2008 Drishtipat Challenge: Call for Business Proposals

[rafiq]

Dear BC members: the Drishtipat Challenge is an annual program that encourages social entrepreneurship in Bangladesh. Please read the press release below and find more info at www.drishtipat.org/dpchallenge. Help spread the word and consider submitting your own proposal if you are engaged in a business that fits this model.

Feel free to ask questions or email to dpchallenge@drishtipat.org

Regards!

Rafiq

DRISHTIPAT LAUNCHES BUSINESS CHALLENGE

PRESS RELEASE

DHAKA, BANGLADESH, February 18, 2008 – Drishtipat, a volunteer nonprofit organization working on promoting human rights and social development in Bangladesh, today announced the launch of the Drishtipat Challenge 2008. Drishtipat believes that a robust economy is an essential factor in promoting human rights and social development. Accordingly, through this business development Challenge, now entering its second year, Drishtipat seeks to create employment opportunities by funding promising small businesses.

The Drishtipat Challenge invites the general public to submit innovative proposals on business projects for the opportunity to receive a loan of up to US$5,000 per project. While it is preferable that the project serve a social development objective, the primary objective is to create economically viable businesses that can quickly stand on their own and grow. Successful proposals will demonstrate economic viability, the ability to repay the loan within 2 years, growth potential as well as social benefits. The entrepreneur’s experience or track record and ability to bring co-investment funds to the table will be important considerations.

Social entrepreneurship programs in Bangladesh have the tremendous potential to provide the social services needed for balanced socio-economic growth through business and commerce. One common constraint to their growth has been a lack of access to commercial sources of finance. The goal of the Drishtipat Challenge is to help these valuable partners in the development process overcome this constraint and participate further.

For more information about the Drishtipat Challenge and on how to participate, please visit www.drishtipat.org/dpchallenge, email dpchallenge@drishtipat.org , or contact your local Drishtipat chapter.

About Drishtipat
Drishtipat is a nonprofit, nonpolitical Bangladeshi organization committed to safeguarding the basic democratic rights of the individual, promoting social development, and is opposed to any and all kinds of human rights abuses in Bangladesh. Based in the United States, the organization is composed of students, young professionals, and academics with a global reach and local presence through its chapters in New York City, Chicago, Boston, Washington DC, Blacksburg (Virginia), the United Kingdom, Canada, Australia and Bangladesh. For more information, please visit www.drishtipat.org.

[rafiq]

Question from Billah: "Rafiq Miah, why loan and not grant"

In the first iteration of DP Challenge in 2006/2007, we had loans....results at http://www.drishtipat.org/dpchallenge/results.html. Some projects were successful, others were not as much - what you can expect from any portfolio and especially when starting a new program.

This year we changed to loans because it increases accountability and likelihood of success. The entrepreneurs must have "skin in the game", and the need to repay a loan (over 24 months) provides a healthy incentive to perform and execute. We need to get away from donor dependency. So this program is about funding viable small businesses, not handing out charitable donations.

The loan rate is 12% simple interest per annum, to be paid back in 2 years. For an average loan of $5000, the business will owe $6200 in 24 months. The rate is competitive with bank loans, which are significantly harder to get for someone with little "backing", "collateral", etc. And it is extremely favorable compared to the high rates charged by NGOs for microfinance. Are there cheaper loans in Bangladesh? Yes, surely! Our goal is not to be the cheapest loan rate but to be competitve and fair. On a risk adjusted basis, this rate is deeply discounted. Risks include potential for default.

The "social benefit" is also not something we need to agonize over: creating gainful employment, creating products and services - the basics. Of course some projects will have more tangible benefits from a social standpoint compared to others - we will consider that.

What can you do?
- Read more at drishtipat.org/challenge, download the flyer
- Send the info to someone you know who may have a good small business idea
- If you have skillsets which are suitable to be a business mentor, let us know (may be much easier if you are in Bangladesh)

Please send more questions/thoughts/comments....

Thanks

Rafiq

[Tigers_eye]

The money Dristipat is loaning to the people, where is it coming from? Is big shot bangalis investing at dristipat or this is also a loan from somewhere else?

[rafiq]

Hi there Tigers_eye: sorry for the really late reply...the lacklustre performance of our beloved cricket team in Pakistan caused me to stay away from banglacricket for a bit...
good question....the money is not a loan to DP, but rather pool of funds put together by NonResident Bangladeshis who want to give something back in a significant way. So they are not directly investing in Drishtipat, rather they are investing in Bangladesh. Drishtipat takes no % of the money made available for the Challenge. At the moment we are looking for more efficient ways to get connected to entrepreneurs and make awards....and teaming with a new class of private equity funds in Bangladesh that target small and medium entreprises may be a great way. Will let you know more later, in the meantime please encourage your network to take a look at the challenge and submit high level proposals.

thanks

[Tigers_eye]

Originally Posted by rafiq

...good question....the money is not a loan to DP, but rather pool of funds put together by NonResident Bangladeshis who want to give something back in a significant way. So they are not directly investing in Drishtipat, rather they are investing in Bangladesh. Drishtipat takes no % of the money made available for the Challenge. At the moment we are looking for more efficient ways to get connected to entrepreneurs and make awards....and teaming with a new class of private equity funds in Bangladesh that target small and medium entreprises may be a great way. Will let you know more later, in the meantime please encourage your network to take a look at the challenge and submit high level proposals.

thanks

If you are a member of Dristipath, or some how have access to them please give them the following information as a feedback.

"NonResident Bangladeshis who want to give something back in a significant way" - with out any string attached would be better.

Charging "interest" conflicts with the bolded part. Now if one only applies the inflation rate I can understand. With no interest or just the inflation added the success rate would be much higher. (If the sole purpose is giving something back without taking advantage)

In my previous post I have carefully put the word "investing". That says there are benefits for the donars. This is not solely on "a good will". May be a lesser extent than what Grameen is doing.

Finally, I must thank all the donars who have taken up this initiative to give back something to their mother land. At least for their efforts for trying to do something.

[CholCholBD]

Very Very interesting project...thank you for bringing into attention