AGORA PARTNERSHIPS A Better Solution to Nicaraguan Rural Poverty.
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Transcript of AGORA PARTNERSHIPS A Better Solution to Nicaraguan Rural Poverty.
Poverty in Context
1980’s: Civil War 1985: U.S. Trade
Embargo 1989: Collapse of
the International Coffee Agreement
1998: Hurricane Mitch
Destroyed infrastructureEconomic crisis with inflation of 13,000%Depressed coffee prices force farmers into debt
Over 500,000 people left homeless
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
Barriers to Entrepreneurship
Closed Social Networks (i.e. Entry) Lack of Formal Business Training (i.e.
Education) Lack of Financing (i.e. Access to Capital) Poor Entrepreneurship Climate (i.e.
Execution)
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
Drivers of Rural Poverty
Poor Education & Infrastructure
Barriers to Entrepreneurship
Overexploited Land
Lack of Investment
Lack of Economic Diversity & the “Missing Middle”
The Agora Model: Barriers to Entrepreneurship
Entry
Education
Access to Capital
Execution
Merit-based identification of promising entrepreneurs.
Intensive consulting by US-based graduate students.
Direct investment in promising ventures that meet strict criteria.
Support including: strategic advice, business contacts and financial management.Barriers to
Entrepreneurship
Agora Solutions
The Agora Model: Company Profile
Clearly defined constraint to growth
Operate in sectors where Central America has natural competitive advantage
Cash flow positive
Innovative
Require investment of $25K to $250K
• Eco-tourism• Sustainable
agriculture• Value-added
manufacturing• Agricultural
processing• Organic foods,
etc.
Or can be within 18 months
Provide product or service that is new or reaches new customer base
The Agora Model: Social Impact
An Agora Entrepreneur must:
Be capable of creating a clear and quantifiable social impact through:
• Job creation• Protection of
environment• Providing
goods/services to the needy
Adhere to Agora’s social responsibility guidelines by meeting or exceeding:• Ethical,• Legal,• Commercial and• Public
Expectations
Support the 10 Principles of the UN Global Compact covering:
• Human rights• Labor standards• Environment• Anti-corruption
Comparison
Agora Partnershi
ps
Microfinance
Institutions
Traditional
Venture Capital
Technical Assistance Groups
Example:Procredit
Example:Technoser
ve
Debt Financing
Equity Financing
Target Micro Firms
Targets SMEs
Provides Consultin
g
Comparison
Agora Partnershi
ps
Microfinance
Institutions
Traditional
Venture Capital
Technical Assistance Groups
Example:Procredit
Example:Technoser
ve
Debt Financing
Equity Financing
Target Micro Firms
Targets SMEs
Provides Consultin
g
Bambucasa
Jan Van Bilsen- successful entrepreneur Harvests and converts bamboo into
affordable building materials for housing
Testimonial
“The guys in the village next to my farm were making $1 a day, and that’s when they could find work. I offered them a consistent salary and trained them in bamboo treatment and construction... Now they are a solid, highly motivated team, with good skills, good salaries, and a long-term perspective on how to get out of poverty through training and learning skills... The success of the business is key to all of this. If we can't make the business side work, none of the change we hope for is going to happen. That's why an organization like Agora is essential.” – Jan Van Bilsen
Ways to Improve
Lack of strong quantitative metrics No effective ways to measure impact of work Best measures of workshop effectiveness currently
come from participant surveys New metrics such as ROI needed to evaluate success
of entrepeneurs receiving consulting and funding
• Consulting hours provided by MBA consulting teams:over 6,800• Consulting hours from local Agora staff and volunteers:3,000
Ways to Improve
More extensive and effective communication
New organization which is not widely known
Expand on website and annual report Refine website: contains several links
which do not work• Profiles of Agora’s work in local newspapers, television,and radio: 24
Ways to Improve
Increase Funding Eventually start to increase size and scope
• Applications to Agora program: 148• Ventures matched with consultants: 32• Consultants matched with ventures: 142• Agora-supported companies receiving investment from the Agora Fund: 3• Agora-supported companies receiving outside investment: 3