PROPOSAL TO SET UP 2,500 ACTIVE INVESTMETN CLUBS IN 3 Years FOR ZANACO
RE: 2,500 ACTIVE INVESTMETN CLUBS IN 3 Years
The Proposal: We seek partnership with ZANACO, to support
the bank staff, and lead programs to execute recruitment, and support of 2,500
investment clubs, within the 12 months. Our services will include software
development, training and support of investment clubs, conceptualization and
execution of advocacy campaigns, as well as supporting of bank staff. At an
investment/cost of K. 16,950,000 in the investment clubs project, targeting 2,500
clubs in 36 months, the bank will turn a projected profit margin of K. 120,750,000.
Further, the expected capital to be availed to other borrowers is expected to
be approx. K. 5 billion, taking a figure of 2,500 investment clubs, with 10
members each, each member saving K. 5,000 per month.
About The
consultant. The consultant
is a registered company, Zambia’s first super app, with focus on promoting
digital access to services, including financial services. We propose this
partnership to promote financial inclusion through promotion of investment
clubs.
Project Reach: The goal of the
project is to reach 2,500 clubs, and hence, an approximated 100,000 account
holders, targeting an average of 10 members per club.
Project Sustainability: The sustainability of the project will be
realized through multiple strategies including charging transactional fees to
club accounts, charging software usage fees, charging account opening, and
cheque book fees, as well as other bank fees applicable.
Project Relevance: Investment clubs are becoming a force for syndicating micro
capital for meaningful mega investment projects, and hence, are a strategic
partner to lend money to, and keep money for, and hence, the bank benefits by
engaging and supporting investment clubs. The engagement of clubs can also
attract new partners for the bank.
……………………………….
Dichol Dimo,
CEO,
The Consultant
+260973545318
Contents
Training ZANACO staff on investment clubs and financial
literacy;
Training investment clubs administrators
Zanaco Ajuoga Board Game Competition
Zanaco Investor In A Minute Competition
Create 10:10 loan, which is a 10% monthly interest loan for
10% of salary advance for club members;
Creation of a new account product for investment clubs;
Mobile App and USSD platform for investment clubs to easily
transact, deposit, and access credit.
Profile of Dichol Dimo,
Founder of The consultant & Lead Consultant
BACKGROUND
Zambia is a country of
paradoxes, with large families not working together to get out of poverty;
large groups saving to consume rather than to invest; very fertile lands, too
fragmented for commercial exploitation; and growing income levels which are not
matching with the requisite mindset of investing for wealth generation.
Consequently, there is
still a large class of individuals who are yet to achieve financial freedom,
and who still live in the cycle of earning to consumption, and even when they
save, they still save for consumption, and not saving to invest. This
consumption pattern also finds itself in saving groups, village savings and
loans associations (VSLAS), Chilimbas, and table banking fora, where monthly,
or annual savings are quickly distributed and consumed.
The 21st century
however has transformed Zambia into a rising country, with increasing middle
income earning capabilities, increasing mindset shifts on group savings and
investments, and increasing realization of the need to gravitate from aid, and
towards trade.
To this end, there are
various organizations, movements, intergovernmental commissions, and government
level programs, sprouting across the country, with the aim of promoting
livelihoods, increasing productivity, enhancing competitiveness, and
contributing to sustainable wealth creation.
However, the
transformation of groups from saving and lending associations into saving and
investing clubs is still new across the country.
What
Are Investment Clubs?
An investment club is an organized group of
individuals, usually comprised of friends, coworkers, church members, neighbors
or family members, who meet on a regular basis to network, learn and pool their spare cash and invest in the stock market and/or other
investment opportunities. The principle of investment clubs is the idea that together we can do more[1].
Why
Investment Clubs?
Investment Clubs are formed for one main reason,
that is, to enable members to pool their savings together with the intention of
investing it to guarantee financial freedom. However, investment clubs also
provide members with social protection, by such services as group insurance, as
well as educational platform through field learning trips and guest speakers’
sessions.
At a micro level, investment clubs allow members to
leverage their small sums and participate in large investments from the pooled
assets.
At the macro level, investment clubs provide the
nation with liquidity for financing high net worth projects through the
financial markets, equity and debt investments.
At the level of promoting foreign direct
investments, investment clubs provide leverage, access to local landed
resources and knowledge of local investment climate, all which are relevant in
strategic partnerships with institutional investors for participation in large
scale, high networth investments, for income generation, wealth generation and
employment creation.
SCOPE OF PARTNERSHIP
The proposed partnership will cover the following
areas:
·
Training
ZANACO staff on financial literacy and financial freedom concepts, investment.
·
clubs,
and financial literacy board game;
·
Establishing,
on behalf of the ZANACO, high school Student Banks, modelled along ZANACO
ethics and values, and training students and leaders of the student Student
Banks;
·
Providing
the Ajuoga Financial Literacy Board Game, the financial literacy board game, to
brand it as exclusive promoter, and sell or give to clients and clubs, for an
agreed period of time;
·
Providing
software for investment clubs to enable better records management, with a model
app platform for quick transactions to their account;
·
Selling
the business plan for 10:10 loan, which is a 10% interest loan for 10% of
salary advance;
·
Creation
of a new account product for investment clubs;
·
Development
of a mega project for investment clubs, modelled along the lines of Kenya’s
future Tatu City, etc.
·
Organizing
business pitching events, where local entrepreneurs pitch businesses to
investment clubs.
Training ZANACO staff on investment
clubs and financial literacy;
The consultant proposes to offer financial literacy
trainings to staff of the ZANACO, covering areas of financial literacy,
financial freedom, acquiring money, managing money, investing money, insurance,
loans, savings, business coaching, and financial projections.
Dichol Dimo will offer the following financial
literacy books, to the Library/Investment Clubs Lounge, for knowledge to
investment clubs and investment clubs s:
1. Be Bold, Sell Something- Dichol
Dimo’s Guide to Entrepreneurship
2. Raising Capital- Sources
and Uses of Business Capital (How To Get Capital, Manage Cashflow, and Invest
Business Profits)
3. Successful Investment
clubs s - Managers' Guide to Acquire, Retain and Grow Membership, Savings and
Assets
4. Making Money Together: Dichol
Dimo’s Investment Club Manual
5. Making My Child
Financially Intelligent: Money Lessons by Age Group (from 3-13yrs)
6. Invest: Dichol Dimo’s
Guide to Financial Instruments & Alternative Investment Products
7. Retire Happy: 21 Questions
to Plan My Retirement
8. 69 Ways to Earn Extra
Money While Keeping My Day Job
9. What Can I Sell? 101
Business Ideas for Youth in Africa
Training investment clubs
Training investment clubs should focus on the
following topics areas:
¯
Risk
Management & Portfolio Diversification
¯
Membership
Retention & Retention
¯
Tax
& Regulatory Issues (Collective Investment Schemes-investment clubs s,
investment clubs, PE funds, etc)
¯
Leadership
& Succession Planning
¯
Strategic
Planning
¯
ICT
Integration for Investment Clubs (Software)
¯
Micro
Investment in Micro Enterprises/ Local PE
¯
Joint
Investments
¯
Fixed
Income Securities Investment
¯
Financial
Reporting for Investment Clubs
¯
Stock
Market Investment
¯
Islamic
Finance And Islamic Investment Clubs & Investment clubs s
Training investment clubs
administrators
Providing
specialized training to administrators of investment clubs, to help them to
manage affairs of the clubs better. This covers strategic planning,
communications, etc.
Zanaco Lion’s Den
The consultant proposes that the ZANACO organizes TV
program where entrepreneurs pitch infront of investment clubs, and select high
networth individuals, and private equity funds, to promote pitching, and
investment culture. This can then generate leads for the ZANACO to follow for
financing, or the clubs can access loans form the ZANACO, to invest in such
businesses. This will be more like Shark Tank. More like KCB’s Lion’s Den. This
will allow investment clubs to then borrow from the bank, to invest in various
opportunities.
Zanaco Ajuoga Board Game
Competition
This is a game of teams of fours, playing the ajuoga
board game, which is meant to let them appreciate financial literacy terms, and
knowledge. The winning teams can get accounts opened for them, as well as
tshirts, pens, tickets, lunch coupons, shopping vouchers, etc, as gift prizes.
Zanaco Investment Puzzle Game
This
game is about teams of twos playing to identify investment terms, and competing
with another team. It leads to financial literacy and awareness.
Zanaco Investor In A Minute
Competition
This is a university competition which brings together
university students in teams of twos, to compete in answering questions about
investment terms, and financial terminology. A sample is herein attached. The
winning teams get presents, including books, and accounts opened, t-shirts,
laptops, etc.
Investment Clubs Lounge
You will need to get a space for investment clubs, at
one of the branches in town, and or, at a co-working space that you support,
for clubs to meet, and have meetings, and chat. A meeting room, of sorts, in as
many cities as practically possible.
Create Zanaco financial literacy
board game, by rebranding Dichol Dimo’s Ajuoga financial literacy board game,
exclusively branded for ZANACO, for an agreed period of time, and agreed number
of copies;
The consultant has developed a financial literacy
game, Ajuoga, which addresses, in a fun and educative way, how to acquire,
grow, and lose money. The game is a board game, with an e-version for mobile
apps and desk tops being developed currently. The cards, with printed
information, act as financial literacy materials, as well as branding for
advertising. The consultant proposes to give your ZANACO exclusive use of the
game for advertising on the board as the only financial institution, for an
agreed period of time.
Create Zanaco Student Banks,
modeled along ethics and values, and training high school students and leaders
of the student Banks;
The consultant proposes to visit schools, and
establish high school student run Student Banks, with Student Banks operating
every Saturday, half day, for withdrawals, Banking deposits, and such
activities. The Student Banks will also offer financial literacy trainings. Zanaco
officials will work together with a board of teachers and officials from your
ZANACO. Strategic leverage of current work with ACCA Zambia, and CMA, will make
it easy to transform every high school and university to have an investment
club.
Create 10:10 loan, which is a 10% monthly
interest loan for 10% of salary advance for club members;
The consultant proposes a Banking product, 10-10,
which operates to give salary earners who are members of investment clubs quick,
loan of 10% of their salary, at a cost of 10% in monthly interest, deductible
at the instance of salary being received to the account. This loan will have
high uptake, and operate as the current airtime and mobile money loans.
Creation of a new account product
for investment clubs;
Dimo proposes that the ZANACO creates an account for
investment clubs, and benefit from the high collection and ultimately, deposits
from such bodies. Zanaco can then offer custodial services for members
borrowing on such accounts, or just benefit from account maintenance fees, and
investment of such sums from cooperatives which do not want to utilise their
money in the near term. Through low account fees, reduced charges, and such
other benefits, this account can be very successful.
Two products were developed with features and
requirements as highlighted in table below:
Features
-
Opening
cash deposit of K10,000
-
Minimum
balance K10,000
-
Issue
of electronic account statement monthly
-
Transaction
alerts to selected account managers
-
Attracts
monthly account maintenance fee
-
Permits
cash withdrawal by completing a withdrawal voucher
-
Permits
deposit by way of cash, wire, mobile banking, cheque and any acceptable means
of deposit
Requirements
¯
Opening
cash deposit of K10,000
¯
Certified
copy of constitution or by– laws
¯
Minutes
to open an account;
¯
Certified
resolution to open the account
¯
Copy
of valid Identity card for Account signatories
¯
Two
(2) recent Passport photos for the Account signatories
Create a mega project for
investment clubs, modeled along the lines of Kenya’s future Tatu City, etc.
The consultant has seen how well planned real estate
mega projects can lead to high return on investment for shareholders. Projects
such as mega cities, Tatu City in Kenya, and such others, lead to opportunity
to leverage capital, and do something big. The consultant proposed for your
ZANACO to earmark a location out of the business district, maybe 20 kilometers
off the central business district, and plan a residential, commercial,
educational, recreational, and hospitality facility in over 100 acres. Such
will invite investment clubs to then own studio apartments, 1-3 bedroom villas,
apartments, commercial real estate, warehouses, etc. Zanaco can then leverage
its own funds, and third-party funds from international individual and
institutional investors, as well as development finance institutions.
Investment Clubs Software
The consultant proposes to offer the free investment clubs
software to all investment clubs in your ZANACO. We will be happy to start this
rolling out immediately. This will offer the ZANACO detailed, and or ordered
data on investment clubs activities, while giving clubs ease of records
management. The software is a simple to use platform that enables investment
groups to manage all their group activities and communications. The cloud based
solution enables group administrators to easily and efficiently track all
contribution accounts within the group.
Mobile App and USSD platform for
investment clubs to easily transact, deposit, and access credit.
Creation of USSD platform for investment clubs, an
online platform to deposit their savings straight into your ZANACO account,
using the platform to route the money from mobile money numbers. Alternatively,
ZANACO can pay for this software development.
Chambers of Commerce
¯
Connection
to strategic companies to give other products to the clubs by leveraging on the
power of numbers, for instance, partner with petrol stations for discount to
Investment Clubs, partner with gyms, partner with gas cooker companies, partner
with insurance companies for group covers, etc.
Incubation Hubs
¯
Easy
access to private equity investment options through partnership with chambers
of commerce, and incubation hubs.
FINANCIAL
PROPOSAL
The following is the proposed cost breakdown
for consultancy.
|
Item |
Total |
|
Drafting
& Printing of Investment Club e-Download Posters, and Manuals For Bank
Staff & Investment Clubs |
K. 100,000 |
|
Printing of Investment
Club posters & Hard Copy Manual For Bank Staff & Clubs-5,000 copies |
K.
1,000,000 |
|
Production
of Investment Club Management Video/Short Clips (8 Modules, covering legal
issues, registration, tax issues, leadership & succession, corporate
governance, member savings, strategic planning, and investments & growth,
in English. |
K. 5,000,000 |
|
Training of Bank
Staff-50 branches. Consultancy fees covered by consultancy figure, but per
diem paid per venue, approximated at K. 10,000 per branch, for 50 branches. |
K. 500,000 |
|
Coaching
ZANACO Management Team (Investment Clubs Product Managers) & Continuous
Support to the Project Team. Part of consultancy fees (but per diems paid as
per venue of event), approximated at K. 10,000 per visit per month, for 36
months, hence. |
K. 360,000. |
|
Public Speaking &
Advocacy in all metropolitan churches, targeting 50 churches. Consultancy
fees, as below, but per diem, at K.2,000 per church, for 50 churches. |
K.
100,000 |
|
Data
mining current joint accounts, and contacting current clients, to register
investment club accounts. Phone calls, and text messages, to members holding
joint accounts, and to all group and individual account holders, using
current service providers, estimated at K. 1 per account holder, targeting 100,000
accounts. |
K. 100,000 |
|
Developing Software for
Investment Clubs, Both Executable version, branded ZANACO, On Cloud version.
Most individuals have not embraced cloud, and still want to have all data
within their computers. But with updatable cloud application, it is as good
as cloud. Consultancy costs as below, but direct development costs. |
K. 2,000,000 |
|
Setting
up toll free line, as well as calling and following up on 2,500 investment
clubs, offering online/on phone support. Budget to cover also the two toll
free line offices. K. 10,000 monthly, f0r 36 months. |
K. 360,000 |
|
Visiting at speaking at
4 Zanaco quarterly investment clubs fora, every year, for 3 years. K. 10,000
per fora. |
K.
120,000 |
|
Visiting and Speaking to
150 Investment Clubs- (3 years) targeting one club per week. Bank to offer
100 bank sponsored visits to the first 100 clubs to sign up, including up
country clubs. Costs paid by the investment clubs. Bank sponsored visits to
cost K. 2,000 per visit, for 100 clubs. |
K. 200,000 |
|
Establishing, on behalf
of the ZANACO, high school Student Banks, modelled along ZANACO ethics and
values, and training students and leaders of the student Student Banks.
Targeting 100 high schools and colleges, hence, 100 clubs, at a cost of K.
5,000 per school. |
K.
500,000. |
|
Providing the Ajuoga
Financial Literacy Board Game in the investment clubs quarterly meetings
competition, as well as in the high schools, the financial literacy board
game, to brand it as exclusive promoter, and sell or give to clients and
clubs, for an agreed period of time. Each game board game is K. 1,000, for 5,000
games, and comes with: Investor In A Minute
Game®, Investor Puzzle®,
and Dichol Dimo’s Investment
Clubs Manual®. Successful Saccos®-Guide
for Sacco Managers. |
K. 5,000,000 |
|
Creation of a new
product, 10:10 loan, which is a 10% interest loan for 10% of salary advance;
for members of investment clubs. |
K.
10,000 |
|
Creation of a new
account product for investment clubs; |
K. 10,000 |
|
Creation of a mega investment
project for investment clubs, modelled along the lines of Kenya’s future Tatu
City, etc. A housing estate, a gated community with affordable housing units,
flats, upto 500,000 housing units. |
K.
100,000 |
|
Organizing business
pitching events, where local entrepreneurs pitch businesses to investment clubs,
in 99 cities across Zambia, with 24 entrepreneurs per city pitching to the
consultant, and ZANACO, and investment clubs staff/members, per town. Held at
town halls across the country, at organization costs of approximately K. 10,000
per city. |
K. 990,000 |
|
Retainer for
Consultancy, K. 500,000 per year, with half paid up-front, and the rest paid
in equal monthly installments, for 36 months. |
K.
500,000 |
|
Total (Approximate) |
K. 16,950,000 |
Payment Plan & Exclusivity
The payment shall
be as per project.
Consultancy fees
shall be paid upfront 15%, and the rest, paid monthly.
The main
milestone is to have 2,500 clubs registered with ZANACO.
Milestones shall
be spread over the term of project.
|
Target Clubs |
2,500 |
|
|
|
Units |
Projected Revenue |
|
Account Opening Balance, Cheque Books, etc. |
100 |
250,000 |
|
Interest Income On Loans, At 18%, Loans Of K. 100,000 Per Club, Per
Year, For 3 Years |
54,000 |
135,000,000 |
|
Transaction Fees, Assuming One Transaction Per Month, Of K. 20 |
720 |
1,800,000 |
|
Annual fees per member, for use of app, per
club. |
10 |
75,000 |
|
Total Revenue |
137,125,000 |
|
|
Total Cost Of Consultancy |
16,950,000 |
|
|
Gross Profit From Operations of Investment Club Product |
120,175,000 |
|
From the above,
an investment/cost of K. 16,950,000 in the investment clubs project, targeting 2,500
clubs in 3 years, will lead to a profit margin of K. 120,175,000, hence, return
on investment of 709%.
This is in
addition to expected capital raised from clubs, and deposited in the bank
accounts, estimated at K. 2,000,000 per club, for 2,500 clubs, hence, K. 5
billion.
Investment Clubs provide a system of pooling
together capital, lowering risks per individual and availing cheap capital for
the SMEs growth and significant returns. Consequently, Investment Clubs provide
opportunities to impact on positive mindset shifts of members from saving to
borrow to saving for long term investments.
Profile of Dichol Dimo, Founder of The
consultant & Lead Consultant
Dichol Dimo, a lawyer, author
of 55 books, public speaker, entrepreneur, and Inua Kijana Fellow, believes
that financial literacy is the solution to African poverty and unemployment. He
previously worked as expert lawyer (ICT law, financial services law, law firm
management, and legal rhetoric); collective investment schemes advisor
(investment clubs and cooperatives); and a public speaker and coach on
financial literacy, entrepreneurship, investment and personal branding. He is
also a performance poet, armature pianist, armature guitarist, and a believer
in open religion.
Email: info@twende.store
Mobile: +260973545318.
Dimo has been training investment clubs and saccos and
is the author of the first two leading books in these areas in Africa- the book
on investment clubs, Successful saccos - Managers' Guide to Acquire, Retain and
Grow Membership, Savings and Assets, as well as a book on investment clubs,
Making Money Together: Dichol Dimo’s Investment Clubs Manual.
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