The SOCAP10 Challenge has moved into the final week of voting and, thanks to many of you, my proposal to develop more human capital—people trained to help low-income communities create, fund and manage businesses that can alleviate poverty—is currently one of the leading ideas to win the competition. However, the competition is far from over and there are many other good competing ideas. If you haven’t already voted, go to Myoo Create and do so by September 14th.
One thing that voters seem to find compelling about my idea is that it will also create exciting entry-level jobs for young college graduates who are entering the market in a very difficult economic environment. I have made the analogy to Teach for America which is drawing top students from leading universities and training them as teachers in inner city schools. I believe we can tap into this same rich vein of talent to find graduates interested in becoming what I have called “community development bankers.”
In my last blog post (see $120 Billion Opportunity for the Poor below) I crunched a few numbers and estimated it would take about 175 community development bankers (CBD) to deploy $100,000,000 in Individual High-impact Investments (IHI) to reach about 5,700 low-income entrepreneurs over the course of one year. Assuming each IHI had an average tenor of three years, we would need almost 70,000 CBDs to deploy the entire $120 billion the Hope Consulting report estimates is available for funding IHIs. Now that is scale!
But let’s be modest and say we are only going to work with 10% of what is available. That is still about 7,000 CBD jobs and funding for around 700,000 low-income business owners. How to do this? Clearly, we need to collaborate with academic institutions and experienced MFIs and banks to develop the curricula and provide venues for training. Preliminary discussions I have had with a few institutions have been encouraging. I am convinced that within a year we could have programs in place in leading business schools, liberal arts colleges, community colleges and university extension programs.
The short-term goal would be to create a pipeline of CBDs of about 2,000 per year so that in three years we would be close to having a cadre of young bankers working in low income communities capable of deploying IHIs of about $3 billion per year. But for whom, exactly, do the CBDs work? Again, taking Teach for America as a model, as school districts employ the students trained by Teach for America so would existing non-profit MFIs, already working in low income communities around the world, employ the trained CBDs.
One might ask what would motivate these non-profits to hire the CBDs? The answer is that they come trained to be effective community development workers and they come with funding! More about this in my next post. For now it’s important to continue developing enthusiasm for this idea by voting for Build Human Capital for Social Investing at Myoo Create.