Updated Mar 29, 2019

Ignite SME Diaspora Crowdfunder Platform

http://www.igniteinvestment.com/

Meseret Warner

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Ignite facilitates financing for SMEs through crowd funding platform from the African diaspora including capacity development to get the SMEs investment ready as well as grow their businesses successfully.

This integrated innovative solution has 5-prongs. 1. Appropriately identify viable and sustainable mostly women owned SMEs. 2. Capacity development to get them investment ready. 3. Upload the SMEs in the equity diaspora crowdfunding platform that is already under implementation. (for the research and market testing strategy, we launched Ignite Investment and solicited capital investments that p...
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This integrated innovative solution has 5-prongs. 1. Appropriately identify viable and sustainable mostly women owned SMEs. 2. Capacity development to get them investment ready. 3. Upload the SMEs in the equity diaspora crowdfunding platform that is already under implementation. (for the research and market testing strategy, we launched Ignite Investment and solicited capital investments that proved the concept of mobilizing the diaspora to become small amount investors with a huge number of potential investors) 4. The platform offers different options and facilitation for the diaspora/investors to identify their preferred projects/SMEs and make the final decision to invest. To make participation convenient and attractive, the funds will be managed by a reputable bank/fund managers outside of Ethiopia. 5. Finally, the innovative solution includes offering investors services to manage/oversee their investment to ensure their investment can produce returns. The most important feedback we got from talking to the diaspora is that they are concerned about overseeing their investment from afar. Therefore, offering investment management services is one way to overcome that. Our innovation addresses the SDG #8, supporting the growth of SMEs would enable them to become important players in the Ethiopian economy including multiplying employment opportunities for women and youth. The innovation would also foster a society with less inequality (this addresses SDG #10).
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Stage 5: Scaling

Ignite Investment, the early & smaller scale of the innovation showed some success. The founder worked on a project that showed success in mobilizing the Ethiopian diaspora to fund projects. Now in the process of getting bigger participants.

Focus Areas:

Digital Finance, Economic Empowerment, Diaspora and 1 MoreSEE ALL

Digital Finance, Economic Empowerment, Diaspora and Gender EquitySEE LESS

Implemented In:

Ethiopia

EthiopiaSEE LESS

1
Key Partner
1
Country Implemented In
11
Customers
3
Employees
$50,000
Funds Raised to Date

Problem

The two biggest challenges hindering the development of SMEs, especially women owned SMEs in Ethiopia are a lack of access to capital and business competency. While factors such as the lack of a capital market and excessive collateral requirements by banks all contribute to the current state of SMEs in the country, perhaps the biggest impediment is SMEs overall lack of business and managerial skills leading to a lack of access to resources.

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Solution

Ignite Investment has developed an integrated methodology for sustainably growing SMEs through capacity development and facilitating financing from the diaspora by using a crowdfunding platform,

Target Beneficiaries

Ethiopian SMEs and particularly women owned SMEs for the first scale up and expanding to other African countries in the long-term. It is estimated that Small and Medium Enterprises (SMEs) are responsible for 60 to 70 percent of all jobs created in many developed economies. Although most governments in Africa recognize this fact, their role in the economy remains very limited. One of the major obstacles to the growth of SMEs is their ability to access financing.

Mission and Vision

a) The primary objective of this project is to appropriately target and develop inclusive and sustainable SMEs, especially women owned SMEs whose economic empowerment leads to improved livelihoods in the entire household. b) A second, interrelated objective, is the direct or indirect amplification of women and youth employment opportunities by the SMEs Ignite works with as well as through the development of relevant value chains in different economic sectors.

Competitive Advantage

Both public (account more than half of all loans in Ethiopia) and private banks lend mostly to large enterprises. MFIs cater mostly to micro enterprises. This created a situation where SMEs accounts for only 7 percent of the loans in Ethiopia. In addition, these banks do not seem to be catering to the needs of SMEs because of the primarily collateral based lending system and other prohibitive requirements in their efforts to minimize risk and/or administrative costs which excludes the majority of SMEs. There are also a growing number of investment firms interested in investing in Ethiopian businesses including SMEs. Investors also have rigorous due diligence processes that the majority of SMEs could not meet. Our innovative solution uniquely addresses the challenges in cohesion with a potentially large source of capital from the diaspora crowdfunding scheme who have the natural affinity to support their home land that has been already demonstrated by the high volume of remittances.

Planned Goals and Milestones

We are in the process of implementing the equity diaspora crowdfunding platform and are planning to complete in the next 4-months. We are also working on identifying 15-20 SMEs for this year to upload to the platform to help raise capital and support their growth plan. The other most important strategy that needs to be done is marketing the project first by mobilizing the diaspora through networks, business forums and organizing events in key countries where there is a large diaspora presence.
Funding Goal500,000
Projected Cumulative Lives Impacted13,640
New Implemented CountriesGhana, Kenya
Recruit3 management, 5 ITC, 2 investment officers, 5 lower level employees and 5 interns
New FeatureA facility to address diaspora/investor requirements

The Team Behind the Innovation

The founder of this innovation & Ignite Investment Ethiopian registered company running the pilot projects of the innovation is a female who is an Ethiopian Canadian diaspora returned to Ethiopia 6-years ago. She is an entrepreneur with a background in IT, economics, & globalization; and holds an undergraduate degree in Computer Science and Mathematics as well as a master’s in Globalization and Development Economics. Our team has diverse education & experience to implement integrated approach.

EXECUTIVE TEAM INCLUDES WOMEN

Milestone

Mar 2019
New Product Or Service
Representative SME capacity development to get them investment ready
Mar 2019
Recognition ReceivedPENDING
Feb 2019
New Product Or Service
Ethiopian Investors Network mobilized
Jul 2017
In The News
ORGANIZATIONCanadian Embassy in Ethiopia
Jun 2017
Key Partnership
Implementation
ORGANIZATIONEbano Finance
Date Unknown
New Country Implemented In
Ethiopia

Supporting Materials

Global-Impact-Pathway.pdf