musicians- has worked with me as a mentor on this project in the past. In my early years from 1996 2002 I was awarded a study scholarship by the Royal-Dutch company, Shell Petroleum Development Company (SPDC) and in 2002, I finished off in the top 5% of my class in the Senior School Certificate Exams organized by Nigerian Examination Council, NECO. I am currently a final year electrical engineering student at the University of Benin, Nigeria.
Stage of Idea
conceptual stage, planning stage
Your idea has a positive impact on
poverty reduction, sustainable trade, empowerment of women, youth
Me - Abel Oghenero Akeni