According to the UN, five to seven trillion US dollars a year are lacking to achieve the sustainability goals. It is therefore clear that the international community will not achieve these goals by 2030 without a substantial contribution from the private sector. WECONNEX develops business models for achieving these goals in developing countries. The young company thus creates attractive opportunities for investors to invest their money sustainably.
Can one do business with the poorest people in the world? Yes, finds WECONNEX – as long as these people themselves become part of the business. This means that they find economic access and profit from it in a sustainable and fair way. Only in this way poor regions can be developed sustainably. And this is the only way, for example, to achieve growth through entrepreneurship and thus reach SDG 8.
Worldwide, around 4 billion people live on less than 3,000 dollars a year. They belong to the lowest layer of the economic pyramid. Even if per capita income is low, it still represents enormous business potential.
Taking into account the interests of all parties
With its NEXUS projects, WECONNEX supports small farmers and fishermen in the sustainable production of food and connects them to the national markets. In contrast to traditional approaches, a project involves all parties in a cooperative model – from farmers to investors. This ensures that everyone pulls the same rope and profits are distributed fairly. The projects thus combine the development of infrastructure in rural areas with suitable business models and strive for ecological, economic and social improvements.
Combining financing instruments
Investors achieve real impact with their commitment and at the same time promote entrepreneurship in the respective countries. For investors, the initiatives provide long-term returns – as shareholders or lenders. In addition to commercial investors, foundations and NGOs are involved in the projects. This so-called “blended finance” approach reduces the risk for private investors thanks to donations. On the other hand, commercial funds enable faster scaling. In this way, all parties achieve their goals and improve impact and sustainability. WWF Switzerland, for example, as shareholder and project partner of WECONNEX, also came to this conclusion.
Venture a paradigm shift
WECONNEX is convinced that the future of development cooperation lies in building inclusive business models. This requires a rethinking of aid organisations and government agencies, but also of investors: “Impact investing” does not just mean investing in projects with low risk and high returns, such as large solar plants, smart materials or microcredit systems. After all, the greatest impact is achieved by supporting people directly in their core activities – and in developing countries this is usually agriculture or fishing. These sectors do not promise the same returns as the above-mentioned technology projects, but all the greater impact and a fair profit in the long term.
This article by WECONNEX was published in the Unternehmerzeitung in November 2018 (in German).
Source: nexus ch