MITOS
Introduction and Background
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Table of Contents
Acronyms 2
1 Introduction 3
2 Background: Migration and Development 4
3 Specific considerations when linking migration and private sector development 7
4 The process of using the tools 10
5 A summary of the tools for easier selection 11
6 Bibliographic references and further reading 14
Short clarification of terms used:
u A Migrant is any person who lives temporarily or permanently outside of his or her country of origin (CoO), and has acquired some significant social ties in the country of residence or destination (CoD). Internal migration is not the focus of MITOS.
u Diaspora is the term that denotes a non-homogeneous group of people who maintains a close relationship with its country of origin.
Acronyms
BDS Business Development Services
BMZ German Federal Ministry for Economic Cooperation and Development
CoO Country of origin
CoD Country of residence or destination
CSO Civil society organization
DC Development Cooperation
F2F Face to face
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH
GO Governmental Organization
HTA Home town association
ICT Information and communication technologies
MFI Microfinance institutions
MIS Management Information Systems
MITOS Migration Tools – Options for Sustainability
MoU Memorandum of Understanding
NGO Non-governmental organisation
ODA Official development assistance
PSD Private Sector Development
SME Small and medium enterprises
TA Technical assistance
1 Introduction
u You work in a technical cooperation programme, in a chamber of commerce, in business develop-ment services, a relevant governdevelop-ment agency, or in a national SME promotion programme? u The programme is related to sustainable
economic development?
u It is located in a region where migration is relevant?
u You look for innovative and practical tools for engaging the Diaspora in private sector development?
u You are interested in migration and development?
If some of these questions are relevant to you, then MITOS might be helpful for you!
Be invited to read and feel free to use! MITOS is directed towards:
u National and international experts in DC projects u Institutions – both public and private – that
cooperate with migrants or their communities u Institutions working in the field of private sector
development (chambers, investment promotion centres etc.)
u Other donors or implementing organizations in international DC
MITOS offers a set of tools that help leveraging the potential of migration for private sector develop-ment and provide compledevelop-mentary options for programmes aiming at sustainable economic devel-opment, in particular promotion of trade, innova-tion, start-ups and investments. Moreover, it also addresses programmes in:
u Rural development u Vocational education
u Financial systems development
u Information and communication technology and economy
u Economic reform
MITOS proposes activities in the context of migra-tion and private sector development. It aims at making use of the special potentials arising from competences and resources of migrants leading to business initiatives and a contribution to achieving the Millennium Development Goals:
u Reduce poverty and hunger u Gender equality
u Global partnership
In brief, this publication describes:
what is migration about? what is specific for PSD projects?
how can the
MITOS tools be used?
overview for
tool selection the tools
2 Background: Migration and Development
u The Philippines for example received 16.3 billion USD remittances, i.e. 185 USD per capita compared to 7 USD of ODA per capita (2007) u Countries also change migration patterns. Spain
turned from a net recipient of 1 billion EUR in 1990 to a net sender of remittances of 1.3 billion EUR in 2006
u The phenomenal knowledge-based development of India was significantly driven by the influence of migrants4
u About 20% of equity of SME in urban Mexico originates from remittances
u Germany hosts 364,000 foreign entrepreneurs (2005). The rate of business creators among mi-grants in Germany is higher than that amongst native Germans
u 19% of Germany’s population in 2008 had a ‘migration background’
Migrants are free to decide how to use their in-comes and savings. Predominantly, remittances are spent for consumptive purposes, education, health, technical equipment and housing. This impacts on the domestic economy unless imported goods are being purchased, which does not contribute to domestic growth. Additional financial and human resources acquired by migrants and their families offer additional development potential if used in a productive and sustainable way. MITOS offers tools
4 Aggarwal, Alok et al.: India´s Transformation to Knowledge-based Economy – Evolving Role of the Indian Diaspora, 2004, Evalueserve, Washington D.C.
Most migrants – both internal and international – benefit in the country (or region) of destination (CoD) from better opportunities, higher incomes, better access to education and health, and im-proved prospects for their children. Surveys about migration report that most migrants are satisfied in their CoD, despite the adjustments and obstacles typically involved in moving.1. Even if they do not
plan to return they usually want to maintain their social networks in their countries of origin. Some facts and figures may illustrate the tremen-dous potential and importance of migrants for pri-vate sector development:
u Since 1970, the number of people living outside their countries of origin as international mi-grants increased from 82 to 200 million u There is gender balance amongst migrants
(male-female ratio is about 50:50 – migration is not any longer an exclusively male phenomenon) u About 1/3 of migrants live and work in
industrialised countries
u About 740 million people are internal migrants2 u Remittances from migrants to their countries of
origin accounted for 328 billion USD in 20083,
amounting to more than three times ODA
1 UNDP: Human Development Report 2009; Overcoming bar-riers: Human mobility and development. ISBN 978–0–230– 23904–3. p.2.
2 Ibid; p.1.
3 World Bank: Migration and Development Brief 10. p.1.
what is migration about? what is specific for PSD projects?
how can the
MITOS tools be used?
overview for
tool selection the tools
to support migrants and their families (or other recipients of remittances for examples) in tapping into this potential successfully.
Migration induces flows of labour, money, goods, know-how and ideas that can be visualized as fol-lows:
These flows offer challenging potentials for private sector development. Migrants who – despite being scattered all over the world (the Greek word “Di-aspora” literally means dispersal) – have never lost their ties to their CoO can be interesting partners for development cooperation. They offer specific know-how, skills and resources which can be ex-plored for leveraging private sector development, e.g.:
u Technical and professional know-how u Accumulated capital or constant savings u Market knowledge about and contacts in their
countries of origin and destination
u Social networks in the countries of origin and destination
u Organisation in Diaspora communities, representing potential partners for economic initiatives
Goods
Migrants
Host
country
Country
of origin
Money Goods Money Values Culture Know-how Ideas Values Culture Know-how Ideasu Familiarity with language and culture on both sides
u Personal contacts, facilitating risk management u Exposure to ideas that are innovative in the
countries of origin or destination
u Experience with entrepreneurship and business management
u Diaspora organisations, representing potential partners for development initiatives
Actors from the realms of development coopera-tion, politics and society are increasingly becoming aware of this setting. German Development Coop-eration has recognised the potential represented by migrants, and aims to help scaling up the positive effects of migration. At the same time, it is working to mitigate negative impacts of migration on the development of the countries of origin. The Federal Ministry for Economic Cooperation and Develop-ment (BMZ) has thus commissioned GIZ to imple-ment a project on ‘Migration and Developimple-ment’. It provides specific knowledge, information, concepts and tools with the objective to support cooperation programmes in effectively integrating migration into their result chain and activity lines. The pro-ject accumulates, generalizes and provides specific know-how about chances, approaches and good practices in leveraging migration for economic development. This could facilitate complementary initiatives in the framework of existing projects, for example:
u Support to improvement of investment climate u Small and medium enterprise strategies and
promotion
u Private sector development initiatives u Cluster and value chain strengthening
u Business development services and market for the poor (M4P) approaches
u Trade, export and technology transfer promotion u Facilitation of access to finance
With MITOS, the Migration and Development Project offers a tool box with options for interventions that are:
u Relevant for economic development impulses by accessing the potential of migration
u Easy to apply
u Relatively low-cost for the interested programme u (in most cases) easy to implement through local
structures
u Sustainable after a relatively short period of time For more information about various aspects of Migration and Development, please refer to
www.giz.de/migrationdevelopment or contact
3 Specific considerations when linking migration
and private sector development
u Special markets emerge in the context of migration, be it in the CoO, in the CoD or transnationally.
u Very often, migrants from one country or region
concentrate in one area in the CoD, forming
associations and facilitating interventions. u An above average proportion of migrants run
enterprises in the CoD. Nevertheless, the vast majority are dependant labour force.
Entrepre-neurial competence must be looked for
specifi-cally, when it represents the focus of a planned intervention.
u Some migrants prefer investing on their own, others build partnerships with their relatives or simply give them capital for investment.
Migration is not a homogeneous phenomenon. The summary given below shows special aspects, potentials, risks and typical obstacles that need to be considered when planning and implementing initiatives with migrants:
u In some countries, migrants are recruited as unskilled cheap labour. In others, high skills are even a precondition for work permits. Accord-ingly, interventions have to address the specific characteristics of the target group.
u Migrants may live under legal or illegal
condi-tions, the latter reducing mobility as well as
communication ability and formal remittance opportunities.
u Most migrants intend to stay abroad only
short-term, planning to accumulate savings for a better
life. These migrants may be looking for assis-tance to make the best and most sustainable use of their assets. Many stay abroad for a working lifetime and look for ways of achieving long-distance engagement at home.
u Accumulated capital could be allocated for a larger investment. However, in many cases, continuous savings are remitted regularly and could serve as cash flow or credit guarantee.
what is migration about? what is specific for PSD projects?
how can the
MITOS tools be used?
overview for
tool selection the tools
What are migrant-specific advantages and
phenomena? How to explore them?
Skills level related
International migrants do not primarily belong to lowest income groups because the latter are usually not in the position to finance the initial migration costs. Migrants often belong to a wealthier class, and have better qualifications.
Promotion of knowledge-based businesses or value chains.
Migrants are exposed to new culture, language, markets, technology. This could result in increased innovation and competiveness of economies in CoO.
Knowledge assets can be used beyond individual business activities for programmes of sustainable economic development at national level or within international TA projects.
Accumulated savings or permanent remittances
Purchasing power in CoO increases with remittances received from migrants. New demand may not (yet) be expected by local markets.
This offers opportunities for innovative market ideas in CoO.
Remittances are often stable over a long time and result
in (potential for) savings. Both aspects facilitate access to credit for remittances recipients in the CoO. Remittances are often used to compensate initial
migration costs. It is only after the amortisation of migration costs, that migrants start thinking about entrepreneurial activities.
Engineering companies could address special migrant needs: construction in absence of the building
contractor. Business start-up focus rather on returnees. Strong need for entrepreneurial achievement.
Returning migrants bring along savings and plan to invest in businesses. They might not know how to proceed and face high risks of losing money.
Information and training can help them to be better prepared and to secure their assets in a sustainable way.
Special migrant markets
Migrants abroad have a considerable demand for
nostalgic products. This offers specific opportunities for trade businesses in the CoD. Migrants also look for specific goods and services when
visiting their CoO. This offers specific opportunities for businesses in the CoO. Migrants are travelling regularly into their CoO. This offers specific opportunities for the tourism
business in both, the CoD and CoO. Trade between sending and receiving countries
significantly increases as a consequence of migration. Trade promotion can specifically focus on migrants and migration-related products or services (“nostalgic products”).
Family background, regional concentration and self-organization
Migration from a certain place in the CoO often concentrates in specific regions in the CoD, where migrants often found associations (formal or informal).
This facilitates the offer of tools to a group of people. It also brings up options to cooperate with migrant associations as partners for project interventions. Most business investments are realised within the
family. Interventions should address families.
Entrepreneurial competence
5–10 million migrants are entrepreneurs in the CoD. This competence can be used for mentoring or joint ventures.
Returning migrants cannot always find employment at
home. Their competence can be used to encourage self-employment and business creation in CoO.
At the same time, risks have to be taken into account when working with migrants:
Risks Possible way of risk mitigation
Information about the local specificities of migration, migrants, remittances are usually not available for projects when starting an intervention.
A baseline survey would help identify the most suitable interventions and to assess impact later on.
Information about existing programmes and available
service providers for PSD is usually also lacking. A survey would facilitate implementation, use of synergies and later sustainability. The survey might be tool-specific.
Transfer costs for remittances are high, especially for irregular migrants who do not have access to formal financial structures and often use middle men or informal transfer channels.
In some PSD programmes promotion of financial services is included and might be used to address the problem. It might be useful to involve microfinance institutions in remittances transfers.
The separation of potential investors or silent shareholders (migrants) from the business in the CoO increases risk aversion.
Business planning should include better communication and monitoring tools.
Migration might lead to feelings of personal and cultural
alienation. Interventions should address dialogue between migrant communities and encourage joint participation of migrants and people at home.
Migrants lose touch with present developments and changes in the origin country. They perpetuate their memories.
Information seminars or platforms can compensate the lack of up to date information and motivate migrants to become more involved (again).
Migrants who are entrepreneurs abroad are not
necessarily interested in running businesses in the CoO. Migrants could become involved as silent shareholders or mentors. Business planning must address this. Others might lack personal entrepreneurial skills to start
a business but dream of doing so. This increases risk of failure.
Good training provides guidance for self-assessment. Self-assessment could also be established with the help of a pre-checklist.
Exchange of contacts and ideas are usually not
structured. IT platforms could facilitate exchanges.
Migrants leave assets unused back home. PSD programmes could offer to take care of or even use these assets for income generation.
Potential investors (migrants) might lack information,
contacts and time. A specialised business service provider could fill this information gap.
4 The process of using the tools
The MITOS tools are designed in a way that facili-tates their usage. They are offered to a huge variety of DC programmes in very diverse countries. Their presentation here provides basic information for assessing their suitability in a given programme context and for selecting a (set of) tool(s).
Within a DC programme, it is advisable to plan and implement a migration and economic development initiative with suitable partner organisations such as: chambers, investment agencies, Business Devel-opment Service (BDS) providers. These institutions might need orientation about migrant-specific ap-proaches or the usage of tools. According to a pre-paratory analysis of the migration phenomena in
what is migration about? what is specific for PSD projects?
how can the MITOS tools be used?
overview for
tool selection the tools
the project area, advantages as well as risks must be considered in a promotion scheme.
The tool-kit also addresses national BDS providers and SME promotion initiatives and is supposed to complete their service offer by addressing new mi-grants or great numbers of returnees.
Contact and dialogue with the GIZ Sector Project ‘Migration and Development’ might be required and the tool(s) will need adaptation, sometimes external expertise. The Sector Project Migration and Development welcomes your enquiries and is ready to advise you in using the tools. Process
steps are:
Clarification u is migration relevant for your programme context (country relevance, policy focus, programme objectives)?
Orientation u use tool overview for identifying suitable interventions
Pre-selection uassess description of identified tools for selection
Funding u check sufficient resources in your budget
Dialogue ucontact Migration and Development and discuss your plans
Planning u prepare your own implementation plan
Expertise u assign external expertise in cases where tools or you require it
Realisation u implement the tool
Reporting u Migration and Development would highly appreciate your feedback to disseminate experiences
5 A summary of the tools for easier selection
This overview of the MITOS toolbox shall facilitate the choice of the most suitable tools by offering a range of criteria:
uType: (B) Business creation, (I) Investment services, (M) Matching function (Diaspora –CoO), (T) Trade, (W) Web-based tools, (X) Innovation and technology transfer.
uCosts: vary from $ (very low) to $$$$$ (very high).
Costs depend on factors like the number of applications wanted or costs for services in a country. Costs for international experts are not included.
uComplexity: varies from M (easy to apply) to MMMMM (very demanding)
uExpertise: refers to international experts required to transfer knowledge in tool utilization or capacity development. It ranges from ( ) (empty, none required), over ¶(short but recommended) to ¶¶¶¶¶ (several weeks and absolutely necessary). The costs for expertise are not included under ‘costs’.
uPlace: Some projects may find it difficult to support activities outside their defined regions. MITOS facilitates selection by applying the following categories:
Global: the tool can be used independently from user residence. CoO: the tool addresses people in CoO and will be applied there. CoD: the tool addresses migrants in their CoD.
Both: the tool can be applied both in CoO or CoD. what is migration about? what is specific for PSD projects?
how can the
MITOS tools be used?
overview for
tool selection the tools
All tools are also made available as single files, which can be downloaded, from the GIZ Migration and Development website: www.giz.de/migra-tiondevelopment
The table under chapter 5 shows all tools and pro-vides links to directly access the Internet.
The GIZ Sector Project Migration and Development and MITOS appreciate any kind of
u comments about this introduction and orientation paper
u proposal of new tools
u feedback about application experiences Based on feedback from programmes applying them, the tools will be continuously updated.
MITOS tools overview
Tool Description Output Type Costs Complexity Expertise Place
01 Migrant Opportunities
Website Website specifically made to publish business opportunities for migrants and to discuss ideas, problems and solutions. People can choose suitable ideas and use them for business planning and management.
website B/I/M/W/X $$$$ MM ¶ global
02 KIVA for migrants Interactive web-based platform, offering potential or existing entrepreneurs in the CoO a possibility to post their projects (start-up or other projects) and therewith related needs (financial and know-how) and to link them with members of the Diaspora who are interested in supporting their CoO.
web-based platform for a grant
system and knowledge-transfer B/I/M/W $$$ MMMMM ¶¶ global
03 Migrant Assets
Custodian Service Some migrants leave property behind when they leave (land, assets, money). They can commission a custodian (organization) to maintain the assets in the town of origin and use them for CoO business activities.
manual of procedures for lawyers I/M $$$$$ MMM ¶ CoO
04 Migrant Innovation
Treasury The treasury encourages young people (both in CoO and the Diaspora) to develop innovative, migration-related product or service ideas and get a prototype realised. A fund is raised to enable prototype development, including migrants as funders. Likewise, migrant entrepreneurs can be rewarded and their example disseminated.
challenge fund B/I/X $$$$$ MM ¶ both
05 Cash Flow
Management Improve productive utilization of remittances by training recipients to better use and monitor cash, prepare for risk, and accumulate funds. training course B/I/M $$ MM ¶¶¶ CoO
06 Idea Generation for Migrant Investment Opportunities
Training and practical application of idea generation for migrant entrepreneurs, related to opportunities and risks of migration background. Analysis and selection of most appropriate ideas for further business plan development (next tool).
workshop B/I/M $ M ¶¶ CoO
07 Business Creation Using specific advantages and taking into account problems arising from a migration background for business plan development. Also includes: long distance communication. Builds on tools 5 and 6.
training course B/M $$ MMM ¶¶¶¶ CoO
08 Online Business Plan Coached online service and programme, enabling interested migrants or families in CoO to develop business plans. Enables tripartite communication coach-migrant-CoO. Involves training elements. For advanced target group.
software B/I/M/W $$$ MM ¶¶ global
09 Import-Export
Services Training Facilitates import and export activities of migrants’ families and local business partners between CoO and CoD, by encouraging and qualifying small to medium trade service providers.
training course M/T $$ MM ¶¶ CoO
10 Trade promotion
agency manual Raises awareness among staff of trade promotion organizations and programmes about potentials and obstacles of migrants to stimulate new markets. Facilitates to deliver better advice.
manual M/T $ M ¶ CoO
11 One Stop Shop Migrant
Investment Service Strengthening local BDS in providing investment services to migrants who want to invest in CoO. training course B/I/M $$ MMMM ¶¶¶ CoO
12 Migrant Market Place A place for potential partners to get to know each other, also known as business wheel. Detailed and structured information on why investments make sense in their CoO. The information kit will be delivered via info workshops (face-to-face, selective dissemination via YouTube) in the CoD.
workshop B/I/M/T/X $$$$ MMM ¶ CoO
13 Mentoring Competence-building among migrants to use their specific knowledge and support business activities in their CoO as mentors (“Business Angels”). Includes communication and mentoring at long distance. Refers specifically to migrants who have retired but want to share their expertise.
training course and database B/I/M/T/
W/X $$$$ MMMM ¶¶¶¶ both
14 Partnerpreneurship
development Training for joint ventures between migrants and CoO partners, covering business contract, role division, controlling and reporting, communication. training course I/M/T $$$$$ MMMM ¶¶¶¶ both
15 Virtual World for
Migrants Access and use Virtual World platform for Migrants – with emphasis on information sharing between CoD officials, DC agencies and migrants, and support and collaboration between migrants.
web space, training, online service M/T/W/X $$$$$ MMMM ¶¶¶¶ global
16 MyMobileMag Using mobile phones as communication tool for providing migrants with crucial
information via a mobile magazine platform. communication system B/I/M/T/X $$ MM ¶ both
MITOS tools overview
Tool Description Output Type Costs Complexity Expertise Place
01 Migrant Opportunities
Website Website specifically made to publish business opportunities for migrants and to discuss ideas, problems and solutions. People can choose suitable ideas and use them for business planning and management.
website B/I/M/W/X $$$$ MM ¶ global
02 KIVA for migrants Interactive web-based platform, offering potential or existing entrepreneurs in the CoO a possibility to post their projects (start-up or other projects) and therewith related needs (financial and know-how) and to link them with members of the Diaspora who are interested in supporting their CoO.
web-based platform for a grant
system and knowledge-transfer B/I/M/W $$$ MMMMM ¶¶ global
03 Migrant Assets
Custodian Service Some migrants leave property behind when they leave (land, assets, money). They can commission a custodian (organization) to maintain the assets in the town of origin and use them for CoO business activities.
manual of procedures for lawyers I/M $$$$$ MMM ¶ CoO
04 Migrant Innovation
Treasury The treasury encourages young people (both in CoO and the Diaspora) to develop innovative, migration-related product or service ideas and get a prototype realised. A fund is raised to enable prototype development, including migrants as funders. Likewise, migrant entrepreneurs can be rewarded and their example disseminated.
challenge fund B/I/X $$$$$ MM ¶ both
05 Cash Flow
Management Improve productive utilization of remittances by training recipients to better use and monitor cash, prepare for risk, and accumulate funds. training course B/I/M $$ MM ¶¶¶ CoO
06 Idea Generation for Migrant Investment Opportunities
Training and practical application of idea generation for migrant entrepreneurs, related to opportunities and risks of migration background. Analysis and selection of most appropriate ideas for further business plan development (next tool).
workshop B/I/M $ M ¶¶ CoO
07 Business Creation Using specific advantages and taking into account problems arising from a migration background for business plan development. Also includes: long distance communication. Builds on tools 5 and 6.
training course B/M $$ MMM ¶¶¶¶ CoO
08 Online Business Plan Coached online service and programme, enabling interested migrants or families in CoO to develop business plans. Enables tripartite communication coach-migrant-CoO. Involves training elements. For advanced target group.
software B/I/M/W $$$ MM ¶¶ global
09 Import-Export
Services Training Facilitates import and export activities of migrants’ families and local business partners between CoO and CoD, by encouraging and qualifying small to medium trade service providers.
training course M/T $$ MM ¶¶ CoO
10 Trade promotion
agency manual Raises awareness among staff of trade promotion organizations and programmes about potentials and obstacles of migrants to stimulate new markets. Facilitates to deliver better advice.
manual M/T $ M ¶ CoO
11 One Stop Shop Migrant
Investment Service Strengthening local BDS in providing investment services to migrants who want to invest in CoO. training course B/I/M $$ MMMM ¶¶¶ CoO
12 Migrant Market Place A place for potential partners to get to know each other, also known as business wheel. Detailed and structured information on why investments make sense in their CoO. The information kit will be delivered via info workshops (face-to-face, selective dissemination via YouTube) in the CoD.
workshop B/I/M/T/X $$$$ MMM ¶ CoO
13 Mentoring Competence-building among migrants to use their specific knowledge and support business activities in their CoO as mentors (“Business Angels”). Includes communication and mentoring at long distance. Refers specifically to migrants who have retired but want to share their expertise.
training course and database B/I/M/T/
W/X $$$$ MMMM ¶¶¶¶ both
14 Partnerpreneurship
development Training for joint ventures between migrants and CoO partners, covering business contract, role division, controlling and reporting, communication. training course I/M/T $$$$$ MMMM ¶¶¶¶ both
15 Virtual World for
Migrants Access and use Virtual World platform for Migrants – with emphasis on information sharing between CoD officials, DC agencies and migrants, and support and collaboration between migrants.
web space, training, online service M/T/W/X $$$$$ MMMM ¶¶¶¶ global
16 MyMobileMag Using mobile phones as communication tool for providing migrants with crucial
information via a mobile magazine platform. communication system B/I/M/T/X $$ MM ¶ both
6 Bibliographic references and further reading
Instraw (2009): Global perspectives on the social
organization of care in times of crisis: Assessing the situation. Santo Domingo.
IOM: IOM and Remittances – Definition, Scale and
Importance of Remittances. Online: http://publications.iom.int/ bookstore/free/iom_remittance_EN.pdf.
Koslowski, Rey; Martin, Philip L.; Russell, Sharon Stanton (2008): International Migration
Review. United Kingdom.
Online: www.wiley.com/bw/journal. asp?ref=0197–9183.
Kutneszov, Yevgeny (2006): Diaspora and the
International Migration of Skills. World Bank Institutee. Washington D.C.
Lowell, Lindsay B.; Gerova, Stefka G. (2004):
Diasporas and economic development: State of knowledge. Georgetown Institute. Georgetown. what is migration about? what is specific for PSD projects?
how can the
MITOS tools be used?
overview for
tool selection the tools
Aggarwal, Alok et al. (2004): India´s Transformation
to Knowledge-based Economy – Evolving Role the Indian Diaspora. Washington D.C. Online: http://info.worldbank.org/etools/ docs/library/152386/abhishek.pdf.
Cohen, Robin (1996–2000): The International
Library of Studies on Migration. Economic and Social Research Council. No.1–10. Swindon.
EC-UN: Migration for Development – Handbook.
Brussels.
Online: http://w3.migration4development. org/handbook/en/.
GIZ (2009): Cooperating with Diaspora
Communities – Guidelines for Practice. Frankfurt.
GIZ (2009): The Ethiopian Diaspora in Germany.
Frankfurt.
Lucas, Robert E.B. (2005): International Migration
Regimes and Economic Development , Bos-ton University, BosBos-ton.
Online: http://www.un.org/esa/population/ meetings/thirdcoord2004/P22_AnnexIII.pdf.
OECD, IOM & ILO (2006): Handbook on
Establishing Effective Labour Migration Polices in Countries of Origin and Destination, Vienna/Geneva
Özden, Ç.; M. Schiff (eds.) (2006): International
Migration, Remittances and the Brain Drain. World Bank Institutee. Washington D:C. Online: http://www.ime.gob.mx/
investigaciones/2006/estudios/migracion/ inter_migration_remittances.pdf.
Pedro J. Oiarzabal and Andoni Alonso (2010):
Diasporas in the New Media Age: Identity, Politics, and Community”; University of Nevada Press
SAMP (2006): Migration and Development in
Africa: an Overview. Cape Town.
Skeldon, R. (2008): International migration as a
tool in development policy: a passing phase? Population and Development Review. No. 34(1). p.1–18. Bangkok.
The World Bank Institute (2009): Development
Indicators 2009. Washington D.C.
The World Bank Institute (2009): Migration and
Development Brief: Outlook for Remittance Flows 2009–2011. Washington D.C.
Online: http://siteresources. worldbank.org/INTPROSPECTS/ Resources/334934–1110315015165/ Migration&DevelopmentBrief10.pdf.
UNDP (2009): Human Development Report 2009 –
Overcoming barriers: Human mobility and development. New York.
For further information, please refer to:
“Migration and Development”, GIZ
www.giz.de/migrationdevelopment
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MITOS
Tool 1
Migrant Opportunities Website
MITOS
Tool 1
Migrant Opportunities Website
Exchange ideas – start and grow your business!
4 Problems and potentials of migrants
addressed by this tool:
Migrants who succeeded in their respective CoD might one day yearn to invest (or contribute) in income-generating ideas for their relatives and other possible business partners in their respective CoO. However, when the right moment to invest comes, migrants often rely on hearsays, rumours, out-dated and often inadequate investment infor-mation. There is a need to verify the opportunities. To do so, migrants rely on inexpensive (and often unreliable! e.g. word of mouth, old embassy news-papers and trade information, etc.) and expensive (e.g. investment consultants, travel to the place and check with key informants, etc.) means. Lack of reli-able and up-to-date business information is one of the barriers that restrict the volume and speed of remittance flows from consumptive to business purposes.
The Internet is increasingly being used by migrants (or their children) to communicate and obtain information from their CoO. Recently, social net-working tools like Facebook, MySpace, Twitter and others provide platforms where individuals or groups can communicate, discuss, and even co-create enterprises. This is yet another tool that uses the power and influence of social networking.
5 Description:
This tool offers an online investment marketplace for migrants. A migrant can visit the site and see a list of possible investment opportunities suggested by institutions, groups or individuals back in the CoO. The list will contain a brief description and suggest areas where they can be established. In the beginning, seed opportunities will be collected
1 Tool:
This is a web-based migrant membership tool that allows migrants to identify business investment opportunities in their respective CoO. It responds to the migrants’ need for general but more up to date information on business opportunities. It also allows for ideas and opportunities of existing busi-nesses online, both in the CoO and CoD.
2 Objectives:
This tool will enable migrants to: u Gain relevant and timely investment
information that their counterparts in their respective CoO can use for income generation u Share what they need in the CoD
u For remittance recipients to suggest and rank possible investment areas for income generation u For existing enterprises to discuss potential and
problems, and to find solutions by online dia-logue
3 Target groups:
u CoD: Migrants with investible funds and needs for origin country products or services for both emerging and existing enterprises
u CoO: Migrants’ relatives and social networks (e.g., friends, former partners, school mates, etc.) that are entrepreneurially inclined. Other target groups are institutions and business support groups. It is highly probable that this tool could likewise inspire young would-be entrepreneurs and investors.
from existing lists, records or opportunity scan-ning workshops and conference proceedings. When the site membership enlarges, more opportunities will be solicited from site members and visitors. Migrants who become familiar with the site can likewise post needs for special products or services needed from their respective CoO.
In addition to suggesting opportunities, site mem-bers may also rank the published opportunities based on criteria such as: market potentials, start-up time, employment, profitability and others. The monthly top three-ranked opportunities will be featured in the site together with more detailed information.
The site will likewise provide a list of resources (reading materials, other background information and internet links), persons and institutions that may be able to help in developing the ideas. The tool could consist of the following elements: The Opportunities Blog will provide a continu-ing list of business opportunities that could be of interest to the site users. Each opportunity could be presented in the following formats: (a) title, (b) brief description, (c) start-up investment required, (d) location possibilities, and (e) comments. The oppor-tunities will be presented as from CoO (completed by migrant counterparts) and from CoD (completed by migrants). An example of an entry can be found in Annex 1.
Investment News and Events will consist
informa-tion about trainings, livelihood investment pro-motion, trade and exhibition fairs, conferences of interest to investors and migrants.
Site Services will show the additional services such
as: ranking of opportunities, comments, chat, and migrant investment forum.
Links will list the relevant links to institutional
sites of relevance to the origin country, migrants, investments, business news, etc.
About Us which describes the intent and
back-ground of the sponsoring institutions.
Activities:
This tool envisions the following activities:
Developing the site. This would include: (a) laying
out the site architecture; (b) choice of platform (see Annex 2 for a list); (c) customization of opportuni-ties page, forum and chat; and (d) site testing. A lo-cal website developer may be hired for this activity (duration: 3 days).
Listing the initial opportunities. This activity
would collect business and livelihood opportunities (e.g., food processing, handicrafts, art and fashion wares, provision stores, services like barber shops, specialized clinics, parking spaces, etc.) in the origin country that may be started on very small scale op-erations. This initial list is merely the seeds that can grow and stimulate the site members (and visitors) to suggest additional opportunities once the site is mounted. The initial list can come from govern-ment institutions and from key informants in the local economic development (LED) agencies and projects. Likewise they can come from LED initia-tives and Public-Private Partnership Dialogues. Staff of counterpart institutions may be able to do this even during office time (duration: 10 days).
Training for content makers. This is an optional
course for the staff of the counterpart institutions and others who can share additional opportuni-ties and operate site maintenance. The course will provide how to: (a) use web 2.0 and social networks; (b) use and interact with the website; (c) update, edit and add content; (d) use the blog, forum and chat features; and (e) perform simple site maintenance tasks. Depending on the site language, a local or
foreign content making specialist may be hired to do the training (duration: 2 days).
Administration and content updating. The
coun-terpart institution’s web staff will update the con-tent weekly, including: (a) addition of new business opportunities; (b) investment news; (c) forum sum-mary; and (d) management oversight. In addition, other staff with the participating institutions may likewise be invited and become site coordinators. (Duration: 2 Days per month).
Site promotion. The site will be promoted in the
relevant governmental and non-governmental institutions, chambers of commerce, trade and ex-hibition organisations, fair trade promoters, banks and microfinance and remittance handling institu-tions, foreign workers and migrant associainstitu-tions, and other professional organizations via posters and radio. The marketing shall expand the mem-bership base by encouraging members to pass the site information to their personal networks and business groups. The site promotion may be im-plemented by the counterpart institution itself or a hired events management team (duration: 25 days).
6 Prerequisites:
Counterpart institution. Co-sponsorship or
part-nership of a government entity can add credibility to the site. In turn, the counterpart institution can adopt a new way of using social networking for service provision and information dissemination. Ideally, the counterpart for this tool should have an underutilized internet server with one staff able to use social networks on the institution’s website. Some possible candidates are: (a) the Ministry of Local Government; (b) Ministry of Trade and Indus-try; and (c) Private Business Serving Organizations (e.g., chambers of commerce, trade and exhibitions organizations, fair trade promoters, foreign workers and migrant associations, banks and money trans-fer operators as well as other professional associa-tions).
7 Particularities and/or difficulties:
Particularities. The migrant opportunities site isa low effort project with potentially high impact compared to the operating and maintenance costs. Major investment is limited to the membership campaign in the CoO. This is particularly interest-ing for the young would-be CoO entrepreneurs in search for business opportunities and potential co-investors (as will be discussed in succeeding tools). Advert solicitation and sponsorship may be pursued later to ensure long term sustainability. If desired, some (non-financial) incentives may be offered as prizes to the highest number of oppor-tunities suggested or the best-ranked investment ideas.
8 Costs:
Costs can vary significantly from country to coun-try. Rough estimates are shown below:
Items Days US$ Cost/
Unit Total Cost
Developing the site 3 250 750
Listing the initial
opportunities 10 200 2,000
Training for content
makers 2 800 1,600 Administration and content updating 24 200 4,800 Site promotion 25 300 7,500 Prizes 150 150 Total 16,800
9 Dissemination:
The internet has many sites that share general business opportunities. This site will have three distinct advantages: (a) it is for and by migrants and their counterparts; (b) can be directed to a region, province or town specific migrant groups originate from; and (c) more relevant and up-to-date busi-ness information. Note that to achieve a notable marketing effect, the site should collect at least 100
members who can use or feed the site with invest-ment opportunities and rank them.
10 Links to other
MITOS
tools:
MITOS Tool 02: Kiva for Migrants
MITOS Tool 03: Migrant Asset Custodian Services (MACS)
MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 10: Trade Promotion Agency Manual MITOS Tool 12: Migrant Market Place
MITOS Tool 15: Virtual World for Migrants – 3D Collaboration
Prepared by:
Dr. Eduardo Canela, CEFE International
[email protected] www.cefe.net
Annex 1: Example for an Opportunity Entry
US. “Marketing is crucial in Utopia. You will find many people who do beautiful things, but it does not sell. This is because they don’t know how to sell them”.
Investment Parameters: Utopian migrants can or-der 1,200 pieces for only 2500 EUR plus shipping costs. They can also help us employ one more arti-san by buying the equipment needed, a donation of 120 EUR would suffice.
Contact: Mr. Anyname Anonimous
Block 32, Lot 58 Anywhere Street, Tukuyu, Republic of Utopia
Posted by:
Investment ranking: Wood handicrafts from the small town of Tukuyu
in Utopia seeking migrant investors and importers. These are beautiful items that could adorn living spaces and inspire both your families and visitors abroad. Tukuyu is a small town with a few wood-crafters that have changed the lives from rural, un-employed artisans.
The handicrafts are very popular as corporate gift items. Their prices go up to 20 EUR a piece depend-ing on the design. Tukuyu is now stressdepend-ing heavily on the marketing of their products particularly to Utopians living in Europe and the US. The items will bring your origin country to your present country. The group of artisans is assisted by the INGO Project and has recently bagged an order of 1,200 wood decorative handcrafted pieces from the
Annex 2: Alternative Social Networking Platforms
LinkedIn (http://www.linkedin.com/) General but mainly business
LiveJournal (http://www.livejournal.com/) Blogging
Livemocha (http://www.livemocha.com/) Dynamic online language learning – online courses in 22 languages – world’s largest community of native language speakers.
Multiply (http://multiply.com/) “Real world” relationships. Popular in Asia,
My Opera Community
(http://my.opera.com/community/)
MySpace (http://www.myspace.com/)
Netlog (http://www.netlog.com) General. Popular in Europe, Turkey, the Arab World and Canada‘s Québec province.
NGO Post (http://ngopost.org/) Non-Profit news sharing and networking, mainly in India
Blogger (http://www.blogger.com) Very popular.
Cloob (http://www.cloob.com/) Popular in
Iran
Facebook (www.facebook.com) Very popular, but not (fully) accessible everywhere
Flickr (http://flickr.com) Photo sharing, commenting, photography related networking, worldwide
Fotolog (http://www.fotolog.com/) Popular in South America and Spain
hi5 (http://www.hi5.com/) Popular in India, Portugal, Mongolia, Thailand, Romania, Jamaica, Central Africa and Latin America
italki.com (http://www.italki.com/) Language learning social network. 100+ languages
kaioo (http://www.kaioo.com) Non-profit
Kiwibox (http://www.kiwibox.com/) Micro-finance access
Ning (http://www.ning.com) Users create their own social websites and social networks
Odnoklassniki (http://odnoklassniki.ru/) Popular in Russia and Soviet republics,
Orkut (http://www.orkut.com/) Google login. Popular in Brazil and India.
PartnerUp (http://www.partnerup.com/) Networking site for entrepreneurs
Passportstamp (http://www.passportstamp.com/) Travel
Picassa (http://www.picassa.com) a photo blogging site
Plaxo (http://www.plaxo.com/) Aggregator
Plurk (http://www.plurk.com/) Micro-blogging, RSS, updates
Qapacity (http://qapacity.com/) A business-oriented networking and directory site
SocialGO (http://www.socialgo.com/) A social network builder
Sonico.com (http://www.sonico.com/) Popular in Latin America, Spanish and Portuguese
Tumblr (http://www.tumblr.com/) General. Micro-blogging, RSS
Twitter (http://twitter.com/) Micro-blogging, RSS, updates
Vox (http://www.vox.com/) Blogging
WAYN (http://www.wayn.com/) Travel and lifestyle
Windows Live Spaces (http://spaces.live.com)
Word Press (http://www.wordpress.com)
Xanga (http://www.xanga.com/) Blogs and “metro” areas
XING (https://www.xing.com/) Business (primarily Europe (Germany, Austria, Switzerland) and China)
YouTube (http://www.youtube.com)
Published by
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH Sector Project ‘Migration and Development’ Registered offices
Bonn and Eschborn, Germany
Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg 1–5 53113 Bonn/Germany 65760 Eschborn/Germany Phone: +49 228 44 60-0 Phone: +49 61 96 79-0 Fax: +49 228 44 60-1766 Fax: +49 61 96 79-1115 [email protected] www.giz.de/migrationdevelopment Authors
CEFE International and the global network of CEFE trainers www.cefe.net
Design
andreas korn visuelle kommunikation, Bad Homburg
Printed by
Aksoy Print & Projektmanagement, Eppelheim Printed on FSC-certified paper
Photographs
Front cover: © GIZ/Markus Kirchgessner As at July 2012
GIZ is responsible for the content of this publication. On behalf of
Federal Ministry for Economic Cooperation and Development,
Division Federal government/states/local authorities; migration and employment; returning experts; export credit and investment guarantees
Addresses of the BMZ offices
BMZ Bonn BMZ Berlin Dahlmannstraße 4 Stresemannstraße 94 53113 Bonn/Germany 10963 Berlin/Germany Phone: +49 228 99 535-0 Phone: +49 30 18 535-0 Fax: +49 228 99 535-3500 Fax: +49 30 18 535-2501 [email protected] www.bmz.de
MITOS
Tool 2
Kiva for Migrants
MITOS
Tool 2
Kiva for Migrants
Find sponsors for shared funding of your business idea
In-between your project/institution and the SMEs there are secondary targets:
(a) intermediary partners (e.g., microfinance institu-tions (MFI), remittance centres, money transfer op-erators like Western Union, MoneyGram and other financial institutions); and (b) referral partners (e.g., large banks, chambers of commerce, vocational and technical training institutes, local government units, local NGOs, etc.). Other field partners are po-tential beneficiaries as well.
4 Problems and potentials of migrants
addressed by this tool:
u Pooling of smaller amounts of remittances into substantial funding for private sector investment u Bridging the gap between migrants willing to
finance and people in CoO requiring funds u Offering lending or investment opportunities to
migrants who do not want to become directly involved as entrepreneurs
5 Description:
5 1 Background:
www.kiva.org is a web 2.0-based social network, empowering people to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending. It allows po-tential borrowers to directly access credit lenders. Loans are relatively small and the borrowers are reached via microfinance institutes (MFIs) acting as Kiva’s field partners. Every week, Kiva generates 3,000 lenders and serves 4,000 borrowers amount-ing to US$ 1.3 million with respectable repayment rates ranging from 98 to 99 percent. It serves one
1 Tool:
Accumulation and provision of financial resources from migrants for the funding of start-ups or for business growth.
2 Objectives:
This tool will:
u Facilitate the establishment of a localized and migrant-focused kiva5-like web platform to
increase the SME’s access to cheap refinancing sources in the countries of origin
u Allow migrants to provide credit to SMEs of their choice
u Initiate an effective learning partnership with the project’s intermediary and referral partners u Empower the partners to learn more about the SME credit behaviour (demand side) and ways to tap migrants as funding source (supply side) u Allow partners to expand their use of internet
technologies in loan disbursements and admin-istration for SMEs
3 Target groups:
CoD: Migrants disposing of investible funds and interest in the development of the origin country. They can either be: individuals, relatives, formal or informal migrant associations and federations. CoO: Ultimate target groups: existing SMEs, liveli-hood producers, cooperatives, social enterprises who are interested in growing their respective enterprises.
5 Virtual network to provide and/or receive small loans; refer to
www.kiva.org (kiva originally refers to a meeting- and ceremo-nies room of so-called pueblo cultures (Native Americans from North America).
loan every 14 seconds. A summary on how Kiva operates can be found in Annex 1. All lenders know how and when they can get their money back, see “A Fistful of Dollar: The Story of a Kiva Loan video” (http://vimeo.com/2769845). You get a sense of Kiva in motion by visiting its site6 (http://www.kiva.org)
and check the most recent achievement statistics almost instantly.
This tool is a Kiva mini version. It uses the same
business model as Kiva but will particularly aim for migrants from a specific CoO (may also be for a town, province, district, etc. which is covered by your project) as lenders. It may not have the same out-reach but it will likewise be as sustainable. Like Kiva, this tool will allow existing SME clients in the CoO to describe their loan demand for their future expan-sion and growth projects (or in some cases, search for potential business partners) in the web to attract the attention of migrant lenders, investors, etc.
Lack of access to traditional financing sources re-mains one of the most pressing concerns of many SME, especially those at the bottom of the pyramid. Yet in the future, the demand for credit from this sector is expected to grow since: (a) the under-served credit market is expanding in most develop-ing countries; (b) increasdevelop-ing global pressure to cur-tail if not eradicate poverty, and (c) rising interest in self-employment and entrepreneurship.
On the supply side, portions of the migrant remit-tances can be channelled to productive instead of purely consumptive use if properly tapped. Mi-grants who succeeded in their respective countries of residence will one day in their life like to invest (or contribute) in income-generating ideas for their relatives or others (including searching for possible business partners) in their respective countries of origin.
6 Other Kiva like models with differing business models and targets likewise exist. These are:
Acumen fund (http://blog.acumenfund.org/), Global Giving (http://www.globalgiving.org/), and Zopa (http://uk.zopa.com/ZopaWeb/).
With this tool, potential SME borrowers can: (a) describe their needs for loans even in their own language, (b) submit to a participating intermediary partner who posts it on the internet site, (c) wait for migrant lenders (as in Kiva) until the money needed is raised, (d) the field partners monitor the loan ap-plications and collect repayments until the loan is completely repaid.
There are two ways to use this tool in your project/ institution. First (and this is the easiest and least time-demanding way), affiliate with Kiva. You can do this if you have an existing MFI component (say, with 1,000 or so borrowers) that is willing to be certified as a Kiva Field Partner. More information about Kiva Field Partnerships is available under http://www.kiva.org/partners/info. Second (and this is the focus of this description), build a mini-Kiva for migrants.
5 2 The tool:
The web-based tool consists of the following elements:
1. Introductory Page. This will include descriptions of: site name, site owners, intentions, how the site operates, donation and payment modes (e.g., credit cards, Paypal (www.paypal.com), Money-bookers (http://www.moneyMoney-bookers.com/app/), contact details, sponsors list, intermediary and referral partners, real time stream of lenders and loans provided, etc.
2. Lenders Page. presents the lender’s registration, lender’s information (e.g., location, career, site ex-perience, etc.), rules of lending, etc., lenders’ most frequently asked questions, facility for accepting donations and payments, featured lenders, etc. 3. Client Page. This will show the borrowers (e.g., name, family, business particulars, and present concerns), how much is needed and where the money will be used, featured borrowers, clients’ most frequently asked questions, and a real time
stream of how much of the needed amount has been raised by the site.
4. Partners Page. This will present the list of inter-mediary and referral partners as well as the field partners who are collaborating with the project site.
Activities
Partner development. To use this tool, the Project
will need two types of partners: (a) intermediary and (b) referral. It is possible to use your project/ institution counterparts who qualify and are in-terested in the activity. Other relevant institutions may also be invited. They can form a fund manage-ment committee. Among others, this activity will include discussions on: (a) initial portfolio size (see next paragraph), (b) fund management and supervi-sion, (c) transaction processing and costing, (d) risk management and (e) a facility to accept donations and payments (duration: 10 days).
Raising the initial portfolio. The initial portfolio
does not necessarily need to be large. After all, the loanable funds will be contributed by the migrants. There are many ways to raise the initial portfolio. The easiest way is to use your project’s MFI com-ponent (if available, otherwise, a small matching grant, e.g. for every $ 1 contributed by your project, partners will raise US$ 3). The raising of the initial portfolio will be covered by a MoU signed between the partners and the project (duration: 20 days).
Developing the site. The site does not necessarily
need to be fancy at the beginning. In fact, it should grow in functionality with the size of the transac-tions. A qualified (familiar with web 2.0 technolo-gies) website developer from one of the partners can prepare the platform. This will include: (a) design of site layout; (b) choice of platform (see mi-grant site tool annex for choices); (c) page customi-zation; and (d) site testing (duration: 3 days).
Seeding: Populating the site. Prior to official
launching, the site needs some 20 to 30 client pro-files. They can be sourced from the intermediary and referral partners (plus the field partners if avail-able). It is a good practice to have a soft launching before the official one (duration: 4 days).
Site promotion. The site will be promoted on the
internet and in the field. Use other tools in the manual to promote the site on the internet. In the field, your project/institution can sponsor presen-tations, radio interviews, posters addressed to rel-evant government, non-government, chamber of commerce, trade and exhibitions, banks and MFIs, remittance handling institutions, foreign workers and migrant associations, and other professional organizations. Site promotion may be implemented by the counterpart institution or a hired events management team (duration: 10 days).
Administration and content updating. A website
staff assigned by the partners will maintain and up-date the content weekly (duration: 2 days monthly).
6 Prerequisites:
Partner institution. The selection of the partners
(especially for the intermediary) is a critical success factor. Their sense of ownership and commitment to the learning process should be developed right from the start. They should see it as a potential core service that they can offer to their migrant clients both at origin and in the residence countries. Prospective partners should have a relatively large portfolio of migrant remittances, a functioning management information system (MIS) and data-bases as well as underutilized internet servers.
7 Particularities and/or difficulties:
Impacts. This tool offers significantly highim-pact potentials for all stakeholders. SME will gain insights in presenting their projects to the global market for funds and goods. The same applies for the intermediary partners, irrespective of size. They
will realize the value of the internet for their lend-ing transactions. This will trigger a transformation process in their respective operations. The impacts can still be enhanced when this tool is linked with other financial services such as savings, insurance and loan products. Inclusive financial systems and innovative partnerships between rural MFIs and re-mittance operators can generate synergy and other benefits by easing competition and reducing costs, thereby offering more resources and increased op-tions for families to use their capital productively.
Difficulties. If needed, a brief feasibility study may
be initiated. However, this is not a must as the al-ready existing Kiva site can serve as a model. A data-base or directory of migrants is needed to keep this tool going in the long run. The initial campaign for migrant lenders needs to be initiated to stimulate the target migrant groups in various countries.
8 Costs:
Costs will vary from country to country. Rough estimates are shown below:
Items Days US$ Cost/
Unit Total Cost
Partners development 10 150 1,500
Raising the initial portfolio 20 150 3,000
Developing the site 3 100 300
Seeding: Populating the site 4 150 600
Site promotion 10 150 1,500
Admin & content updating 2 100 200
Total 7,100
9 Dissemination:
With Kiva as model, this tool is applied worldwide and has proven to be an alternative channel for accessing funds. As a migrant tool, it uses specific relations between the Diaspora and their countries of origin, generating substantial amounts of funds based on rather small individual contributions. It uses the internet as means of communication and transaction, and must not be loaded with condi-tions that block ideas and weaken the entrepre-neurial spirit. It offers the borrowers to concentrate on their business and for the migrant lenders to specifically direct their investments however they may want it to be done.
10 Links to other
MITOS
tools:
MITOS Tool 01: Migrant Opportunities Website MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 05: Cash Flow Management
MITOS Tool 09: Import and Export Service Training MITOS Tool 12: Migrant Market Place
MITOS Tool 15: Virtual World for Migrants –
3D Collaboration
Prepared by:
Dr. Eduardo Canela, CEFE International
[email protected] www.cefe.net
Annex 1: How KIVA works
http://www.kiva.org/about/how/even-more
To speed things up and to minimize the number and expense of wire transfers, Kiva works on a net billing system. This means that, for any given month, we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for entrepreneurs on Kiva.
If the balance is positive, that means that the Field Partner has raised more than they need to repay, and we use those funds to credit your lender account with the repayments due to you. If the balance is negative, then the Field Partner has 30 days to send us a payment for the balance. As soon as we receive that payment, we use those funds to credit your lender account with the re-payments due to you.
Repayment and other updates are posted on Kiva and emailed to lenders who wish to receive them.
6. When lenders get their money back, they can re-lend to another entrepreneur, donate their funds to Kiva (to cover operational expenses), or withdraw their funds to their PayPal accounts. 1. It all starts with our Field Partners, which are
microfinance institutions operating around the world. Our Field Partners approve and disburse a microloan to an entrepreneur in their community. They take a picture of the entrepreneur and write down the entrepreneur’s story.
2. The Field Partner uploads the entrepreneur’s profile to Kiva’s website. The profile, if it’s not in English, is translated by one of our hundreds of volunteer translators. After translation, the pro-file appears live on Kiva.org.
3. Lenders like you browse the entrepreneurs’ pro-files and choose someone to lend to, using PayPal or their credit cards.
4. Kiva provides the funds to our Field Partners by aggregating the loan funds from all contributing lenders. Most Field Partners then use the Kiva lender funds to backfill the loan they’ve already disbursed to the entrepreneur. Disbursals can happen up to 30 days before, or 30 days after a loan request is uploaded to the Kiva website. 5. Over time, the entrepreneur repays his/her loan.
The Field Partner collects those repayments and lets Kiva know if a repayment was not made as scheduled. We give Field Partners the option to cover both currency losses and entrepreneur defaults.
Annex 2:
The Lenders Page
The SME Borrowers Page
Source: Kiva, accessed on June 28, 2012
