The migration crisis
Maybe I am opening a can of worms here, as this is a discussion which may involve a combination of feelings and politics, which can be a dangerous mix. But I will try to view this aspect through both an investor’s glasses and with a strong desire for solving the poverty issue in Africa.
An issue which urges millions of migrants each year to pursue the dream of making a living in Europe and sending money back to their families.
And just to keep things straight: this article is not about refugees from Syria or other unpeaceful places. It is solely an idea about how to solve the sub-Sahara poverty problems and lifting the population out of extreme poverty. Poverty which forces the population to seek their fortune elsewhere but home – and that is often in Europe.
As of writing, we are in the middle of the EU Parliament election. One big issue which is being discussed is the “migration problem” from Africa and the Middle East and how to secure the borders from being overrun by migrants.
Unfortunately, the discussions are mostly focused upon border control and how to keep the migrants out of Europe. To me, it should be more focused on how to eradicate the reasons which force the migrants to seek job opportunities in Europe.
I realize that creating jobs is not only about money. The majority of the African states have limited institutional capabilities that can deliver the services needed for having a functional private and public sector. And with services, I mean education, juridical security individuals and companies, etc.
In general fighting, poverty requires direct policy interventions and I am not an expert on that issue. Building up the needed capacities is not a subject I can include in this post. Hence I will focus upon creating private owned businesses or expanding existing in order to create more jobs and thus giving the inhabitants in these countries a possibility to make an earning which can secure their families.
Creating job opportunities through crowdlending investments
My thoughts on this topic are how this development can be supported? Naturally, the EU countries can donate a huge amount of money but this will not make any long-lasting effect. And they can’t just subsidize some businesses or companies. That would be unfair competition for those companies which are not being subsidized.
Why not let the market talk and start investing in businesses in order to support the private sector in these countries? I have limited knowledge about the business environment in, say Nigeria, Ivory Coast, Ghana, and similar countries and I don’t know how to approach these markets.
But with crowdlending, an investment window has opened and through this, you have the opportunity to support small scale businesses to grow. Obviously, it’s an investment and my goal is also to earn money on my investments.
Through my Grupeer account, I found an investment opportunity in Nigeria. The loan originator is Finsputnik, and the customer is Bosak Microfinance Bank. Boask has a bank license in Nigeria and has since 2009 provided microloans to, mostly women, living close to the poverty line.
As the average loan to these women has a value of € 88 we are obviously talking small scale economic activities. There are five different loan types and most loans are aimed to buy trading goods for re-selling. Furthermore, they have finance loans, auto technician support loans, etc.
Finally, they also provide 6% savings accounts for their clients and healthcare insurance.
I invested in a short term loan – only three months. As mentioned this was my first investment in a 3rd world country so I just wanted to see how it falls out. I expect to earn money on this but I also hope it can help entrepreneurs to build and expand their businesses and maybe even creating a few extra jobs.
Maybe I am just being naïve here but I hope it can help these people to make some earnings and support their families. And according to this article from 2017, it seems there is evidence that it actually helps.
“But why don’t you just give them your money instead of earning interest?” you might want to ask. As I have mentioned in another post I am not super rich which means if I gave away an amount of money I could only do this once. With this, I can invest and re-invest when the initial loan has been repaid – and earn money at the same time.
I realize I can’t save the world but less can do.