Director,
T.E.(Terry)
Manning,
Schoener 50,
1771 ED
Wieringerwerf,
The
Tel:
0031-227-604128.
Homepage:
http://www.flowman.nl
E-mail:
(nameatendofline)@xs4all.nl : bakensverzet
"Money is not
the key that opens the gates of the market but the bolt that bars them."
Gesell, Silvio The
Natural Economic Order.
Revised English
edition, Peter Owen,
This work is licensed under a Creative Commons
Attribution-Non commercial-Share Alike 3.0 License
BY
AND
Edition 01: 24 May 2004
(Letter from the fronting
NGO)
Place, 24th May, 2004
(Address)
A fully detailed self-financing integrated
development project for the Waso area (Samburu National Park) in the Samburu
County in Kenya has been prepared at the request of and adopted by (fronting
NGO). The project has been placed in the public domain. A short executive
summary of it is attached and a CD with the complete project documents is
enclosed.
The project involves some 50.000 users or
about 10.000 households. The cost of the project is Euro 65 per inhabitant,
with a total budget of Euro 3.000.000. The innovative structures set up under
the project enable the people to collect Euro 3.000.000 in an interest-free,
inflation-free, cooperative development fund over a period of ten years, after
which all the seed money is paid back in a sngle lump sum. During the mentioned
ten years' period, each family in the project area makes a small monthly
contribution to the cooperative development fund. As these monthly
contributions are made, they are recycled in the form of interest-free
micro-credit loans for productivity increase purposes. Over each ten years'
period, the average amount made available for each family is at least Euro
1500.
To set up the economic and social structures
enabling fully sustainable integrated self-financing local development to take
place, a seed loan of Euro 3.000.000 for a period of ten years is needed. We
think this loan is best covered for 75% by aid partners interested in investing
in Kenya's development. The remaning 25% is best covered by the government of
*********.
The Model on which the
"*****************" project is based provides for an interest-free
cooperative financial environment within which private enterprise and genuine
competition in the project area can develop and flourish. The ten years' seed
loan should therefore be interest-free. However the project could support an
interest rate of up to 2% on part of even all of the seed loan, after the
initial two years' franchise period necessary to set up the project structures.
Annual interest payments would be at least partly financed through the sale of
CER carbon emission reduction certificates issued under the Kyoto Treaty.
Progressive reduction of the available seed fund itself, while possible, is not
desirable during the first period of ten years. This would limit the funds made
available in the form of interest-free micro-credits for productivity increase
and slow down local economic development in the project area.
The "****************" project is
inherently "clean". We, as NGO fronting the project, nominate an
independent salaried project coordinator who is solely responsible for project
execution. We, as the fronting NGO are the "project parliament", the
project coordinator is the "government". Systematic on-going audit is
assured through an independent auditing commission with members nominated by us
and by our aid partners, who may also, is they so wish, nominate
representatives with an auditing function to our board of governors. The
project coordinator answers to us. We answer to the auditing commission.
Funding parties may also have their own field auditor, who answers to the
auditing commission and directly to his principals.
A scheme for project auditing is attached.
This will be adjusted to meet your requirements.
The bank structures for the project need to
be modeled on each partner bank's requirements. These will include the national
level corespondent of the partner bank and its regional correspondent in the
**************** District, if there is one. If the regional correspondent has
an office in the ************ district, the project coordinator will open a
project account there. Otherwise the Project, with the help and under the
supervision of the partner bank and/or of an international Green Bank will set
up its own local banking facility. A basic cash-flow diagram is attached. A
more complex banking system is illustrated in the yotobankstructure.jpg file on
the enclosed CD.
Your attention is drawn to Section 2.10
"The effects of inflation on seed loan payments and gift content" and
to Section 2.11 "Insurance and gift content" of the main project
document, which cover situations outside of the control of the local
beneficiaries, the project, and the fronting NGO, for which appropriate financial
guarantees at national government level may be required.
Your financial assistance, by way of gift,
interest-free loan, or interest-bearing loan, in helping to get the
"***************" project off the ground will be greatly appreciated.
Please advise whether you are in a position to finance a quota of the budget
for this project, if so which quota, and on which terms and conditions.
In faith,
Attached:
- Short executive summary of the
**************** project
- CD with details of the ************** project and of the Model on which it is
based
- Suggested plan of audit
- Indicative cash flow diagram.