Micro loans - Direct Investment

 

Investment shall be understood in a wider definition than those usually accepted.

In its common definition, investment is the fact of allocating money to a specific objective with the hope to get it back at a certain date.
But it can also be the fact of simply giving money or free time without expecting anything back (what is respectively called philanthropy and skills mentoring).
In this respect … the concept of investment includes also the delivery of trainings that promote a sustainable approach of life and support organisations in their efforts to develop a sustainable business and social model.

 
 
Vientiane (Laos), June 2009
 

As a whole the 2 following dimensions will be accepted for qualifying what a direct investment is :

  1. basically the financial flow that helps business activities acquire new assets and expand.
  2. any other flow of resources contributing to inspire sustainability, such as education programmes (including volunteering) focussed on human values, and professional advisory services proving a real engagement to tackle the matter of Corporate Social Responsibility – CSR.

Direct investing in business and social activities and monitoring the impact – in term of capacity building, women empowerment, poverty alleviation, preservation of land-use, etc … – definitely contributes to secure more peaceful living conditions for a substantial part of the world’s population.
 

 

Why investing as such ?

Small to medium-scale organisations often lack access to long-term capital. Lost between the medium and larger, more established businesses that have had access to credit from commercial banks or to fresh capital from investors, and the income-generating household’s activities that have been served for some decades by well-established microfinance programmes, these small- to medium-sized ventures are in a “grey zone” that has been largely overlooked.
These organisations are either too small or they run their activities in business sectors that are considered too unconventional to access investment capital. They are forced to rely on family funds, cash flow, and advance payments on products to finance operations, which constrains growth.

 
 Investing in South-East Asia
 

An industry sector still in its infancy

There is today few systematic and structured offers to promote TBL-Triple Bottom Line initiatives to investors (mainly wealthy private clients) who are looking to allocate a marginal amount of their assets to venture-capital projects with a social or environmental footprint… what is called sustainable business.
 
A growing number of investors are also interested in having a direct contact with the projects they put their monies in. They are ready to travel and go in the field. The traditional NGOs are not used to working with business-oriented projects, nor can they adapt at a large scale their organisation to such kind of (time consuming) service.
 
Services dedicated to social private-equity should appear as an alternative, driven by the emerging concept of “impact financing”. For practical reasons, investments should be mainly routed through investment funds in order to gather sufficient capital amount and diversify the risk. With delivering a bespoke service to investors it will allow them to have a direct follow-up of their investment. This concept of alike direct investment will offer opportunity for dialogue and fruitful exchanges between the parties.
This service can usually not be offered by the traditional financial partners (banks, asset management companies, …).
 
 

Geographical area for direct investments : everywhere …

Northern hemisphere

The financial and economic crisis of 2008 has dramatically jeopardised the living standard of a part of the population has materialized through a rise in unemployment but what is much more worrying is the number of employees getting their life more precarious because of job uncertainty, family crumbling and weakening of the welfare state due to growing public indebtness.
In the same time, banks are more reluctant to help starters in their business, etc.
The entrepreneurship initiatives need to be encouraged in order to create new jobs.

Southern hemisphere

Rapid growth of the global economy has accelerated the degradation of the Earth’s most important asset: the environment. Facing a strong demographic rise, the South is more vulnerable that the North.
The emerging markets are particularly suffering from this as they are facing a strong consumption growth fuelled by an expanded domestic middle-class.
In the less advanced countries – where the level of education can not be upgraded quickly – the main leverages for economic growth are still the agriculture sector, some basic industrial activities and tourism. There is a path for a sustainable growth with taking advantage of their still preserved environment , if any or with implementing strategies to prevent further environmental damages.
The “PEERS Direct Investment” concept focusses on the population of entrepreneurs who are working towards innovative market solutions or are attempting to run existing business models that help secure the living of their surrounding community.