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Connecting to Diaspora Communities Through Web Portals: Opportunities and Limitations


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Location

QED Group, LLC
1250 Eye Street NW
Suite 1100
Washington, DC 20005
United States

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Presenter(s):

Eric Guichard
Homestrings

Molly Mattessich
VEGA Alliance

Date:
October 23, 2012 - 9:00am - 10:00am
Photo Credit: IICD, Community Information Centre project, Ghana

Diaspora communities have played a longtime role in the development of their countries of origin in areas as diverse as business development, financial investments, philanthropy, volunteerism, advocacy, etc.

For instance, the amount of money diaspora communities send to their home countries as remittance far exceed that of official development aid. In 2010, the globally recorded amount in remittance flows to developing countries was $325 billion and the World Bank estimates that amount to reach an estimated $404 billion a year by 2013. Regionally, African diaspora communities contribute an estimated $40 billion in remittances annually to the continent. Similarly, philanthropy from the US to developing countries was estimated at $39 billion in 2010 by the Index of Global Philanthropy and Remittances.

These staggering amounts have triggered a change in recent years among the formal donor community as diaspora communities are increasingly recognized as a credible and meaningful contributor to development. Given the significant contribution of diaspora communities, a key issue facing the donor community has become how to engage and partner effectively with diasporas? In this area of technological hyper-development, web portals have become omnipresent in any development venture and diaspora-driven development is not different. This seminar will present two such portals—Homestrings, a private investment platform, and Africa Rural Connect , an online global philanthropic network—and examine their effectiveness in engaging diasporas in development.

Presenter Bio:

Eric Guichard
Homestrings
Headshot of Eric Guichard

Eric-Vincent Guichard is currently the Chairman and Chief Executive Officer of GRAVITAS Capital Advisors, Inc; He is the founding member of GRAVITAS Capital (1996-current). In 2010, Guichard founded Homestrings.com, an electronic investment platform that caters to members of the Diaspora. Homestrings.com showcases vetted investment projects and funds that focus on development objectives chosen by the Diaspora. These projects and funds range from infrastructure to healthcare. Prior to GRAVITAS Capital, Guichard was Portfolio Manager at the World Bank (1990-1996) where he also served as technical adviser to sovereign and multilateral institutions worldwide. He is a graduate of the University of Dakar Senegal, of Duquesne University in Pittsburgh and of the Harvard Business School where he earned his MBA (World Bank Scholar and Harvard Fellowship award). He serves on several non-profit boards, including: the Center for Financial Policy – an academic think tank on policy reform; Capital Partners for Education – an inner city mentorship program; and OIC International – an initiative that encourages economic self-reliance in Africa.

Molly Mattessich
VEGA Alliance
Headshot of Molly MattessichMolly Mattessich launched the Africa Rural Connect program (ARC) in 2009 while working as the Manager of Online Initiatives at the National Peace Corps Association. She also led the Association’s branding, marketing, and public relations campaigns, and oversaw the launch of a new website and social network. In 2012, she presented ARC at the Secretary of State’s Global Diaspora Forum and the World Food Prize’s Borlaug Dialogue. Molly served as a Peace Corps Volunteer in Mali from 2002-04. She earned a Bachelor’s degree from Wellesley College and is pursuing a Masters in Communication at Johns Hopkins University.
Comments (11)
Oct 31, 2012   17:03

Question to Eric: Could you elaborate a little bit on the major challenges you have faced regarding regulation and how you overcame it please?

Oct 31, 2012   17:13

Response from Eric: The thing about regulations is that they are a necessary evil that help differentiate those players who strive to do the right thing by investors from those that seek to defraud them. Now it is a necessary evil that is expensive. As far as a start up is concerned, in addition, in the case of Homestrings' objectives, the current framework can seem undemocratic. I am referring to the distinction between wealthy investors and those who are not, as to who gets access to private opportunities back home. Now there are paths but they are expensive (e.g. stock exchange listing of each opportunity, etc). We have 20 years+ experience successfully managing assets for institutional investors and prior to that successfully managing assets for the World Bank. That experience has been invaluable finding efficient solution to the regulatory hurdle issue.

Oct 31, 2012   16:53

Question for Eric: What are the local impacts of the projects in terms of employment & multiplier effects? Do investment opportunities include public (enterprise) projects? I ask this to find out how effective this tool is compared to e.g. altruistic donations or philanthropy organizations.

Oct 31, 2012   17:02

Response from Eric: Excellent question Marcus. The basic philosophy behind Homestrings is that incentives matter. By aligning investor interest, combined with socio-economic objectives and the incentives of the investee, we believe that the impact is optimal and sustainable. Many projects on Homestrings are "expansion finance" projects from both the private and public sector. Indications are that the financing received from Homestrings and other sources increase employment, infrastructure and expands economic activity. We track these indicators at the macro level by providing access to IMF, IFC, World Bank and Central Bank reports in cases where investments are made via funds- we publish the impact report they produce.

Oct 31, 2012   16:45

Question for Eric: Have you considered adding a component for diaspora members to donate to local development projects, not necessarily as investors?

Oct 31, 2012   16:48

Response from Eric: Thanks for the question Allen. No, we have not added a "Donation" module as we think that other platforms do this better than we can and are set up to do. We are looking at launching Homestrings Foundation at some point in the future but would most likely work with one of those platforms.

Oct 31, 2012   16:34

Question to Molly: I understand that on Africa rural connect there are no financial transactions per se but are there any transparency and credibility mechanisms such as the ones on homestrings? or is it completely open to upload any kind of ideas?

Oct 31, 2012   16:43

Response from Molly:That's correct, as Eric mentioned, online international financial transactions can be highly complex for a nonprofit to undertake on its own. Africa Rural Connect is an open platform so what you see is essentially what people share about their ideas. If someone wants more information about a particular idea or its progress, s/he can create a profile on the site and simply ask about it via a comment on the idea or by creating a remix. Or, there is also a private messaging feature so that people can ask questions of each other as well. We do monitor the site for spam postings or those that are inappropriate and take action to keep the platform focused on its current themes.

Oct 26, 2012   15:07

Question to Molly: do you happen to work or come across disabled population or organizations? would you please describe your experience.
Question to Eric: How does Homestrings provide technical assistance to diaspora organizations, organizations with ideas but with weak capacity?

Oct 31, 2012   16:51

Response from Eric: Good question Jeannette. Currently we are working with private equity funds who, in the context of an investment, provide capacity building to SMEs in which they invest. But Homestrings is not set up to provide capacity building on its own.

Oct 26, 2012   15:10

Response from Molly: We have not come across organizations that self-identify as working with disable populations, however, our partners at the Peace Corps Agency do have sectors of volunteers who are deaf and provide development assistance to deaf volunteers in Kenya.

In response to the other question about weak capacity, Africa Rural Connect is essentially a tool for organizations with a weak capacity to use to build up their infrastructure and obtain mentorship and advice from others on the platform community. It could be considered the pre-investment online incubator of ideas.