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FARIPs financing policy
1. As “innovations” we consider any new idea in the technical, organisational, financial and commercial fields, as well as for scaling up of existing practices. The main beneficiaries of a successful innovation must be rural inhabitants.
2. FARIP does not „support“ African entrepreneurs but „invests“ in their capacities. FARIP behaves towards them as an investor and not as a donor. It should be noted, however, that these investments have to clearly serve the public good of income generation in rural communities with entrepreneurs who have no other option to at least implement their visions on a small scale.
2. FARIP only invests in ideas that have not yet been put into practice. However, something may already have been implemented successfully, but not under rural conditions. Thus, the effort to implement the same technology under rural conditions would be an acceptable innovation. Or: If an idea has been successfully implemented in a rural context, but without achieving a scaling-up to a commercially viable scope, the effort to make it commercially viable would be considered an acceptable innovation.
3. FARIP assumes that up to 70% of its investments may not be successful. This means that FARIP wants to be open for innovative ideas that go beyond the usual mechanisms and opportunities. Accepting this high failure rate is a conscious effort to break through the conservatism of typical established (social) investors who as a result of their own constitutions hesitate to fund not yet tested entrepreneurial ideas. FARIP builds a bridge from the not yet tested idea to a reliable business plan for a start-up based on first concrete experience.
4. FARIP follows up on ideas until it becomes clear what it will mean to implement them. FARIP then examines thoroughly what the possible impact of an emerging business could have on poverty reduction, social development, the environment as well as on the economy and income generation in rural communities. Only then will FARIP invest in initial concrete implementation measures in order to test the idea. Assessing the relevance of an idea necessitates an intense exchange in developing the idea together with the rural entrepreneurs.
5. FARIP has methods at hand to ensure close monitoring of the progress, e.g. through local monitors combined with telepresence through electronic media (e.g. photography, GPS, youtube, electronically monitored financial flows allowing to monitor transactions in real time from a distance, etc.).