Published On: Sun, Aug 23rd, 2015

Helping build better future for the earthquake devastated community in Nepal -Concept

Context

When news of the powerful earthquake that devastated Nepal on 25 April 2015 first reached many of us living many miles away from home, it not only shattered our hearts, I am sure all of us felt unendurable pain, a pain so powerful that put us into an abyss, a state of despair and helplessness which could not be explained in words. Soon pictures and videos started emerging in social media of the sheer scale of terror the nature brought on us and shattered lives, landmarks and the very landscape of the country. The death toll soon mounted into the thousands (and still counting), with hundreds of thousands more homeless, disabled and deprived of basic necessities such as food, shelter and medical help. Add to that the slow response from the Government and international and national aid agencies struggling to cope, the only thing on our mind was to think about a way to help our family, friends, and anyone impacted by the disaster back home. The desire to help within us was so strong and so powerful millions of dollar worth of funds, food and supplies were raised in only few days. These funds along with billions more pledged by the international community and people within Nepal have started to find its way albeit slowly to the most in need. The first stage response to save lives and immediate relief for food, medical care and supplies are gathering pace from both within and outside of Nepal.  The immediate response from local communities within Nepal especially the energetic youth deserve an applaud as it has been very swift, organised and timely and in some cases has tried to fill the vacuum left by the very slow response from the State.

 

This entire well directed energy and selfless deeds from all living in and out of Nepal along with the International community will no doubt bring Nepal from the brink of abyss, we will no doubt bounce back. But the question I am asking today to all of us is do we want to bounce back to the same state we were before, and after that get back to our normal busy life of living life for ourselves and our family? Or do we want to use this positive energy, this unprecedented comradery, this selfless intentions to help to do something meaningful for our country, however small it may be, and be proud that we played our part; we helped in whatever way we could?

 

If your answer is a big “YES” like mine, the time has come my friends to ask ourselves a question, “How can we help? What can we do that will have a meaningful impact? I know the answer is not simple and it is easier said than done. The problem I believe we all are facing is there are millions of things we can do but choosing that particular thing to do within our means is the most difficult part.  Today, I am presenting a sustainable plan that is capable of creating a meaningful impact to the livelihood of the most vulnerable members of our community, a plan that if implemented effectively is capable of providing livelihood to hundreds of people over a period of time. A plan that is a win-win for everyone, that can start immediately with minimal capital resources and a plan to benefit everyone involved including all of us that will be involved.

The plan

The plan I am presenting today revolves around the sad reality of life a lot of people are compelled to live in the days to come. Please take a moment to look at the photo below and try to think what we can do collectively to give them a life that is worth living.

People sleep outside on a street a in Kathmandu, Nepal, following a massive earthquake.EPA/Narendra Shrestha

The first thought that comes to mind is to raise funds to provide for their food, shelter and medical care. Yes, a good and noble thought indeed but is it sustainable? Providing for consumption may be a temporary reactive solution but unless it is sustainable the impact may not be meaningful. Let us put this into perspective, we can raise say $100,000 collectively with our effort and send it to these people through some organisations in Nepal or take it ourselves.  We can buy food, medical supplies, tents and other necessities with the fund and distribute to these people and others. This no doubt will provide them with immediate relief which is very important for their livelihood now but what then is my question? What happens when the fund runs out? The very people we helped more than likely will be back to similar situation.

My plan I am presenting today is not doing anything different from the above yet is vastly different than the above. I have built sustainability in the same plan which can provide livelihood to people for life and give us a bigger bang for our buck. My plan is simple yet has the potential to be very powerful. Its built on the notion Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime – Maimonides

Initial Capital Requirement

My plan requires at least 20 people who would be committed to voluntarily walk in this journey with me and contribute $5,000 each to create a fund with at least $100,000. We (collectively through an agreed structure perhaps a trust or a partnership) will invest this fund into high quality, low risk dividend paying stocks with an aim to achieve a return of at least 4%-5% annually for the next 10 years. The expected annual dividend return which equates to at least $4,000-$5,000 annually will be used to fund our project ‘life worth living.’ Converting the annual dividend into Nepalese currency equates to around RS 350,000- RS 500,000 annually which should be adequate to kick start the project within a year’s time. At the end of the 10 years from the date we start, the initial investment of $100,000 with the amount of capital gain/loss will be distributed back to the members of this fund. Although capital gains are not guaranteed, based on historical returns in the stock market, the passive investment of $100,000 should provide each one of us with some gain on our initial investment of $5000 in 10 years’ time.

Sustainability of funds for the project

The proceeds from dividend returns for the next 10 years at 4% although sounds small, it will provide us with a good amount of disposable capital on an annual basis when converted into Nepalese Rupees. The challenge will be to minimise the consumption fund from this and utilise it effectively to fund the project.

Project ‘Life worth Living’

The proceeds from the dividend will be used to fund the project ‘life worth living’ which will be modelled around a highly successful and noble peace prize winning concept, first designed and implemented by Professor Muhammad Yunus to alleviate poverty through micro credit/micro finance services.

‘Life worth living’ project in its first year will target the 10-20 most vulnerable people living in dire situation and work with them to slowly structure their life so that over time they are able to earn their livelihood. An empty stomach trying to feed a family cannot think properly, therefore the project will adopt the following approach;

  • Find the 10-20 most vulnerable people willing to change life.
  • Provide them with food clothing and shelter so that they can concentrate on changing their life.
  • Teach them simple business concepts and this can be anything as simple as buying groceries from a wholesaler and selling door to door to make a little profit or operating a little “Nanglo” stall or a tea/momo stall at a busy roadside.
  • Provide them an interest free loan of up to Rs 1000-Rs 5000 to start the venture so that they can use this to understand and at the same time start seeing the power of simple business concepts able to make a living. The initial Rs 1000 can be converted into Rs 1100 in the first week. That is Rs 100 earning for someone who had lost all their hope in life. This can then be compounded to obtain higher returns. Over time with slightly higher loan balance and compounded returns, it is possible to get their life back in track.
  • Every week, they have to pay back 10% of their profit as a loan repayment until the loan amount is fully paid. This ensures the fund always has the liquidity it needs while providing people with kick start in life.
  • Overtime Once people get back their dignity and grasp the concept they can move to the 2nd stage which means they start providing for their own food and shelter while we provide higher amount of loan to do business i.e. Rs 25000- Rs 50,000.

I am sure there are a lot of ideas, a lot of things we can do and lot of legal requirements and hurdles to kick start this project but since this is only a concept paper, I will not go beyond this at this stage.

This is my plan in a nutshell, if you are interested please send me an email and we will start detailed discussion on this plan or any other ideas you might have. Let us start first by creating a fund and then we will work together to formulate the implementation details. Remember we can have Rs 350,000-Rs 500,000 per annum of sustainable disposable fund to do something, something that can provide livelihood to the most vulnerable. Please take a moment to look at the photo above once again and remember “we make a living by what we get but we make a life by what we give” – Winston Churchill

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This post was contributed by a representative of Blue Marble Financials and is for informational purposes only. This post is not intended to contain any type of financial advice and is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs. Blue Marble Financials will not be liable for any losses, injuries, or damages from the display or use of this information

 

About the Author

- Rajesh is a full member of CPA Australia with a Masters of Business Administration (Finance) from University of Technology Sydney and Bachelor of Commerce (Accountancy) from University of Wollongong.

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  1. Promising concept paper which in real world can delivered. In Nepal’s context it sounds practicle. Nice vision Rajesh ji, all the very best.

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