Principles for the financing of innovative African projects
1. farip considers “innovation” to be any new idea, be it technical, organisational, financial or commercial, as well as innovations for the commercial expansion of a functioning project. People in rural areas should be the main beneficiaries of the hoped-for success.
2. farip does not “support” African entrepreneurs, but “invests” in the expansion of their skills and capacity. farip behaves towards them like an investor, not like an aid agency. However, it is important to note that any investment by farip clearly serves the public interest of increasing rural incomes. In doing so, farip will work with entrepreneurs who can only try out their visions on a small scale thanks to farip’s commitment.
3. farip only invests in ideas that have not yet been implemented. It may also be that an idea already works elsewhere, but has not yet been demonstrated in the countryside. Or, if an idea has been proven to work in rural areas, but not yet on a scale that would be commercially viable, then trying to scale it up to a viable size is also an acceptable innovation.
4. farip assumes that up to 70% of the projects in which it invests will fail. The intention is that farip will remain open to innovative ideas that may seem very risky or unusual at first glance. The reason for this targeted high failure rate is a conscious attempt to break through the typically very conservative attitude of many established investors, including “social” investors, who almost always only want to invest in extensively tested projects. farip wants to be the bridge from interesting and as yet unexplored ideas of Africans to reliable business plans for new start-ups whose figures are based on concrete implementation pilots.
5. farip starts by exploring an idea with its initiators until it becomes clear how the idea should be implemented. Then farip thoroughly investigates the effect that the success of such an idea could have on poverty reduction, social development, the environment and income generation in rural communities. Only then does farip decide whether to fund initial experiments that test the idea in concrete terms. The usefulness of a project is then constantly further investigated with the African initiators.
6. farip has its own methods of closely monitoring the progress of a project, e.g. with trusted people on the ground, combined with telepresence via social media (especially photography via WhatsApp and films via YouTube). Easy-to-transmit formats for the adapted accounts allow the financial situation of each project to be monitored at regular short intervals, no matter how remote its location.