AidBanc - Banking & Spend Mgt for INGOs

Maf is the Co-Founder & CEO of AidBanc. He is an engineer turned FinTech expert in domestic and cross border payments. Prior to leading AidBanc, Maf founded LumoXchange, a remittance FinTech that enables you to send money abroad by finding you the best possible currency exchange rates (the Expedia.com for global money transfers). He received his undergraduate degree in Industrial Engineering from North Carolina State University and a Master of Business Administration from the University of Manchester’s Alliance Business School. Maf spent the early part of his career working in supply chain automation as a solution provider and then lead PepsiCo's supply chain automation strategy as Sr. Manager. Maf lives in Little Rock, AR with his wife, son and daughter.

Each year, over $150 billion in aid flows from donor countries to developing countries to help solve some of the most challenging problems faced in our lifetime. From food security, to economic development to climate change; Aid plays a critical role in lifting millions up from poverty and helping them achieve self-sufficiency. The problem is that because aid projects are executed in countries where local banking and payment systems are not connect to ERP/Accounting tools, projects are susceptible to corruption and leakage of funds. AidBanc provides a centralized bank account to manage all project funds with the ability to make payments locally in each country in near real-time to bank accounts, mobile wallets and cash. This eliminates the need for NGOs to maintain bank accounts in each country they operate. AidBanc provides NGOs with ultimate control of funds centrally with rich reporting tools and real-time visibility of all expenditures.

The core of what we are solving is the lack of visibility on how project funds are spent in-country. Although Aid provides a lot of good, there is a dark side of Aid, where research shows that up to 30% of aid funds are mismanaged, lost, or unaccounted because of the large amounts of cash that is handled to execute projects. Furthermore local banking and payment systems are not connected to the accounting / ERP tools used to track spend accurately which means data is entered into ERPs well after expenses are made. This also forces NGOs to patch together a series of siloed financial tools to get visibility into their financial position and then have to manually reconcile and track spending after the fact. This is a major reason they spend 80% more time managing/tracking their finances relative to a multinational corporation according to a Bridgespan Group study conducted on the largest multinational NGOs. The lack of visibility enables bad actors to syphon millions of dollars from aid projects that are meant to do good.

AidBanc provides a corporate digital bank account for NGOs from which they can seamlessly manage their share of $150+ billion in international aid across multiple countries from a single FDIC corporate account. AidBanc provides a single dashboard to manage all project operations funds in one account with the ability to make real-time payments locally in each country to bank accounts, mobile wallets and in cash. AidBanc has an integrated expense management, budgeting, payroll, payables solution as well as an innovative local sub-account access for local NGOs field offices to manage allocated funds. Key features of AidBanc are:

• Full featured digital bank: centralized account to hold all donor operational funds in USD.

• Realtime global funds disbursement: pay vendors, run payroll, issue reimburse funds to bank accounts, mobile wallets, or cash locally to over 130 countries.

• Expense management: manage all global expenses by project, country from one centralized platform with rich reporting and real-time visibility.

• Budgeting: Easily set up budgets to manage all spending. Set budgets by country, projects, location or subcontracted local NGO.

• Transparency: Immutable ledger built on blockchain (DLT) for a holistic digital visualization of the flow of funds across several projects and countries.

Our banking and spend management platform positively impacts every aid project that is funded and executed using AidBanc. This means the NGOs can focus on delivering aid more efficiently with better visibility and making it harder for bad actors to leverage aid funds for unsanctioned spending or corruption. By managing and tracking spending at the point it is made, we are able to automatically pipe spending data to accounting tools used by NGOs or alternatively, we can provide right reporting to NGOs which can be shared automatically to donors (Foundations, Donor Gov. entities) via our platform. This means every NGO that uses AidBanc can give view access to Donors and partner NGOs on projects that are being executed thus always ensuring they are always in compliance. Lastly the main goal of AidBanc is to ensure that aid funds are spent where it needs to be and not mismanaged or misappropriated.

Millions of people across the world are positively impacted by aid and almost all aid organizations are working on elevating communities to meet the UN’s Sustainable Development Goals. Unfortunately, with billions of dollars of aid each year spent on aid, there are millions of dollars that are misappropriate because of the complex nature of tracking spending. AidBanc solves that lack of visibility by tracking every dollar spent on aid projects in real-time and automatically reconciles it back to key accounting/ERP systems.

I was born and raised in The Gambia and Sesie’s is a first generation Ghanaian-American. We met at the FIS FinTech Accelerator program in 2016 when we both were running our own FinTech startups. Given our shared background and passion for solving problems with technology, particularly challenges that impact Africa and developing markets. We share an interest in reducing corruption and improving the lives of millions below the poverty line in Africa. We both have family members who work in the aid space and hearing from them first had the inefficiencies in managing/tracking finances and the corruption in some projects. Sesie worked on several aid projects with USAID and the USDA in Ghana, Burkina Faso, and Togo growing up with his parents and experienced first hand the challenges of delivering aid in rural areas working with cash.

The founding team and myself are very passionate about AidBanc because we know first hand the impact aid has on lives in the most vulnerable communities IF it is implemented properly. Over the past 50 years over $1 trillion aid has flowed from donor countries to emerging markets and billions more is expected to be spent in the future. Given the large amount of funds that flow into countries where cash is the preferred form of payment, it enables bad actors to take advantage of the limited visibility ERP/Accounting systems have on local expenses. This adds to the vicious cycle of aid where more aid is required to meet the same objectives that have been around for decades. We want to change how aid is delivered, managed, and tracked with AidBanc. We are building a platform that digitizes every payment (in cash, bank accounts, or mobile wallets) that is made by an NGO from AidBanc & automatically reconciling it back to accounting/ERP systems. This makes it extremely difficult for bad actors to misappropriate project funds and ensure that aid is delivered to the communities that really need it and most importantly, we can track aid spend more accurately. 

The core founding team has the right experience building and scaling financial technology companies in addition to having a personal connection and understanding of the challenges with delivering aid in emerging markets. The core team has over 40 years experience in FinTech, operations and enterprise sales/customer support. This includes implementing point-of-sales systems across 400 corporate locations processing millions of dollars annually and providing key customer support. Team members also have experience building a digital bank to process legal payouts reaching $100MM and annual payments.

I moved to the United States at the age of fifteen with my mother and siblings as political asylees. We left our home country of Gambia and resettled in North Carolina. The transition to the U.S. was extremely difficult in the first year. My mother could not find work and we relied on my father’s Gambia salary (1 unit of Gambia currency was the equivalent of 2 cents) and savings to help but that was not enough. I recalled my mother taking up catering to sell lunch boxes to taxi drivers at the Raleigh-Durham Airport who were mostly African to make ends meet. Everyday I got home from school, I would be in the kitchen with my mother helping her prepare for the next day’s delivery and then have just enough time to do my homework before going to bed. This was extremely challenging for me because I had to adjust to the different curriculum, teaching methods and culture in high school. It was a difficult and challenging time for our family and my ability to focus on school but I was able to persevere through it.

I volunteer at Remix Ideas, a local mentorship and training organization that focusing on building a more inclusive and equitable entrepreneurial ecosystem that empowers entrepreneurs to start, grow and scale their businesses. As past recipient of the Great Little Rock Regional Chamber Minority Entrepreneur of the Year, I take it on myself to give back to the community. A mentor entrepreneurs on how to build a sustainable business from the ground up, and raise capital. I provide training twice a year on revenue models and pricing strategies for entrepreneurs. Giving back to the community and in particular minority entrepreneurs is extremely important because of the lack of representation of black entrepreneurs in Tech and the fact at ecosystems that are created to foster entrepreneurship are not in their communities. 

Currently there isn’t a platform on the market that provides the full suite of a corporate bank account, full set of required ways to move money domestically and internationally, and a single dashboard to manage/track global spend in real-time. We are creating a new financial platform for NGO's to manage their budget and view their cash position and also offering a way to remit payments to other countries and offer a digital payment system for spending in other countries. We are digitizing all spend regardless of how it is disbursed (Mobile, Bank, Cash) and tracking it in real-time as it is being spent from AidBanc and while funds are held in mobile wallets. The resulting competitive advantage is that we:

• Eliminate the need to have local accounts in each country which in turn saves the NGO time, operating costs, and loss of buying power due to FX risk/foreign inflation while mitigating “leakage” (i.e., theft) that is a result of having to currently deal with cash  

• Remove the manual reconciliation process of expenses tracked in excel back to ERPs because we automatically can pipe data directly into ERPs.

• Better facilitate existing inter- and intra-NGO financial arrangements in a manner that mitigates risk and makes aid more efficient 

AidBanc will indirectly impact millions of people across the globe who receive aid. We have signed LOIs with 3 international NGOs listed below and our target is onboard over 100 NGOs in 5 years and operating all over the world.

• Zakat Foundation of America - $15MM annual spend 

• Winrock International - $90MM annual spend

• DevWorks International - $15MM annual spend

Our goal is to build the AidBanc platform in phases.

Phase I: Launched AidBanc in Jan 2021 with our first 5 NGO clients which will enable NGOs to centralize and tracking spending from a single account.

Phase II 12 - 24 months: Raise Series A capital and launch domestic banking capabilities where smaller NGOs can have a single banking platfrom with debit cards as well as an ability to support international operations.

Phase II 24 - 60 months: Raise Series B capital Expand AidBanc to support European and Canadian based NGOs

There are a few challenges that we would face as we rollout the AidBanc platfrom.

• Economic trends may see foreign aid levels stagnating. Emerging markets are not getting anymore aid unless impact can be proven. This could mean stagnant volumes of funds and less revenue for AidBanc to fund operational growth.
• Conversion of foreign aid currency and the associated margins fund a small but powerful sector of the elite in emerging markets particularly local banks. This could lead to regulatory changes regarding funds being held locally on behalf of NGOs. This would require more complex infrastructure costs for AidBanc around licensing and banking. 
• Rising global tensions from war and terrorism have increased broad and blanket sanctions which impact the ability for aid organization funds to reach recipients caught in the middle of these conflict regions. These restrictions could impact AidBanc's ability to move funds into those worn torn areas to reach NGO beneficiaries.

Below are a few strategies that we will use to overcome market challenges.

• For most developmental organizations, successful giving is measured almost entirely by the size of the donor’s portfolio, and not by how much of the aid is actually used for its intended purpose. By bringing transparency to the aid process, impact can be measured with actual results in funds delivered to the actual recipients or causes, which leads to more Aid dollars from donors to be processed through AidBanc, not less. 
• AidBanc converts funds to local dollars rather than holding funds in foreign currency. Although this sector of the public will suffer from the erosion of profits, the country itself will benefit from stronger currency flows, and increased economic activity across different sectors of the population. This would combat any regulatory requirements. Even if requirements are imposed, AidBanc would still have transparency of exchange rates and funds movement, reducing the opportunity for corruption
• Bringing transparency to the recipient of funds would actually help regulators in monitoring funds and recipient of funds in worn torn areas and conflict regions. It would actually be a benefit by identifying good actors through AidBanc, you expose the bad actors. This will help NGOs be able to continue to move funds through AidBanc to these regions as the flow of funds can be properly vetted.

AidBanc has partnered with the key cross border payment providers like FC Stone, MasterCard, MFS, Thunes and others that make up our proprietary cross border payment switch with a smart routing engine. This enables AidBanc to route payments in the most efficient and lowest cost rail into bank accounts, mobile wallets and in cash globally. Second we have partnered with MVB bank who will serve as AidBanc’s sponsor financial institution that enables us to offer digital corporate checking accounts. 

To date, we have secured two LOI from the Zakat Foundation of America, DevWorks and Winrock International to pilot of AidBanc and eventually convert over to full clients after successful pilot. Combined our LOI clients spend over $130MM in aid across 40 countries. 

As a digital bank, AidBanc has multiple revenue streams to sustain its business model. We generate revenue from the deposit interest of funds that are held at AidBanc by NGOs, second we generate revenue from the margin on the currency conversion when cross border payments are initiated by NGOs, third we generate revenue from interchange fees on debit card spending, and lastly we generate processing fees from online donation widgets for NGOs.

Over $70 billion in aid flows from the U.S. to emerging markets funded by the U.S. government (~$30B) and private philanthropy (~$40B) representing a total market revenue of $1.5B. As a digital bank, AidBanc makes on average 200 basis points on funds held at AidBanc, payments on AidBanc via FX margins, interchange fees from debit card use by NGOs. We project to capture 10% marketshare of aid spend by the 5th year of operations which represents $94MM in revenue and be profitable. To achieve this, we will raise two rounds of capital after our current seed round. 

Pre-revenue and actively raising funds.

For the initial phase of the AidBanc project. We estimate a total cost of $2MM to build the AidBanc platform and support it during the initial launch of the pilot for a period of 6 months. Below is a breakdown of the budget:

• Product & Software development - 50%

• Sales & Marketing - 20%

• Operations & Support - 15%

• General Admin - 15%

Once the capital we are raising has been fulfilled, we expect to spend $1.25MM In 2020 of which $800 - $900 will be spent on building the banking, payments and expense tracking software platform.

We are applying for the Elevate prize for two reasons. First, the market for funding opportunities for technology companies focused on solving problems with a social impact is limited and we believe that The Elevate Prize will help jumpstart our development to have enough traction that we can attract private funding to support our operations. Second, give the network for past winners, NGOs, foundations, we believe that we can make connections into the right spheres of influence in the NGO space that can champion AidBanc and help increase/accelerate adoption of our platfrom.

We would love to connect with the organizations below who represent two key constituents; Donors and NGOs. As we are building AidBanc that provides better visibility and traceability of aid funds, it is critical that we work and collaborate with key partners to asses the process for funds flowing from Donors to NGOs and the reporting back to Donors. The organizations below will enable us to ass there operations and propose leveraging AidBanc to replace their current financial and reporting processes.

The Bill & Melinda Gates Foundation, Save the Children, The World Bank Group, Compassion International,  Andan Foundation