Investors Without Borders

Investors Without Borders (IWB) offers Socially Responsible investment opportunities to Diasporan stakeholders, private and institutional social impact investors, and philanthropists through a dynamic, web-based lending platform with Social Networking tools. Investors can directly fund loan requests of developing country SMEs, with online purchases as small as $100, beginning with businesses in Ghana. Small-scale, individual investors, who can fund loans with disposable income, are predicted as the early adopters. IWB’s investor market will initially be segmented into three categories for outreach: 1) The people-to-people (P2P) lending community; 2) Socially Responsible Investors (SRI); and 3) Diaspora members (migrants living abroad).

IWB is partnering with established institutions within Ghana who already work with SMEs to develop a local reputation sharing network to mitigate the risks of loan default and fraud. The local partner network also contributes to the IWB ground presence for SME outreach, referrals, and education.

IWB supports investment in developing market SMEs through non-guaranteed loans. Non-guaranteed investments have met with success through P2P & microfinance lending sites in the US & UK. Interest rates are determined by an online auction process, with a ceiling pre-set by IWB. Lenders assess a loans’ risk/return profile and bid accordingly. A winning bid results in the lender purchasing a slice of a loan from IWB. The borrower repays a weighted average of the lowest “winning” bids. Local partner bank infrastructure supports automated disbursement and repayment. At launch, pre-export and fixed asset purchase loan options will be offered with additional products to follow.

The IWB platform will enable investors around the world to communicate directly with loan applicants in developing countries, connect and coordinate with other users, design a customized investing strategy, invest in SMEs, and track the social and monetary return on their investments. Investors can band together in groups to discuss options, pool resources, create an investing club, or create a "mini-mutual fund" or a "mini-foundation". IWB’s in-country staff, with the support of local partners, will identify and vet prospective loan applicants and their financing requests. Approved requests are made public to the entire IWB online community, empowering SMEs with an opportunity to access capital from the global financial market.

IWB's transparent, user-responsive web-platform, dynamic database, and local reputation sharing network has the power to: Inform investment decisions; Support a reputation tracking/credit building system; Compensate for the lack of a credit bureau, collateral guarantees, and brokers.

IWB will earn money through loan origination fees, set at a flat rate, and processing fees, set at a percentage of the total funded value of each loan.
The IWB model is designed to be scalable and generalizable to other regions and investment products in subsequent phases.

IWB has two distinct target markets: SME borrowers and investors. IWB’s investor market will initially be segmented into three categories for outreach: 1) The people-to-people (P2P) lending community; 2) Socially Responsible Investors (SRI); and 3) Diaspora members (migrants living abroad).

IWB will reach the investor market in the following ways:
1.Diaspora Outreach. IWB has already begun building strong relationships and generated significant interest with Ghanaian Diaspora groups such as the Volta Club.
2.Online Marketing. The SRI community is very active online using message boards, community groups, and social networking sites. IWB will promote its service in these arenas.
3.Events and Conferences. IWB will establish a presence in events covering international development, SRI, and social Web ventures.
4.Earned Media. IWB is uniquely positioned to tell a great story, and will conduct a public relations campaign to gain coverage in the press in the areas of SRI, social Web ventures, and the popular media.
5.Viral Marketing. This market is typically eager to tell others about a great service. IWB will provide ways for users to let others know about IWB, including email invites and widgets that users can paste on other Web sites, blogs, or social networking sites like Facebook, which will communicate the impact that the individual’s investments are having.

IWB will reach the SME borrower market in the following ways:
1.Local partnerships. IWB will establish relationships in each market it enters with government, business development agencies, NGOs, donor agencies, and purveyors of ancillary services, such as legal and accounting services. WB has a wide range of partnerships established in the Ghanaian market and is growing this network on an ongoing basis. These include, but are not limited to: The Ghana Investment Promotion Center, The Ministry of Trade and Industry, The Export Development Investment Fund, IntEnt (a Dutch NGO), The West African Trading Hub, Empretec Foundation, The National Board of Small Scale Industries, African Invesment Management Services, LTD, The African Development Foundation, and Technoserve Ghana.
2.Word of Mouth. Marketing in developing countries largely remains WOM. IWB will encourage this amongst SMEs by providing educational materials and incentives for SMEs who refer other SMEs that fully repay loans.
3.Viral Marketing. IWB will provide web-based, viral marketing tools for SMEs to take WOM to the web.
4. Direct Outreach. Through local partners, IWB will have a presence at events and club meetings addressing the needs of the SME sector.

To protect our first mover advantage, IWB will 1) move quickly to establish a sizable user-base, 2) establish the IWB brand as a trusted pioneer in SRI investing, 3) stay responsive to the suggestions and feedback from the IWB community, 4) build strong local relationships and knowledge through partnerships and ongoing research in collaboration with the George Washington University, and 5) quickly establish replicable in-country processes, enabling IWB to expand to additional markets in a timely fashion. IWB is already well-entrenched in Ghana with ongoing relationships with government, NGOs, and business development organizations, as well as with the Ghanaian Diaspora community.

IWB’s innovative Web-based model focuses on the “long tail” of small individual lenders, a transparent system of reputation-based credit, and an information-sharing community. IWB’s disruptive innovation is one that bypasses traditional financial institutions and connects individual lenders directly with borrowers across the globe, getting capital to where it’s most needed and able to affect positive change. SRI mutual funds such as Calvert don’t empower individual lenders with the “direct” lending option, and micro-finance portals such as Kiva and Micro-Place return little or no ROI and focus the social impact over returns. IWB provides competitive a competitive ROI along with a measurable impact. Perhaps most importantly, IWB is one of very few vehicles for SME financing outside of local markets and it is the only one that facilitates direct, individual lending to SMEs. When it comes to the future of emerging markets actually emerging, SMEs are the key.

I have a long history of creating and leading entrepreneurial and community-based initiatives. As a youth I started a number of small, profitable ventures, relentlessly pursued volunteer opportunities, and sought ways to close existing gaps in the community, including co-founding a local initiative that provided an online portal for volunteerism and resource sharing. As a professional I have led several for profit and community based initiatives with significant impact. I built strong relationship management and project management skills during my five years as a project manager in the social service industry, bringing together diverse stakeholders to achieve unified objectives within time and resource constraints. In addition, I have completed my MBA from George Washington University, gaining valuable management and business insight. Lastly, I am a strong communicator who can effectively galvanize others to affect change.

The IWB model is designed to address a pressing challenge facing developing country markets – the missing middle of finance. The missing middle consists of small to medium-sized enterprises (SMEs) that are too large for microfinance, but too small to attract the attention of large financial institutions.

IWB aims to flatten the landscape and bring emerging market SMEs in direct contact with the global marketplace. Through the IWB web platform, SMEs can secure affordable loans and expand their exposure and networks abroad.

Additionally, IWB is designed to attract and expand the community of socially and environmentally responsible investors, making double bottom line investing easy and accessible to anyone with a computer and $100 to lend. Investors and investor groups can customize and track the impact of their dollars, receive updates on SMEs they have funded, and reinvest returns, creating a “mini-foundation” that independently magnifies its impact.

SME loan applicants will be screened to ensure a transparent level of social and environmental stewardship. Using IWB tools, SMEs can market their impact to prospective investors. SMEs can predict job creation to be enabled by a loan, “tag” their request as having a rural footprint, and include a narrative and photo of how they protect the land.

IWB is committed to recruiting local talent and migrants interested in returning home to run the ground operations. Expansion to new investment regions will likely involve a franchising model that targets local ownership. IWB will encourage a spirit of innovation and active involvement amongst employees and the online community, continually revising and creating products and processes in response to the entire spectrum of stakeholders.

Expansion of the SME sector in developing economies is widely recognized as integral to the achievement of country-wide economic development and sustainable GDP growth. IWB will facilitate the growth of this important market sector, allowing for the needed expansion and stability of companies, which in turn will effect increased employment opportunities, productive output, and export-competitiveness.