MITOS Introduction and Background

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1 MITOS Introduction and Background Published by:

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3 Table of Contents Acronyms 2 1 Introduction 3 2 Background: Migration and Development 4 3 Specific considerations when linking migration and private sector development 7 4 The process of using the tools 10 5 A summary of the tools for easier selection 11 6 Bibliographic references and further reading 14 1

4 Short clarification of terms used: u A Migrant is any person who lives temporarily or permanently outside of his or her country of origin (CoO), and has acquired some significant social ties in the country of residence or destination (CoD). Internal migration is not the focus of MITOS. u Diaspora is the term that denotes a non-homogeneous group of people who maintains a close relationship with its country of origin. Acronyms BDS BMZ CoO CoD CSO DC F2F GIZ GO HTA ICT MFI MIS MITOS MoU NGO ODA PSD SME TA Business Development Services German Federal Ministry for Economic Cooperation and Development Country of origin Country of residence or destination Civil society organization Development Cooperation Face to face Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH Governmental Organization Home town association Information and communication technologies Microfinance institutions Management Information Systems Migration Tools Options for Sustainability Memorandum of Understanding Non-governmental organisation Official development assistance Private Sector Development Small and medium enterprises Technical assistance 2

5 1 Introduction u You work in a technical cooperation programme, in a chamber of commerce, in business development services, a relevant government agency, or in a national SME promotion programme? u The programme is related to sustainable economic development? u It is located in a region where migration is relevant? u You look for innovative and practical tools for engaging the Diaspora in private sector development? u You are interested in migration and development? If some of these questions are relevant to you, then MITOS might be helpful for you! Be invited to read and feel free to use! MITOS is directed towards: u National and international experts in DC projects u Institutions both public and private that cooperate with migrants or their communities u Institutions working in the field of private sector development (chambers, investment promotion centres etc.) u Other donors or implementing organizations in international DC MITOS offers a set of tools that help leveraging the potential of migration for private sector development and provide complementary options for programmes aiming at sustainable economic development, in particular promotion of trade, innovation, start-ups and investments. Moreover, it also addresses programmes in: u Rural development u Vocational education u Financial systems development u Information and communication technology and economy u Economic reform MITOS proposes activities in the context of migration and private sector development. It aims at making use of the special potentials arising from competences and resources of migrants leading to business initiatives and a contribution to achieving the Millennium Development Goals: u Reduce poverty and hunger u Gender equality u Global partnership In brief, this publication describes: what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 3

6 what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 2 Background: Migration and Development Most migrants both internal and international benefit in the country (or region) of destination (CoD) from better opportunities, higher incomes, better access to education and health, and improved prospects for their children. Surveys about migration report that most migrants are satisfied in their CoD, despite the adjustments and obstacles typically involved in moving. 1. Even if they do not plan to return they usually want to maintain their social networks in their countries of origin. Some facts and figures may illustrate the tremendous potential and importance of migrants for private sector development: u Since 1970, the number of people living outside their countries of origin as international migrants increased from 82 to 200 million u There is gender balance amongst migrants (male-female ratio is about 50:50 migration is not any longer an exclusively male phenomenon) u About 1/3 of migrants live and work in industrialised countries u About 740 million people are internal migrants 2 u Remittances from migrants to their countries of origin accounted for 328 billion USD in , amounting to more than three times ODA 1 UNDP: Human Development Report 2009; Overcoming barriers: Human mobility and development. ISBN p.2. 2 Ibid; p.1. 3 World Bank: Migration and Development Brief 10. p.1. u The Philippines for example received 16.3 billion USD remittances, i.e. 185 USD per capita compared to 7 USD of ODA per capita (2007) u Countries also change migration patterns. Spain turned from a net recipient of 1 billion EUR in 1990 to a net sender of remittances of 1.3 billion EUR in 2006 u The phenomenal knowledge-based development of India was significantly driven by the influence of migrants 4 u About 20% of equity of SME in urban Mexico originates from remittances u Germany hosts 364,000 foreign entrepreneurs (2005). The rate of business creators among migrants in Germany is higher than that amongst native Germans u 19% of Germany s population in 2008 had a migration background Migrants are free to decide how to use their incomes and savings. Predominantly, remittances are spent for consumptive purposes, education, health, technical equipment and housing. This impacts on the domestic economy unless imported goods are being purchased, which does not contribute to domestic growth. Additional financial and human resources acquired by migrants and their families offer additional development potential if used in a productive and sustainable way. MITOS offers tools 4 Aggarwal, Alok et al.: India s Transformation to Knowledgebased Economy Evolving Role of the Indian Diaspora, 2004, Evalueserve, Washington D.C. 4

7 to support migrants and their families (or other recipients of remittances for examples) in tapping into this potential successfully. Migration induces flows of labour, money, goods, know-how and ideas that can be visualized as follows: Culture Goods Country of origin Culture Know-how Knowhow Goods Migrants Ideas These flows offer challenging potentials for private sector development. Migrants who despite being scattered all over the world (the Greek word Diaspora literally means dispersal) have never lost their ties to their CoO can be interesting partners for development cooperation. They offer specific know-how, skills and resources which can be explored for leveraging private sector development, e.g.: u Technical and professional know-how Host country Money u Accumulated capital or constant savings Money Ideas u Market knowledge about and contacts in their countries of origin and destination u Social networks in the countries of origin and destination u Organisation in Diaspora communities, representing potential partners for economic initiatives Values Values u Familiarity with language and culture on both sides u Personal contacts, facilitating risk management u Exposure to ideas that are innovative in the countries of origin or destination u Experience with entrepreneurship and business management u Diaspora organisations, representing potential partners for development initiatives Actors from the realms of development cooperation, politics and society are increasingly becoming aware of this setting. German Development Cooperation has recognised the potential represented by migrants, and aims to help scaling up the positive effects of migration. At the same time, it is working to mitigate negative impacts of migration on the development of the countries of origin. The Federal Ministry for Economic Cooperation and Development (BMZ) has thus commissioned GIZ to implement a project on Migration and Development. It provides specific knowledge, information, concepts and tools with the objective to support cooperation programmes in effectively integrating migration into their result chain and activity lines. The project accumulates, generalizes and provides specific know-how about chances, approaches and good practices in leveraging migration for economic development. This could facilitate complementary initiatives in the framework of existing projects, for example: u Support to improvement of investment climate u Small and medium enterprise strategies and promotion u Private sector development initiatives u Cluster and value chain strengthening u Business development services and market for the poor (M4P) approaches 5

8 u Trade, export and technology transfer promotion u Facilitation of access to finance With MITOS, the Migration and Development Project offers a tool box with options for interventions that are: u Relevant for economic development impulses by accessing the potential of migration u Easy to apply u Relatively low-cost for the interested programme u (in most cases) easy to implement through local structures u Sustainable after a relatively short period of time For more information about various aspects of Migration and Development, please refer to or contact migration@giz.de 6

9 what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 3 Specific considerations when linking migration and private sector development Migration is not a homogeneous phenomenon. The summary given below shows special aspects, potentials, risks and typical obstacles that need to be considered when planning and implementing initiatives with migrants: u In some countries, migrants are recruited as unskilled cheap labour. In others, high skills are even a precondition for work permits. Accordingly, interventions have to address the specific characteristics of the target group. u Migrants may live under legal or illegal conditions, the latter reducing mobility as well as communication ability and formal remittance opportunities. u Most migrants intend to stay abroad only shortterm, planning to accumulate savings for a better life. These migrants may be looking for assistance to make the best and most sustainable use of their assets. Many stay abroad for a working lifetime and look for ways of achieving longdistance engagement at home. u Special markets emerge in the context of migration, be it in the CoO, in the CoD or transnationally. u Very often, migrants from one country or region concentrate in one area in the CoD, forming associations and facilitating interventions. u An above average proportion of migrants run enterprises in the CoD. Nevertheless, the vast majority are dependant labour force. Entrepreneurial competence must be looked for specifically, when it represents the focus of a planned intervention. u Some migrants prefer investing on their own, others build partnerships with their relatives or simply give them capital for investment. u Accumulated capital could be allocated for a larger investment. However, in many cases, continuous savings are remitted regularly and could serve as cash flow or credit guarantee. 7

10 What are migrant-specific advantages and phenomena? How to explore them? Skills level related International migrants do not primarily belong to lowest income groups because the latter are usually not in the position to finance the initial migration costs. Migrants often belong to a wealthier class, and have better qualifications. Promotion of knowledge-based businesses or value chains. Migrants are exposed to new culture, language, markets, technology. This could result in increased innovation and competiveness of economies in CoO. Purchasing power in CoO increases with remittances received from migrants. New demand may not (yet) be expected by local markets. Remittances are often stable over a long time and result in (potential for) savings. Remittances are often used to compensate initial migration costs. It is only after the amortisation of migration costs, that migrants start thinking about entrepreneurial activities. Returning migrants bring along savings and plan to invest in businesses. They might not know how to proceed and face high risks of losing money. Migrants abroad have a considerable demand for nostalgic products. Migrants also look for specific goods and services when visiting their CoO. Migrants are travelling regularly into their CoO. Trade between sending and receiving countries significantly increases as a consequence of migration. Accumulated savings or permanent remittances Special migrant markets Knowledge assets can be used beyond individual business activities for programmes of sustainable economic development at national level or within international TA projects. This offers opportunities for innovative market ideas in CoO. Both aspects facilitate access to credit for remittances recipients in the CoO. Engineering companies could address special migrant needs: construction in absence of the building contractor. Business start-up focus rather on returnees. Strong need for entrepreneurial achievement. Information and training can help them to be better prepared and to secure their assets in a sustainable way. This offers specific opportunities for trade businesses in the CoD. This offers specific opportunities for businesses in the CoO. This offers specific opportunities for the tourism business in both, the CoD and CoO. Trade promotion can specifically focus on migrants and migration-related products or services ( nostalgic products ). Family background, regional concentration and self-organization Migration from a certain place in the CoO often concentrates in specific regions in the CoD, where migrants often found associations (formal or informal). Most business investments are realised within the family. Entrepreneurial competence This facilitates the offer of tools to a group of people. It also brings up options to cooperate with migrant associations as partners for project interventions. Interventions should address families million migrants are entrepreneurs in the CoD. This competence can be used for mentoring or joint ventures. Returning migrants cannot always find employment at home. Their competence can be used to encourage selfemployment and business creation in CoO. 8

11 At the same time, risks have to be taken into account when working with migrants: Risks Information about the local specificities of migration, migrants, remittances are usually not available for projects when starting an intervention. Information about existing programmes and available service providers for PSD is usually also lacking. Transfer costs for remittances are high, especially for irregular migrants who do not have access to formal financial structures and often use middle men or informal transfer channels. The separation of potential investors or silent shareholders (migrants) from the business in the CoO increases risk aversion. Migration might lead to feelings of personal and cultural alienation. Migrants lose touch with present developments and changes in the origin country. They perpetuate their memories. Migrants who are entrepreneurs abroad are not necessarily interested in running businesses in the CoO. Others might lack personal entrepreneurial skills to start a business but dream of doing so. This increases risk of failure. Exchange of contacts and ideas are usually not structured. Migrants leave assets unused back home. Potential investors (migrants) might lack information, contacts and time. Possible way of risk mitigation A baseline survey would help identify the most suitable interventions and to assess impact later on. A survey would facilitate implementation, use of synergies and later sustainability. The survey might be tool-specific. In some PSD programmes promotion of financial services is included and might be used to address the problem. It might be useful to involve microfinance institutions in remittances transfers. Business planning should include better communication and monitoring tools. Interventions should address dialogue between migrant communities and encourage joint participation of migrants and people at home. Information seminars or platforms can compensate the lack of up to date information and motivate migrants to become more involved (again). Migrants could become involved as silent shareholders or mentors. Business planning must address this. Good training provides guidance for self-assessment. Self-assessment could also be established with the help of a pre-checklist. IT platforms could facilitate exchanges. PSD programmes could offer to take care of or even use these assets for income generation. A specialised business service provider could fill this information gap. 9

12 what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 4 The process of using the tools The MITOS tools are designed in a way that facilitates their usage. They are offered to a huge variety of DC programmes in very diverse countries. Their presentation here provides basic information for assessing their suitability in a given programme context and for selecting a (set of) tool(s). Within a DC programme, it is advisable to plan and implement a migration and economic development initiative with suitable partner organisations such as: chambers, investment agencies, Business Development Service (BDS) providers. These institutions might need orientation about migrant-specific approaches or the usage of tools. According to a preparatory analysis of the migration phenomena in the project area, advantages as well as risks must be considered in a promotion scheme. The tool-kit also addresses national BDS providers and SME promotion initiatives and is supposed to complete their service offer by addressing new migrants or great numbers of returnees. Contact and dialogue with the GIZ Sector Project Migration and Development might be required and the tool(s) will need adaptation, sometimes external expertise. The Sector Project Migration and Development welcomes your enquiries and is ready to advise you in using the tools. Process steps are: Clarification Orientation Pre-selection Funding Dialogue Planning Expertise Realisation Reporting u is migration relevant for your programme context (country relevance, policy focus, programme objectives)? u use tool overview for identifying suitable interventions u assess description of identified tools for selection u check sufficient resources in your budget u contact Migration and Development and discuss your plans u prepare your own implementation plan u assign external expertise in cases where tools or you require it u implement the tool u Migration and Development would highly appreciate your feedback to disseminate experiences 10

13 what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 5 A summary of the tools for easier selection This overview of the MITOS toolbox shall facilitate the choice of the most suitable tools by offering a range of criteria: u Type: u Costs: u Complexity: u Expertise: u Place: (B) Business creation, (I) Investment services, (M) Matching function (Diaspora CoO), (T) Trade, (W) Web-based tools, (X) Innovation and technology transfer. vary from $ (very low) to $$$$$ (very high). Costs depend on factors like the number of applications wanted or costs for services in a country. Costs for international experts are not included. varies from M (easy to apply) to MMMMM (very demanding) refers to international experts required to transfer knowledge in tool utilization or capacity development. It ranges from ( ) (empty, none required), over (short but recommended) to (several weeks and absolutely necessary). The costs for expertise are not included under costs. Some projects may find it difficult to support activities outside their defined regions. MITOS facilitates selection by applying the following categories: Global: the tool can be used independently from user residence. CoO: the tool addresses people in CoO and will be applied there. CoD: the tool addresses migrants in their CoD. Both: the tool can be applied both in CoO or CoD. All tools are also made available as single files, which can be downloaded, from the GIZ Migration and Development website: The table under chapter 5 shows all tools and provides links to directly access the Internet. The GIZ Sector Project Migration and Development and MITOS appreciate any kind of u comments about this introduction and orientation paper u proposal of new tools u feedback about application experiences Based on feedback from programmes applying them, the tools will be continuously updated. 11

14 MITOS tools overview Tool Description 01. Migrant Opportunities Website Website specifically made to publish business opportunities for migrants and to discuss ideas, problems and solutions. People can choose suitable ideas and use them for business planning and management. 02. KIVA for migrants Interactive web-based platform, offering potential or existing entrepreneurs in the CoO a possibility to post their projects (start-up or other projects) and therewith related needs (financial and know-how) and to link them with members of the Diaspora who are interested in supporting their CoO. 03. Migrant Assets Custodian Service 04. Migrant Innovation Treasury 05. Cash Flow Management 06. Idea Generation for Migrant Investment Opportunities Some migrants leave property behind when they leave (land, assets, money). They can commission a custodian (organization) to maintain the assets in the town of origin and use them for CoO business activities. The treasury encourages young people (both in CoO and the Diaspora) to develop innovative, migration-related product or service ideas and get a prototype realised. A fund is raised to enable prototype development, including migrants as funders. Likewise, migrant entrepreneurs can be rewarded and their example disseminated. Improve productive utilization of remittances by training recipients to better use and monitor cash, prepare for risk, and accumulate funds. Training and practical application of idea generation for migrant entrepreneurs, related to opportunities and risks of migration background. Analysis and selection of most appropriate ideas for further business plan development (next tool). 07. Business Creation Using specific advantages and taking into account problems arising from a migration background for business plan development. Also includes: long distance communication. Builds on tools 5 and Online Business Plan Coached online service and programme, enabling interested migrants or families in CoO to develop business plans. Enables tripartite communication coach-migrant- CoO. Involves training elements. For advanced target group. 09. Import-Export Services Training 10. Trade promotion agency manual 11. One Stop Shop Migrant Investment Service Facilitates import and export activities of migrants families and local business partners between CoO and CoD, by encouraging and qualifying small to medium trade service providers. Raises awareness among staff of trade promotion organizations and programmes about potentials and obstacles of migrants to stimulate new markets. Facilitates to deliver better advice. Strengthening local BDS in providing investment services to migrants who want to invest in CoO. 12. Migrant Market Place A place for potential partners to get to know each other, also known as business wheel. Detailed and structured information on why investments make sense in their CoO. The information kit will be delivered via info workshops (face-to-face, selective dissemination via YouTube) in the CoD. 13. Mentoring Competence-building among migrants to use their specific knowledge and support business activities in their CoO as mentors ( Business Angels ). Includes communication and mentoring at long distance. Refers specifically to migrants who have retired but want to share their expertise. 14. Partnerpreneurship development 15. Virtual World for Migrants Training for joint ventures between migrants and CoO partners, covering business contract, role division, controlling and reporting, communication. Access and use Virtual World platform for Migrants with emphasis on information sharing between CoD officials, DC agencies and migrants, and support and collaboration between migrants. 16. MyMobileMag Using mobile phones as communication tool for providing migrants with crucial information via a mobile magazine platform. 12

15 Output Type Costs Complexity Expertise Place website B/I/M/W/X $$$$ MM global web-based platform for a grant system and knowledge-transfer B/I/M/W $$$ MMMMM global manual of procedures for lawyers I/M $$$$$ MMM CoO challenge fund B/I/X $$$$$ MM both training course B/I/M $$ MM CoO workshop B/I/M $ M CoO training course B/M $$ MMM CoO software B/I/M/W $$$ MM global training course M/T $$ MM CoO manual M/T $ M CoO training course B/I/M $$ MMMM CoO workshop B/I/M/T/X $$$$ MMM CoO training course and database B/I/M/T/ W/X $$$$ MMMM both training course I/M/T $$$$$ MMMM both web space, training, online service M/T/W/X $$$$$ MMMM global communication system B/I/M/T/X $$ MM both 13

16 what is migration about? what is specific for PSD projects? how can the MITOS tools be used? overview for tool selection the tools 6 Bibliographic references and further reading Aggarwal, Alok et al. (2004): India s Transformation to Knowledge-based Economy Evolving Role the Indian Diaspora. Washington D.C. Online: docs/library/152386/abhishek.pdf. Cohen, Robin ( ): The International Library of Studies on Migration. Economic and Social Research Council. No Swindon. EC-UN: Migration for Development Handbook. Brussels. Online: org/handbook/en/. GIZ (2009): Cooperating with Diaspora Communities Guidelines for Practice. Frankfurt. GIZ (2009): The Ethiopian Diaspora in Germany. Frankfurt. Instraw (2009): Global perspectives on the social organization of care in times of crisis: Assessing the situation. Santo Domingo. IOM: IOM and Remittances Definition, Scale and Importance of Remittances. Online: bookstore/free/iom_remittance_en.pdf. Koslowski, Rey; Martin, Philip L.; Russell, Sharon Stanton (2008): International Migration Review. United Kingdom. Online: asp?ref= Kutneszov, Yevgeny (2006): Diaspora and the International Migration of Skills. World Bank Institutee. Washington D.C. Lowell, Lindsay B.; Gerova, Stefka G. (2004): Diasporas and economic development: State of knowledge. Georgetown Institute. Georgetown. 14

17 Lucas, Robert E.B. (2005): International Migration Regimes and Economic Development, Boston University, Boston. Online: meetings/thirdcoord2004/p22_annexiii.pdf. OECD, IOM & ILO (2006): Handbook on Establishing Effective Labour Migration Polices in Countries of Origin and Destination, Vienna/Geneva Özden, Ç.; M. Schiff (eds.) (2006): International Migration, Remittances and the Brain Drain. World Bank Institutee. Washington D:C. Online: investigaciones/2006/estudios/migracion/ inter_migration_remittances.pdf. Pedro J. Oiarzabal and Andoni Alonso (2010): Diasporas in the New Media Age: Identity, Politics, and Community ; University of Nevada Press SAMP (2006): Migration and Development in Africa: an Overview. Cape Town. Skeldon, R. (2008): International migration as a tool in development policy: a passing phase? Population and Development Review. No. 34(1). p Bangkok. The World Bank Institute (2009): Development Indicators Washington D.C. The World Bank Institute (2009): Migration and Development Brief: Outlook for Remittance Flows Washington D.C. Online: worldbank.org/intprospects/ Resources/ / Migration&DevelopmentBrief10.pdf. UNDP (2009): Human Development Report 2009 Overcoming barriers: Human mobility and development. New York. For further information, please refer to: Migration and Development, GIZ 15

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20 Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Project Migration and Development Registered offices Bonn and Eschborn, Germany Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg Bonn/Germany Eschborn/Germany Phone: Phone: Fax: Fax: migration@giz.de Authors CEFE International and the global network of CEFE trainers Design andreas korn visuelle kommunikation, Bad Homburg Printed by Aksoy Print & Projektmanagement, Eppelheim Printed on FSC-certified paper Photographs Front cover: GIZ/Markus Kirchgessner As at July 2012 GIZ is responsible for the content of this publication. On behalf of Federal Ministry for Economic Cooperation and Development, Division Federal government/states/local authorities; migration and employment; returning experts; export credit and investment guarantees Addresses of the BMZ offices BMZ Bonn BMZ Berlin Dahlmannstraße 4 Stresemannstraße Bonn/Germany Berlin/Germany Phone: Phone: Fax: Fax: poststelle@bmz.bund.de

21 MITOS Tool 1 Migrant Opportunities Website Published by:

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23 MITOS Tool 1 Migrant Opportunities Website Exchange ideas start and grow your business! 1 Tool: This is a web-based migrant membership tool that allows migrants to identify business investment opportunities in their respective CoO. It responds to the migrants need for general but more up to date information on business opportunities. It also allows for ideas and opportunities of existing businesses online, both in the CoO and CoD. 2 Objectives: This tool will enable migrants to: u Gain relevant and timely investment information that their counterparts in their respective CoO can use for income generation u Share what they need in the CoD u For remittance recipients to suggest and rank possible investment areas for income generation u For existing enterprises to discuss potential and problems, and to find solutions by online dialogue 3 Target groups: u CoD: Migrants with investible funds and needs for origin country products or services for both emerging and existing enterprises u CoO: Migrants relatives and social networks (e.g., friends, former partners, school mates, etc.) that are entrepreneurially inclined. Other target groups are institutions and business support groups. It is highly probable that this tool could likewise inspire young would-be entrepreneurs and investors. 4 Problems and potentials of migrants addressed by this tool: Migrants who succeeded in their respective CoD might one day yearn to invest (or contribute) in income-generating ideas for their relatives and other possible business partners in their respective CoO. However, when the right moment to invest comes, migrants often rely on hearsays, rumours, out-dated and often inadequate investment information. There is a need to verify the opportunities. To do so, migrants rely on inexpensive (and often unreliable! e.g. word of mouth, old embassy newspapers and trade information, etc.) and expensive (e.g. investment consultants, travel to the place and check with key informants, etc.) means. Lack of reliable and up-to-date business information is one of the barriers that restrict the volume and speed of remittance flows from consumptive to business purposes. The Internet is increasingly being used by migrants (or their children) to communicate and obtain information from their CoO. Recently, social networking tools like Facebook, MySpace, Twitter and others provide platforms where individuals or groups can communicate, discuss, and even cocreate enterprises. This is yet another tool that uses the power and influence of social networking. 5 Description: This tool offers an online investment marketplace for migrants. A migrant can visit the site and see a list of possible investment opportunities suggested by institutions, groups or individuals back in the CoO. The list will contain a brief description and suggest areas where they can be established. In the beginning, seed opportunities will be collected 1

24 from existing lists, records or opportunity scanning workshops and conference proceedings. When the site membership enlarges, more opportunities will be solicited from site members and visitors. Migrants who become familiar with the site can likewise post needs for special products or services needed from their respective CoO. In addition to suggesting opportunities, site members may also rank the published opportunities based on criteria such as: market potentials, startup time, employment, profitability and others. The monthly top three-ranked opportunities will be featured in the site together with more detailed information. The site will likewise provide a list of resources (reading materials, other background information and internet links), persons and institutions that may be able to help in developing the ideas. The tool could consist of the following elements: The Opportunities Blog will provide a continuing list of business opportunities that could be of interest to the site users. Each opportunity could be presented in the following formats: (a) title, (b) brief description, (c) start-up investment required, (d) location possibilities, and (e) comments. The opportunities will be presented as from CoO (completed by migrant counterparts) and from CoD (completed by migrants). An example of an entry can be found in Annex 1. Investment News and Events will consist information about trainings, livelihood investment promotion, trade and exhibition fairs, conferences of interest to investors and migrants. Site Services will show the additional services such as: ranking of opportunities, comments, chat, and migrant investment forum. Links will list the relevant links to institutional sites of relevance to the origin country, migrants, investments, business news, etc. About Us which describes the intent and background of the sponsoring institutions. Activities: This tool envisions the following activities: Developing the site. This would include: (a) laying out the site architecture; (b) choice of platform (see Annex 2 for a list); (c) customization of opportunities page, forum and chat; and (d) site testing. A local website developer may be hired for this activity (duration: 3 days). Listing the initial opportunities. This activity would collect business and livelihood opportunities (e.g., food processing, handicrafts, art and fashion wares, provision stores, services like barber shops, specialized clinics, parking spaces, etc.) in the origin country that may be started on very small scale operations. This initial list is merely the seeds that can grow and stimulate the site members (and visitors) to suggest additional opportunities once the site is mounted. The initial list can come from government institutions and from key informants in the local economic development (LED) agencies and projects. Likewise they can come from LED initiatives and Public-Private Partnership Dialogues. Staff of counterpart institutions may be able to do this even during office time (duration: 10 days). Training for content makers. This is an optional course for the staff of the counterpart institutions and others who can share additional opportunities and operate site maintenance. The course will provide how to: (a) use web 2.0 and social networks; (b) use and interact with the website; (c) update, edit and add content; (d) use the blog, forum and chat features; and (e) perform simple site maintenance tasks. Depending on the site language, a local or 2

25 foreign content making specialist may be hired to do the training (duration: 2 days). Administration and content updating. The counterpart institution s web staff will update the content weekly, including: (a) addition of new business opportunities; (b) investment news; (c) forum summary; and (d) management oversight. In addition, other staff with the participating institutions may likewise be invited and become site coordinators. (Duration: 2 Days per month). Site promotion. The site will be promoted in the relevant governmental and non-governmental institutions, chambers of commerce, trade and exhibition organisations, fair trade promoters, banks and microfinance and remittance handling institutions, foreign workers and migrant associations, and other professional organizations via posters and radio. The marketing shall expand the membership base by encouraging members to pass the site information to their personal networks and business groups. The site promotion may be implemented by the counterpart institution itself or a hired events management team (duration: 25 days). 6 Prerequisites: Counterpart institution. Co-sponsorship or partnership of a government entity can add credibility to the site. In turn, the counterpart institution can adopt a new way of using social networking for service provision and information dissemination. Ideally, the counterpart for this tool should have an underutilized internet server with one staff able to use social networks on the institution s website. Some possible candidates are: (a) the Ministry of Local Government; (b) Ministry of Trade and Industry; and (c) Private Business Serving Organizations (e.g., chambers of commerce, trade and exhibitions organizations, fair trade promoters, foreign workers and migrant associations, banks and money transfer operators as well as other professional associations). 7 Particularities and/or difficulties: Particularities. The migrant opportunities site is a low effort project with potentially high impact compared to the operating and maintenance costs. Major investment is limited to the membership campaign in the CoO. This is particularly interesting for the young would-be CoO entrepreneurs in search for business opportunities and potential co-investors (as will be discussed in succeeding tools). Advert solicitation and sponsorship may be pursued later to ensure long term sustainability. If desired, some (non-financial) incentives may be offered as prizes to the highest number of opportunities suggested or the best-ranked investment ideas. 8 Costs: Costs can vary significantly from country to country. Rough estimates are shown below: Items Days US$ Cost/ Unit Total Cost Developing the site Listing the initial ,000 opportunities Training for content ,600 makers Administration and ,800 content updating Site promotion ,500 Prizes Total 16,800 9 Dissemination: The internet has many sites that share general business opportunities. This site will have three distinct advantages: (a) it is for and by migrants and their counterparts; (b) can be directed to a region, province or town specific migrant groups originate from; and (c) more relevant and up-to-date business information. Note that to achieve a notable marketing effect, the site should collect at least 100 3

26 members who can use or feed the site with investment opportunities and rank them. 10 Links to other MITOS tools: MITOS Tool 02: Kiva for Migrants Prepared by: Dr. Eduardo Canela, CEFE International MITOS Tool 03: Migrant Asset Custodian Services (MACS) MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 10: Trade Promotion Agency Manual MITOS Tool 12: Migrant Market Place MITOS Tool 15: Virtual World for Migrants 3D Collaboration 4

27 Annex 1: Example for an Opportunity Entry Wood handicrafts from the small town of Tukuyu in Utopia seeking migrant investors and importers. These are beautiful items that could adorn living spaces and inspire both your families and visitors abroad. Tukuyu is a small town with a few woodcrafters that have changed the lives from rural, unemployed artisans. The handicrafts are very popular as corporate gift items. Their prices go up to 20 EUR a piece depending on the design. Tukuyu is now stressing heavily on the marketing of their products particularly to Utopians living in Europe and the US. The items will bring your origin country to your present country. The group of artisans is assisted by the INGO Project and has recently bagged an order of 1,200 wood decorative handcrafted pieces from the US. Marketing is crucial in Utopia. You will find many people who do beautiful things, but it does not sell. This is because they don t know how to sell them. Investment Parameters: Utopian migrants can order 1,200 pieces for only 2500 EUR plus shipping costs. They can also help us employ one more artisan by buying the equipment needed, a donation of 120 EUR would suffice. Contact: Mr. Anyname Anonimous Block 32, Lot 58 Anywhere Street, Tukuyu, Republic of Utopia Posted by: Investment ranking: 5

28 Annex 2: Alternative Social Networking Platforms Blogger ( Very popular. Cloob ( Popular in Iran Facebook ( Very popular, but not (fully) accessible everywhere Flickr ( Photo sharing, commenting, photography related networking, worldwide Fotolog ( Popular in South America and Spain hi5 ( Popular in India, Portugal, Mongolia, Thailand, Romania, Jamaica, Central Africa and Latin America italki.com ( Language learning social network languages kaioo ( Non-profit Kiwibox ( Micro-finance access LinkedIn ( General but mainly business LiveJournal ( Blogging Livemocha ( Dynamic online language learning online courses in 22 languages world s largest community of native language speakers. Multiply ( Real world relationships. Popular in Asia, My Opera Community ( MySpace ( Netlog ( General. Popular in Europe, Turkey, the Arab World and Canada s Québec province. NGO Post ( Non-Profit news sharing and networking, mainly in India 6

29 Ning ( Users create their own social websites and social networks Odnoklassniki ( Popular in Russia and Soviet republics, Orkut ( Google login. Popular in Brazil and India. PartnerUp ( Networking site for entrepreneurs Passportstamp ( Travel Picassa ( a photo blogging site Plaxo ( Aggregator Plurk ( Micro-blogging, RSS, updates Qapacity ( A businessoriented networking and directory site Sonico.com ( Popular in Latin America, Spanish and Portuguese Tumblr ( General. Micro-blogging, RSS Twitter ( Micro-blogging, RSS, updates Vox ( Blogging WAYN ( Travel and lifestyle Windows Live Spaces ( Word Press ( Xanga ( Blogs and metro areas XING ( Business (primarily Europe (Germany, Austria, Switzerland) and China) YouTube ( SocialGO ( A social network builder 7

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32 Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Project Migration and Development Registered offices Bonn and Eschborn, Germany Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg Bonn/Germany Eschborn/Germany Phone: Phone: Fax: Fax: migration@giz.de Authors CEFE International and the global network of CEFE trainers Design andreas korn visuelle kommunikation, Bad Homburg Printed by Aksoy Print & Projektmanagement, Eppelheim Printed on FSC-certified paper Photographs Front cover: GIZ/Markus Kirchgessner As at July 2012 GIZ is responsible for the content of this publication. On behalf of Federal Ministry for Economic Cooperation and Development, Division Federal government/states/local authorities; migration and employment; returning experts; export credit and investment guarantees Addresses of the BMZ offices BMZ Bonn BMZ Berlin Dahlmannstraße 4 Stresemannstraße Bonn/Germany Berlin/Germany Phone: Phone: Fax: Fax: poststelle@bmz.bund.de

33 MITOS Tool 2 Kiva for Migrants Published by:

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35 MITOS Tool 2 Kiva for Migrants Find sponsors for shared funding of your business idea 1 Tool: Accumulation and provision of financial resources from migrants for the funding of start-ups or for business growth. 2 Objectives: This tool will: u Facilitate the establishment of a localized and migrant-focused kiva 5 -like web platform to increase the SME s access to cheap refinancing sources in the countries of origin u Allow migrants to provide credit to SMEs of their choice u Initiate an effective learning partnership with the project s intermediary and referral partners u Empower the partners to learn more about the SME credit behaviour (demand side) and ways to tap migrants as funding source (supply side) u Allow partners to expand their use of internet technologies in loan disbursements and administration for SMEs 3 Target groups: CoD: Migrants disposing of investible funds and interest in the development of the origin country. They can either be: individuals, relatives, formal or informal migrant associations and federations. CoO: Ultimate target groups: existing SMEs, livelihood producers, cooperatives, social enterprises who are interested in growing their respective enterprises. 5 Virtual network to provide and/or receive small loans; refer to (kiva originally refers to a meeting- and ceremonies room of so-called pueblo cultures (Native Americans from North America). In-between your project/institution and the SMEs there are secondary targets: (a) intermediary partners (e.g., microfinance institutions (MFI), remittance centres, money transfer operators like Western Union, MoneyGram and other financial institutions); and (b) referral partners (e.g., large banks, chambers of commerce, vocational and technical training institutes, local government units, local NGOs, etc.). Other field partners are potential beneficiaries as well. 4 Problems and potentials of migrants addressed by this tool: u Pooling of smaller amounts of remittances into substantial funding for private sector investment u Bridging the gap between migrants willing to finance and people in CoO requiring funds u Offering lending or investment opportunities to migrants who do not want to become directly involved as entrepreneurs 5 Description: 5.1 Background: is a web 2.0-based social network, empowering people to lend to an entrepreneur across the globe. By combining microfinance with the internet, Kiva is creating a global community of people connected through lending. It allows potential borrowers to directly access credit lenders. Loans are relatively small and the borrowers are reached via microfinance institutes (MFIs) acting as Kiva s field partners. Every week, Kiva generates 3,000 lenders and serves 4,000 borrowers amounting to US$ 1.3 million with respectable repayment rates ranging from 98 to 99 percent. It serves one 1

36 loan every 14 seconds. A summary on how Kiva operates can be found in Annex 1. All lenders know how and when they can get their money back, see A Fistful of Dollar: The Story of a Kiva Loan video ( You get a sense of Kiva in motion by visiting its site 6 ( and check the most recent achievement statistics almost instantly. This tool is a Kiva mini version. It uses the same business model as Kiva but will particularly aim for migrants from a specific CoO (may also be for a town, province, district, etc. which is covered by your project) as lenders. It may not have the same outreach but it will likewise be as sustainable. Like Kiva, this tool will allow existing SME clients in the CoO to describe their loan demand for their future expansion and growth projects (or in some cases, search for potential business partners) in the web to attract the attention of migrant lenders, investors, etc. Lack of access to traditional financing sources remains one of the most pressing concerns of many SME, especially those at the bottom of the pyramid. Yet in the future, the demand for credit from this sector is expected to grow since: (a) the underserved credit market is expanding in most developing countries; (b) increasing global pressure to curtail if not eradicate poverty, and (c) rising interest in self-employment and entrepreneurship. On the supply side, portions of the migrant remittances can be channelled to productive instead of purely consumptive use if properly tapped. Migrants who succeeded in their respective countries of residence will one day in their life like to invest (or contribute) in income-generating ideas for their relatives or others (including searching for possible business partners) in their respective countries of origin. 6 Other Kiva like models with differing business models and targets likewise exist. These are: Acumen fund ( Global Giving ( and Zopa ( With this tool, potential SME borrowers can: (a) describe their needs for loans even in their own language, (b) submit to a participating intermediary partner who posts it on the internet site, (c) wait for migrant lenders (as in Kiva) until the money needed is raised, (d) the field partners monitor the loan applications and collect repayments until the loan is completely repaid. There are two ways to use this tool in your project/ institution. First (and this is the easiest and least time-demanding way), affiliate with Kiva. You can do this if you have an existing MFI component (say, with 1,000 or so borrowers) that is willing to be certified as a Kiva Field Partner. More information about Kiva Field Partnerships is available under Second (and this is the focus of this description), build a mini-kiva for migrants. 5.2 The tool: The web-based tool consists of the following elements: 1. Introductory Page. This will include descriptions of: site name, site owners, intentions, how the site operates, donation and payment modes (e.g., credit cards, Paypal ( Moneybookers ( contact details, sponsors list, intermediary and referral partners, real time stream of lenders and loans provided, etc. 2. Lenders Page. presents the lender s registration, lender s information (e.g., location, career, site experience, etc.), rules of lending, etc., lenders most frequently asked questions, facility for accepting donations and payments, featured lenders, etc. 3. Client Page. This will show the borrowers (e.g., name, family, business particulars, and present concerns), how much is needed and where the money will be used, featured borrowers, clients most frequently asked questions, and a real time 2