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Innovative Financing for ICT4D

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Innovative Financing for ICT4D The Case of TARAhaat – PowerPoint PPT presentation

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Title: Innovative Financing for ICT4D


1
Innovative Financing for ICT4D
The Case of TARAhaat
2
TARAhaat A Social Enterprise
  • Objectives
  • Sustainable Development
  • Sustainable Business
  • Using ICT

3
Making Development a Good Business
  • Creating Wealth
  • Generating Public Benefits

4
The Strategy
  • To evolve a commercially viable ICT-based
    enterprise
  • To deliver public benefits by satisfying private
    needs

5
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6
Problem 1 High Costs
  • Costs set by the Global Economy
  • Experts, staff, equipment, connectivity, power,
    services
  • Costs increased by National Policies
  • Tolls and Tariffs, Lack of Services to Rural
    Areas
  • Costs added by the Need to Localize Solutions
  • Content, Applications, Language
  • Costs multiplied by Lack of Infrastructure
  • Connectivity, Power, Fulfilment Systems

7
Problem 2 Limited Revenues
  • Revenues Limited by the Local Economy
  • Purchasing power of less than 1 per day income
  • Revenues Limited by Size of Decentralized Markets
  • Small, remote communities

8
Problem 3 Limited Capacity of Rural Citizens
  • Lack of Familiarity with Technology
  • Lack of Management and Marketing Skills
  • Lack of Access to the National Economy

9
Problem 4 Perceived High Investment Risk
  • High Costs Low Revenue Potential Limited
    Capacity High Expected Risk

Stage Problem
Start-up No seed money available
Early Sceptical, modest support
Development and Pilot (Proof of Concept) Suboptimal support
Deployment and Operation Restrained financing
10
Opportunities I
  • Large Numbers
  • Economies of Scale
  • Franchised Networks
  • Low Cost Replication

11
Opportunities II
  • ICT
  • Efficient Distribution
  • Affordable Localisation
  • Overcomes Communications Barriers

12
Result
  • All the market risks are compounded by the real
    reluctance to finance such operations by
  • Public Funds Donors, Foundations
  • Market Funds VCs, Banks, Financial
    Institutions
  • ICT Corporations Equipment, Software
  • Other Corporations Potential Strategic
    Alliances
  • Opportunities are discounted

13
The Enterprise Life Cycle
14
TARAhaats Life Cycle
15
TARAhaats Funding Challenge
16
Lessons from TARAhaats Experience
  • Donors and Foundations
  • Must recognize that scalability and financial
    viability involve the generation of profits,
    which are necessary to raise market-based
    financing
  • Access
  • Speed of response

17
Lessons from TARAhaats Experience
  • International Institutions
  • Improve outreach programmes
  • Must accelerate response times
  • Develop new tools for risk assessment of ICT4D
    ventures
  • Support a commercial perspective

18
Lessons from TARAhaats Experience
  • Governments
  • Recognise need for partnerships
  • Eliminate tolls and tariffs on movement and/or
    import of equipment, software, etc
  • Easier certification is needed for educational
    programs delivered by ICT-based providers
  • ICT ventures should be used for the front end
    delivery e-governance services

19
Lessons from TARAhaats Experience
  • Market Funds
  • Venture Capital is not a player
  • Third world risk (developing countries)
  • Complexity of due diligence
  • High Investment threshold
  • Ascribe little value to social returns
  • Banks and Financial Institutions
  • Do not participate in early stage funding

20
Lessons from TARAhaats Experience
  • Corporations
  • Must develop innovative mechanisms for vendor
    financing
  • Need to establish special pricing mechanisms for
    ICT4D
  • Should provide mentoring and technical support
  • Need to recognise the market potential

21
Lessons from TARAhaats Experience
  • Civil Society
  • Must recognize the importance and legitimacy of
    financially viable strategies to scaling up and
    ensuring continuity

22
TARAhaats Call for Action
  • Establish Two ICT4D Funds for Initiatives with
    Development Potential
  • With clear long-term financial returns
  • Without clear long-term returns
  • Financial Packaging
  • Public
  • Private

23
Benefits from ICT4D Mother Funds
  • Consolidation of Efforts
  • Sustained Financial Support
  • Establish Best Practices
  • Accelerate Delivery
  • Metrics and Accountability

24
ICT4D Mother Fund 1
  • Create Fund
  • Proactively finance viable initiatives
  • Invest sufficiently to get to market financing
  • Staff with Practitioners, not armchair experts
  • Develop Best Practices and Systems to support them

25
ICT4D Mother Fund 2
  • Create Fund
  • Identify ventures with substantial social
    objectives and deliverables needing long-term
    support
  • Support them
  • Assist them to become financially viable

26
Final Lesson from TARAhaats Experience
  • The International Community
  • Less talk, More action

27
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