This document summarizes a proposal for Community Development Venture Capital Funds in West Africa. It discusses how microfinance has limitations and philanthropy is not focused on economic development. The funds would provide equity, near-equity, and debt investments for private sector projects in areas like agriculture, infrastructure, and small businesses. This aims to encourage enterprise and job creation through financial support for initiatives that traditional sources fail to fund. The funds would operate according to principles of community economic development and socially responsible investing.

1. Date: 22/03/2008
Africans are Asset Rich & Cash Poor
VillageDirect.Org
Community Development
Venture Capital Funds
Authored By:
Napoleon C. Birch Jr.

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Africans are Asset Rich & Cash Poor
INTRODUCTION
The existence of poverty is often attributed to geography, ineffective
governance, economic policies, education, healthcare, poor infrastructure, the
absence of a vibrant private sector, access to financing and consequently
political unrest.
Poverty in developing countries has historically been addressed by charitable
donations and official development aid. Microfinance has recently gain
popularity as a means of helping people raise
themselves out of poverty. Although these
efforts are valuable in addressing the issues of
poverty by helping people to survive; they fall
short when it comes to making capital available
for business start-ups and infrastructure projects
that actually raise people out of poverty.
In the case of West Africa, financing is urgently
needed for investment in agriculture and food
security. Financing is also needed for infrastructure projects involving road
transport, air transport and telecommunications as part of the regional
integration plan for West Africa; a plan sponsored by the Economic
Community of West Africa States and the World Bank. In addition,
financing is needed for start-up businesses to provide support services.
Microfinance
Microfinance involves local organizations called microfinance institutions
making small loans of $200 or less to poor people in developing countries.
These loans are to be use to establish or expand small businesses that will
generate additional income for the borrower and their families. The logic is
this extra income will allow a poor family to buy food, access healthcare,
educate their children, put aside savings and lay the foundation for a better
future.
According to an article published in the Winter 2008 Wilson Quarterly by
Karol Boudreaux, a senior research fellow at the Mercatus Center at George
Mason University and Tyler Cowen a professor of economics at George
Mason University; the achievements of microcredit, however, are not quite
what they seem.

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Africans are Asset Rich & Cash Poor
• According to Boudreaux and Cowen most microcredit banks are
charging interest rates of 50 to 100 percent on an annualized basis
and the loans typically must be paid off within weeks or months.
This creates a dilemma in that a borrower’s business may only be
growing at 20 percent a year; yet they are expected to pay interest
at 100 percent a year.
• Considering most microfinance institutions prefer lending to
existing businesses and often refuse to finance start-ups,
Microcredit does not always lead to the creation of small
businesses.
• Research by Boudreaux and Cowen showed that most
microfinance institutions are financing spending and consumption
more so than business start-up and growth. In India and many
other places, Boudreaux and Cowen saw loans were often used for
a doctor visit. The director of a Small Enterprise Foundation and
local microlender in Tanzanian disclosed that 60 percent of his
loans are used to send kids to school and about 40 percent are for
investments. Likewise, a study conducted in Indonesia revealed 30
percent of the borrowed money was for some form of
consumption.
Based on the evidence, these loans are more about survival than economic
security. However, these loans are a still very good deal for poor borrowers
when compared to the alternative offered by moneylenders. A typical
moneylender is a single individual. They typically borrow money from their
wealthier connections and make loans to individuals in need. Moneylenders
typically charge 200 to 400 percent interest on an annualized basis. They
operate informally, off the books, and outside the law.
Philanthropy
According to Giving USA, American donors gave more than $260 billion to
charitable causes in 2005. Approximately 3 percent or $7.37 billion of that
total went to disaster relief. Relatively speaking, almost none of this money
was allocated for economic development and job creation.
Contributions by Sub-sectors
• Religious organizations received $93.18 billion
• Educational Organizations – received $38.56 billion.

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Africans are Asset Rich & Cash Poor
• Arts, culture and humanities organizations: $13.51 billion, a decrease
of 3.4 percent from 2004 and 5.2 percent of total giving in 2005.
• Public-society benefit organizations: $14.03 billion, an increase of 8.3
percent from 2004 and 5.4 percent of total giving in 2005.
• Environment and animal organizations received $8.86 billion.
• International affairs organizations - international relief and aid
received $6.39 billion.
• Unallocated contributions were $16.5 billion. This category typically
includes gifts to newly formed organizations.
Contributions by Sub-sectors Chart

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Africans are Asset Rich & Cash Poor
COMMUNITY DEVELOPMENT
VENTURE CAPITAL FUNDS
Community development venture capital funds provide an avenue to access
capital for the development of private sector projects that do not qualify for
funding through donations, official development aid, grants or microfinance.
These funds are based on the principles of Community Economic
Development, Social Responsible Investing and Venture Capital.
Community Economic Development is an approach to development that
recognizes the interdependence, complexities, and ever changing nature of
economic, environmental and social challenges faced by communities. It is
based on the belief that development challenges should be addressed in a
holistic and participatory way. Community Economic Development stresses
the use of local knowledge and significant involvement by community
members.
Socially responsible investing is an investment strategy with an objective of
maximizing financial return and certain social good. Socially responsible
investors have generally favored corporate practices which are
environmentally responsible, support workplace diversity, and increase
product safety and quality. In some cases,
investors avoid businesses involved in
alcohol, tobacco, gambling, weapons and
other military industries, and/or abortion.
It is believed that socially responsible
investing dates back to the Quakers. In
1758, the Quaker Philadelphia Yearly
Meeting prohibited members from
participating in the business of buying or
selling humans.
Because the vast majority of companies do not meet the rigorous standards
required by the public markets, they must turn to private sources of equity or
debt. Venture capitalist generally invests in start-up and early stage
businesses. This is the appropriate source of financing at certain stages of a
company’s life. It is best suited for young companies with minimal assets and
uncertain prospects.

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In debt financing, a company issues bonds or interest bearing notes to
investors. Investors expect competitive interest payment for this use of their
money and repayment of their original investment within a fixed period.
Investors will examine historical cash flow and credit history information of
the company in order to assess its ability
to repay. They also require the company
to pledge assets as collateral in the event
of default.
Equity financing involves a company
selling ownership in their enterprise to
investors. The company does not need to
pledge assets as collateral, make interest
payments or guarantee repayment to the investor. Investors hope the
company will perform well and increase the value of their investment. The
investor expects to sell and realize a profit on their initial investment.
Considering the risk involved with an investment in equity, the typical
investors will only invest if the potential for profit is substantially
competitive with competing debt securities.
Near-equity investments are debt securities that attempt to capture some of
the upside of equity. They contain certain elements common to equity
investments.
• Debt with Royalties – a loan with the right to a percentage of
company sales and profits.
• Debt with Warrants – a loan with the option to purchase equity at
a pre-negotiated price.
• Convertible Debt – a loan that is convertible to equity.
MISSION
VillageDirect.Org Community Development Venture Capital Funds aims to
apply the business building power of equity and near-equity investments to
poverty reduction and economic development. This will be accomplished by
encouraging enterprise as the solution for sustainable development and
economic empowerment. The funds will infuse investment capital and
entrepreneurial expertise into the wealth of ingenuity and innovation of
communities where traditional investment capital fails to flow.

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VALUE SYSTEM
The value system of the VillageDirect.Org Community Development
Venture Capital Funds includes ethical behavior, social and ecological
responsibility, intellectual honesty, team work and continuous learning;
while promoting job creation, cross border trade, education, and
partnerships.
THE FUNDS
Business Advisory & Financial Services Fund
• This fund will provide operational assistance and invest in
qualifying entities that provide businesses development,
accounting, insurance, savings, investment and other finance
related and supporting entities.
Real Estate & Infrastructure Fund
• This fund will provide operational assistance and invest in
infrastructure projects involving raw land, roads, transportation
facilities, agricultural facilities, hospitality facilities, educational
facilities, medical facilities, warehouse and storage facilities, shared
corporate offices, sport facilities, entertainment facilities, mixed-
use residential communities, office parks and other real estate
related and supporting entities.
Information and Communications Technologies Fund
• This fund will provide operational assistance and invest in making
information and communications technology accessible to
individuals, communities, professionals, small businesses,
institutions and governments.
Franchise and Business Holding Fund
• This fund shall provide operational
assistance and invest in, franchise, license,
broker, represent and form partnership
with manufacturing and services businesses
that create jobs and satisfy un-met market

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Africans are Asset Rich & Cash Poor
INVESTMENT PHILOSOPHY
Management
• Multiple Investment Advisors
• Experienced in identifying opportunities and creating value
• Resourceful and flexible in structuring deals
• Personal commitment to the enterprise success
Disciplined
• Patient capital
• Calculates and manages risk
• Superior return
Preservation of Capital
• Rigorous due diligence
• Thoughtful and innovative capitalization strategies
• Employ insurance & market base hedge strategies
• Asset Allocation
• Adequate capitalization and reserves
Triple Bottom Line
• Targeted and measurable social returns
• Targeted and measurable
environmental returns
• Competitive Economic returns

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Africans are Asset Rich & Cash Poor
INDUSTRY FOCUS
• Water
• High Value-added Horticulture
• Floriculture
• Services
• Tourism
• Transportation
• Infrastructure Development
• Agro-Processing
• Cocoa
• Coffee
• Seafood
• Lumber
• Fruits & Vegetables
• Minerals & Metals
• Communications
• Transportation
• Education
• Warehousing & Distribution
• Healthcare
• Energy-related Products & Services
• Fisheries
• Manufacturing
• Construction
• Real Estate
• Finance

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Africans are Asset Rich & Cash Poor
PROJECTS
Projects ready for implementation in Liberia under the community
development venture capital funds includes; foreign direct investment and
promotions intermediary services, the rehabilitation and development of
farms, and the development of supporting industries.
The first sets of projects are located in Grand Gedeh County, Liberia. The
farm consists of rice, cocoa trees, palm trees, banana trees, plantain trees,
sugarcane, tropical fruits, vegetables, and forestry opportunities. Grand
Gedeh borders Côte d'Ivoire; where some of the most valued coffee in the
world is grown. Unlike Côte d'Ivoire, the farms in Grand Gedeh have high
growth tropical rain forest; considered by many to be the most favorable
condition for growing coffee.
The second sets of projects are based in Sino
County, Liberia. They also involve foreign direct
investment and promotions intermediary services,
and the development of urban land, rubber
plantations, and farms with fruits, vegetables,
rice, and forestry opportunities.
Sino County is home to Sapo National Park; one
of the last remaining virgin rain forest in West
African. Visitors to Sapo National park will catch
a glimpse of pygmy hippos, forest elephants,
chimpanzees, and the giant pangolin; birds such
as the turaco and hornbill; and “candle trees” with white wax-like sap. The
sap of the “candle tree” will burn all night if you light it on fire.
Unfortunately, very few outsiders have been to this park. First, getting there
is inconvenient and very difficult. Once there; other then the park warden’s
house, there are no accommodations or facilities for visitors. There are no
trails inside the park.
The park staff consists of local guides, hired so they will stop poaching the
endangered park animals for food. The park warden is paid a dollar a day.
Liberia’s tourism budget last year was only $3,000. Sapo National Park has
the potential to become a world class tourist attraction; with, cabins on the
edge of the park, small bridges over the river, marked maintained trails,
rafting, water sports, picnic areas, camping grounds, guided bird walks, a
lodge serving contemporary versions of local cuisine and spas for tourists
tired from a long day’s hike.

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Africans are Asset Rich & Cash Poor
The cultural history, flora and fauna of Liberia; including, white sand
beaches, lagoons, rapids, and waterfalls will easily support the development
of eco-tourism.
There is an abundance of wind, sun, rivers, lakes and streams nearby to
support development of a reliable supply of renewable energy for these
projects. In addition, there are verifiable deposits of diamond and gold on the
land to serve as collateral for current and future
investments. Arterial mining of diamond and gold
are currently being carried out by some locals.
The discovery of Gold in California is a perfect case
study of how prudent management of natural
resources like precious metals can lead to large
scale economic development. As a result of the
discovery of Gold, San Francisco grew from a tiny
hamlet of tents to a boomtown. Roads, churches,
schools and other towns were built. A system of laws and a government were
created. New methods of transportation developed as steamships came into
regular service and railroads were built. This naturally lead to the growth of
agriculture and trade on a wide scale.
What these projects need are capital for operations; technical skills to
improve and expand production; the development of agricultural processing
facilities; logistics and distribution facilities; roads; reliable supply of
renewable energy; information and communication technologies services;
water and sewer systems; storage facilities; machinery and equipment; and
supporting industries. Feasibility studies needs to be conducted to determine
appropriate development options and the quantity of diamond and gold
deposits available to serve as collateral.
These projects lend themselves to the development of the hospitalities and
mixed-use facility envisioned as part of the VillageDirect.Org offline service
delivery strategy. Housing demand by expatriates will increase as
infrastructures are improved and jobs are created from construction, farming
and the development of industries.
Execution of these projects will create much needed jobs in a country with an
80% unemployment rate and provide above average triple bottom line return
for investors.

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Developers Bio
Contact Info:
Napoleon C. Birch Jr.
5331 Pine Street
Philadelphia, PA. 19143
Tel: 267-265-2862
SkypeName: bmemisolallc
E-mail: ncbirchjr@gmail.com
www.VillageDirect.Org