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Every quarter I receive that wonderful email from my bank telling me that my interest rate has been 'adjusted'. All I notice is that my interest rate is slowly reaching 0. As it stands interest is already lower than inflation, so the situation isn't too bright.
Luckily I have been playing around and entertaining myself for a few years now with a service called MyC4. MyC4 is an online platform that allows people to give loans to African businesses for a slightly more optimistic interest rate than your bank. And you can already start with €5!
So how does it work?
Business owners (mostly small businesses) apply for a loan to a credit provider in their country. They make a case for their loan, and request a certain amount of money.
The credit provider then publishes the loan on MyC4, and investors can start lending money.
The platform works through a bidding system. The loan applicant has a maximum interest percentage they can accept, and once the full loan amount has been put forward, the lowest interest rates win. So my €50 at 10% interest will knock a €50 loan at 12% off the list. That way the applicant can get the loan at the cheapest possible rate.
Once the loan is funded, the applicant gets their money, and the repayments start. Of course your shares with each repayment depends on the money you invested into the loan.
If 10% or 12% sounds too good to be true, you're right. There are a few catches of course:
Currency exchange is one of them. Since these loans are in countries with high inflation figures that fluctuate drastically, you will almost always lose some money on the exchange. The loans (and repayments) are nominated in local currency, which would probably devalue (relative to your own, harder currency) over the term of the loan.
Another risk is of course that the loan gets defaulted. It can of course happen that a business fails to pay back the loan. If this happens, you will not see the rest of your money.
But even considering these risks, I am now doing quite well. The loans I currently have running are on track, and I am receiving about 6-8% interest on them.
In the end your goal should not be to become rich, it should be to have fun. And how can spending €5 or €10 on a small business in Kenya, and watching the €1.20 monthly payments come in not be fun? So stop hesitating, and go invest now!
To get you started, I'll offer a deal... The first 5 people who share this post on their Facebook wall will receive €5 from me to invest through the MyC4 platform!
In April and June of 2013 I was in Ghana for the Responsible Recycling project. During those trips I had the privilege to visit Agbogbloshie, a scrap-dealers compound in Accra. Agbogbloshie, is home to about 5,000 workers, mostly from rural areas of Ghana. These men, women and children spend day and night collecting, breaking apart and sometimes re-assembling everything from your old Mazda 323 to mobile phones, laptops and refrigerators.
Is this a perfect example of cradle-to-cradle, where scrap from one product ends up giving life to a new project, and not ending up in landfills? A short visit to Agbogbloshie will give that question conficting answers...
On both visits there, I saw men and women working very hard constructing, de-constructing and selling items. Working hard for their money in a country where begging is also a big culture. This was promising. Unfortunately, I was also confronted with the negative aspects of this community.
The system works like this:
- Young men/boys collect electronic and other metallic scrap from around Accra on pushcars. They wheel these pushcars by hand to Agbogbloshie, where they sell the items they have collected to their bosses, or simply to those offering money for them.
- Workers in Agblogbloshie purchase these items, often with money that they took out on a loan that same morning.
- These workers then disassemble and sort out these items. They separate the valuable from the less-valuable items, and sort the different parts into piles they can sell separately.
- The working parts are sold to others in the community that will assemble new products from them; sometimes 2 or 3 broken laptops can end up as one working laptop, which they can then sell. Quite a few of these 'laptop specialists' can be found in the compound, with piles of working laptops for sale.
- Raw materials such as copper, lead, aluminium, etc. are sold by the kilo, sometimes to organisations exporting these materials, and sometimes to others in the community that create new items such as cooking pots and coal stoves from them.
- Any materials covered by plastic are burnt in order to keep the metal, and get rid of the plastic. And what do they use in order to get a nice, hot fire? Foam from old refrigerators, filled with harmful CFCs.
- Whatever is left over and (for their purposes) worthless is dumped on the ground, or in the lagoon nearby.
This system creates value where many would not see value. Think your old TV is worthless? Not to these people! Think your laptop is too slow? They don't! The system also 'employs' a very large number of people, that might otherwise be begging or simply costing money. With an open mind, there are many positives about the community at Agbogbloshie.
Unfortunately, we cannot ignore the negative side of the situation. The plumes of smoke containing carcinogens, CFCs and other harmful substances billowing into the air. The underaged boys that hack away at car parts without protection, and the extreme pollution of the nature around the site. The photos in this post tell the story quite clearly.
So how can we solve this problem? How can we focus on the positives of this community (hard-working people, a functioning economy, cradle-to-cradle) and use them to get rid of all the negatives? I think the answer is simple: investment. With little or no alternatives in Ghana for recycling, the workers and the public have no choice but to let their scrap end up in Agbogbloshie.
But what if we set up recycling plants around Accra to handle all this scrap? Everyone knows there is value in waste, and a business case in this situation is easy to make. Some might say one of the biggest challenges in setting up a business is a good work-force. Well that problem is also solved. There are already thousands of people at Agblogbloshie that can take apart your television faster than you can go buy a new one. All they need is a good working environment, training and financial incentive to work in this way.
So what are we waiting for? Why don't we start investing in recycling in developing nations?
See our project on Responsible Recycling here.
Anyone driving around at night in The Netherlands lately will have noticed that it is considerably darker than it used to be. Why? Because the Dutch government implemented one of their many plans to save money and help us out of the economic recession. Apparently turning off the lights on the motorways at certain hours in areas where there is less traffic will save us € 35m annually. € 35m, a very large sum of money that was being used simply to keep the asphalt lit. The first thing that came up in my mind when I heard this news was: "Why only now?".
Why did we need a recession, 4 years of a recession before someone decided that we are wasting money with a solarium for empty tarmac? In some northern provinces, and many countries around the world, it is perfectly normal to have unlit highways.
This is a classic example of how a crisis can lead to innovation. Rahm Emanuel said "Never let a good recession go to waste", and he was right. We apparently needed to brainstorm for ways to improve the economy for 4 years before someone thought of this idea.
Maybe that's a lesson for all of us... Instead of just thinking how we can get more clients, bigger projects and in the end more money, maybe we should imagine what we would do in a crisis. What if your product suddenly is offered for free by Google? What will you do then? Innovate, and you will more forward!
"If you're not moving forward, you're standing still."