Mi-fi is a student run organization from Zurich, with the goal of raising awareness on Microfinance and through that improving Impact Investment in general.
We are currently running our first Mi-fi Module in Georgia, where we are collaborating together with the MFI Crystal. Two of our Mi-fi members, Noah and Stepanka are in and around Kutaisi, to work together with the local Microcredit provider. Our visit has two main goals – the first is to present some basic research and inputs on extension services and value chain finance. The second lies in an analysis and feedback on workflows and processes on the different products and services offered by Crystal.
An Intriguing Idea
In order to spread entrepreneurial spirit among Georgia’s youth, Crystal has founded the Young Entrepreneurs Club. Especially in rural areas and among the older generation, parts of the spirit of the Soviet Union has managed to linger loner on. Many await the support and direction of the government. It is very important that young people who show initiative are supported in turning their ideas into reality; it is the purpose of the Young Entrepreneurs Club and the Crystal summer school to do so.
Visiting a meeting
On one evening we visited a local section of the club. In a meeting room in Crystal’s headquarter six young people met to discuss the ideas and concepts of their projects. During the club’s meetings they learn about Marketing, Finance, Branding and other related areas from Crystal’s branch managers and other Crystal professionals. Projects can be funded with 2’500 $ granted by Crystal and US AID.
One example is a young entrepreneur who wanted to use the 2’500$ to start growing grass using hydroponics. The concept had the goal to produce several hundred kilograms of grass using only water and some nutrients. His possible market are farmers during winter when the cows cannot graze outside and have to be fed with hay and corn, which currently have to be partially imported at high cost.
An Opportunity for Value Chain Building
“Do you think the farmers have waited for this? They are conservative people, do you think that they will buy this new product rather than sticking to their old ways?” – We are asked by Giorgi Janelidze, one of Crystal’s Marketing people. Mister Janelidze’s scepticism is well founded. Farmers have been using traditional methods for decades, which are not likely to change unless sold via innovative channels.
This situation would be a great opportunity for value chain building. It is vital that such innovative entrepreneurs get access to a functioning value chain in addition to a credit. Since both, the farmers and the grass grower are part of Crystal’s portfolio, the MFI could serve as an intermediary, closing the missing link in the chain between the producers and the consumers. This is only one example, with countless other cases for which Crystal could connect individual entities to larger Value Chains. It is vital that MFIs become aware of this possibility and use their knowledge as intermediaries.