Development Ratings

Stimulation of investment flows to Africa: There is currently very little private investment capital flowing into the African economies. In 2005, foreign direct investments amounted to only USD31bn (3% of global FDI). There has been strong growth in recent years but Africa’s percentage of global FDI remains significantly less than the c.10% level seen in the early 1970s. There are a number of hindrances to foreign investment in Africa; however, Development Ratings believes that Africa does have investment opportunities which could be attractive to investors if adequate returns are available. Local stock markets are, however, small and illiquid; there is a lack of transparency and high barriers to entry for private investors. MYC4’s simple online investment framework allows individuals, companies, investment funds or any other organisation to invest directly and get involved in supporting and sustaining small African businesses. Development Ratings believes this platform can have a substantial impact on alleviating poverty if it achieves its targeted scale.

Focus on entrepreneurship: MYC4 promotes entrepreneurship and the creation of viable business ideas in Africa – different to a simple grant making platform, MYC4 encourages users to be more than transient in their commitments to relieving poverty in Africa – by earning interest on their investments, users have incentive in sustaining small African businesses. At the same time, African entrepreneurs are encouraged to present workable business ideas.

Focus on information sharing: MYC4’s focus on the effective sharing of best practices can help in: identifying and replacing poor practices, raise the performance of poor performers, save costs through better productivity and efficiency. This transfer of expertise will support the development of deep and efficient market structures in African countries. In addition, this new way of investing also means that both investors and those being invested in can be in direct contact with each other at any moment ensuring transparency and accountability, thus making business more personal and therefore engaging and more meaningful.

Potential to unleash completely new way of giving: By setting up an online platform, MYC4 enables individuals to easily become involved in projects that they are interested in. MYC4 (in many ways like Development Ratings itself) aims at altering the infrastructure of international aid, philanthropy and social investments.