As the judges review applications for the 2015 P3 Impact Award, we are taking a look back at last year’s finalists. Next on our list is the African Diaspora Marketplace (ADM), a partnership between USAID and Western Union.
As the judges review applications for the 2015 P3 Impact Award, we are taking a look back at last year’s finalists. Next on our list is the African Diaspora Marketplace (ADM), a partnership between USAID and Western Union. In the second installment of our series, we spoke with Romi Bhatia, Senior Investment Officer and former Senior Advisor for Diaspora Partnerships at USAID.
Concordia: How was the African Diaspora Marketplace initiated? How did USAID decide to partner with Western Union?
The African Diaspora Marketplace (ADM) was initiated in 2009, through a joint consultation that USAID had with several prospective partners. We viewed the diaspora through the lens of important stakeholders for international development and wanted to develop a more forward-looking strategy for how we could engage the diaspora beyond remittances. We were hoping to launch our first pilot under the Global Development Alliance (GDA), which is our model for public-private partnerships. In 2009 we co-founded a study, which culminated in a book published by the Migration Policy Institute called Diasporas: New Partners in Global Development Policy. That book focused on six key areas of engagement, one of which was entrepreneurship.
At the same time, Western Union (WU), whose core business model centers on serving the diaspora, had tested an initiative focused on diaspora investment in SMEs in Mexico (4+1 Program). WU was looking for a partner with whom they could leverage their learning from the 4+1 program and apply it to another region. With these shared goals in mind, a public-private partnership took shape, and we launched the ADM in 2009.
C: What was it like being selected as a P3 Impact Award Finalist?
Very exciting. I drafted the application with Barbara Span of Western Union and our USAID colleague Jeff Jackson. We learned a lot from this first pilot, and then through this joint commitment, decided to do a second and third iteration of ADM. This really is an important program to USAID, and to our partner Western Union, so we took the opportunity to share our lessons learned with the broader community. We were really pleased that the Concordia/Darden/State Department committee reviewed it and recognized some of the outcomes and achievements we’ve had as well as the potential for ADM’s growth. When I was in New York with Barbara and Jeff at the Concordia Summit, it was really exciting for us to talk to other partners. Generally speaking, public-private partnerships are not easy to implement, but when done well they can really harmonize and bring in the best skills of multiple partners to address complex problems. These are not simple problems that USAID can solve alone, nor can Western Union. We were grateful as well; it was a great experience.
C: What has ADM been working on since you were selected as finalists?
As I mentioned briefly, we are working on the third round of ADM. It started off as a pilot public-private partnership focused on a business plan competition to inspire diaspora entrepreneurs to apply to be selected for support. That has grown and evolved into a public-private partnership where Western Union brings in its partner banks in these countries.
Western Union has an agent model for doing remittances, so they partner with some local businesses in the U.S. to originate the money transfer, and then the payout to the relative in the home country can happen through a variety of financial intermediaries. From Western Union’s perspective, the initial grant is great—it gets these businesses motivated, and they can leverage it to seek other capital. But all start-up businesses, small or medium enterprises, will always need access to working capital. So they decided to reach out to their partner banks in sub-Saharan Africa to see if they could also organize a Small to Medium Enterprises (SME) banking forum. We invite the winners, as well as the semifinalists and the finalists of the business plan competition, to an SME banking forum with a whole host of banks to look at these vetted business plans, and see if they can get access to debt capital. The grant is really just an impetus, it’s a small portion of what a business needs to continue to grow.
So the third version of ADM that you see now is more than just a business plan competition—it’s a business plan competition linked with an online mentoring platform. We’ve recruited successful entrepreneurs to guide these budding entrepreneurs through the program, and we also have them participate in the SME Banking Forum, which provides them with access to finance, which is always needed, especially in sub-Saharan Africa. ADM 3 is taking what we’ve done at the core, improving upon it, and expanding it. We’ve brought in other partners like the Minority Business Development Agency (MBDA), The George Washington University CIBER program, Homestrings and even Deloitte Consulting. Deloitte is a partner that’s providing consultancy services to the winners. Our public-private partnership has expanded to bring in other partners that can provide value-added services.
C: Why has it been useful to have other partners, like Deloitte, involved? What has been the biggest benefit of that?
Each partner brings a certain expertise to the table that can enhance the partnership beyond just what the founding two partners—in this case, USAID and Western Union—have done. Deloitte provides its consulting services. What you see now in ADM 3 is not a grant of $100,000. It’s a grant of, say, up to $50,000 and $50,000 equivalent of an in-kind package of services for a start-up enterprise. That includes a certain amount of technical assistance provided by the MBDA as well as a certain amount of advisory services provided by Deloitte. Small enterprises need a variety of services and support—the USAID grant can offer support; the Western Union co-funded grant can also provide support; the SME Banking Forum can help them get access to finance; and the MBDA and Deloitte can provide the key technical assistance they need. They’re all different pieces of the puzzle that help bring together a package of services that a business can utilize to grow and prosper.
C: What other partnerships has USAID been working on since the ADM?
I’ve been working on public-private partnerships for years. For example, one of the partnerships I worked on is another GDA that we pursued jointly with Accenture and Cuso International. The purpose of that partnership was to foster a second pillar of the study I mentioned on diaspora volunteerism, which engaged mid-career professionals in providing expertise to NGOs in their home countries. That partnership was called Diaspora for Development (DfD). A second GDA partnership, which focused on the investment pillar, was called Homestrings. Its aim was to engage diaspora investors. In all of these partnerships, we developed a framework, we commissioned the study, we examined the findings, and we then built public-private partnerships to support our activities within that framework. That’s how the ADM, Homestrings, and DfD are all shaped. We build our public-private partnerships to support our engagement with diasporas in different ways, and as a result, they continue to grow.