Everyone needs access to capital.
Solving the pressing problem of poverty and financial exclusion is possible.
The business models, cost profiles and shareholder expectations of South Africa’s financial institutions do not make provision for a mutual gains approach. Everyone needs access to capital to create value. This cannot happen while the micro lending industry and banks continue to exploit their customers.
What is required is a financial services business model in that creates a mechanism for poor people to generate and grow their own capital, thereby creating sustainable opportunities for inclusion in economic activities for all.
FORUS, a South African based Social Business has launched a Public Utility Blockchain (PUB). The primary purpose of providing this shared blockchain service is to reduce the cost and complexity of delivering financial services.
The distributed ledger technology coupled with revenue generated through advertising, loyalty and group buying discounts (provided by FORUS’s advertising partner MAHALA), creates a revenue stream for the entire ecosystem. A percentage of revenue is thus returned, in real time to the community. This ensures a constant source of available liquidity to encourage growth from the ground up, and is the mechanism that makes affordable forms of loans and financing available to a market that only has access to funding at predatory interest rates.
FORUS in partnership with South African cooperative banks and financial institutions, will facilitate true financial inclusion by providing a comprehensive platform and ecosystem to enable free banking.
Apart from the saving of free transaction fees, with the FORUS account, the customer approves all debit orders, deductions and payments. No deductions can be made unless they have been authorized by the customer; — not even by the bank.
Bounced debit order fees and the exploitation of the poor by the micro-lenders and the banking industry will be stopped once and for all. Because the block chain is available to all, the secure platform provides a single trusted immutable record insuring that over indebtedness and irresponsible lending can be eliminated.
All participating financial institutions can utilize the FORUS PUB to store and access securely encrypted customer data at no charge. With the FORUS PUB a national credit register to facilitate debt consolidation and restructuringwill finally be made possible. The massive efficiency brought about by the creation of a single cloud based platform, eliminates many of the costs historically associated with serving the poor cash based customer. This “poor tax” means that those with the least, pay the most for food, electricity, airtime and transport. In order to achieve economic freedom, these practices need to stop.
The need and desire for this platform has received overwhelming demand from grassroots communities and multiple cooperatives representing more than 20 million customers.
The Business Model
FORUS is a social business created and designed to address the social problem of financial exclusion and poverty. It is a non-loss, non-dividend company, i.e. it is financially self- sustainable and profits realized by the business are reinvested in the business itself, with the aim of increasing social impact.
Unlike a profit-maximizing business, the prime aim of a social business is not to maximize profits (although generating profits is desired). Furthermore, no dividends are paid to shareholders. Unlike a non-profit, as a social business FORUS is not dependent on donations or on private or public grants to survive and to operate, because, as any other business, it is self- sustainable.
In the words of Nobel Laureate and founder of the Grameen Bank, Muhammed Yunus, “A charity dollar has only one life; a social business dollar can be invested over and over again.”
Sonny Fisher — Founder