How the trust functions
sustainability of the trust
Important in the role of the Trustees is to ensure the ongoing, successful functioning of the Trust. The financial sustainability of the Trust and risk management are seen as being key to ensure that the Trust is able to achieve its objectives.
Crucial to the ongoing operations of the Trust, is its ability to have adequate funding to realise it’s objectives. The funding needs include the loan funding and the operational costs.
Key to the financial sustainabilty of the Trust is it’s funding model, which is to:
raise significant loan funding, which would be repayable in the medium to long term.
Risk Management-an overview
Identifying and managing the significant risks to the Trust
The Trustees have identified, what they regard, are the most significant risks to the GCBDT.The process of risk identification, assessing, managing and mitigating is ongoing.
The most significant risks identified by the Trustees are:
the financial and reputational risk in providing funding to the micro business owner is regarded as the most significant risk to the Trust. A summary of the steps to manage and mitigate this risk iset out below.
the financial sustainability of the Trust. The funding model aims to provide sustainabilty.
The steps to manage the risk of providing funding to the micro business owner, in summary are:
following a robust, proactive and constructive process before a loan is granted.
the business idea to be constructively reviewed both from a concept and implementation point of view as part of the training program.
as a guideline, limiting the amount of any loan to a maximum of 10% of the loan funding available to the Trust.
all loans, where possible, to be advanced on an
incremental basis.
the micro business to have agreed administrative processes and procedures in place. These include having a separate bank account, having supporting documents for all transactions and producing financial reports on a regular monthly basis.
having a loan agreement in place which clearly sets out the duties and obligations of both parties.
Approval Process
The approval process is critical to the success and sustainability of the Trust. It is robust, proactive and constructive process to ensure the best chance of success for these micro businesses.
The steps to be followed for a loan to be approved are:
For the prospective micro business owner to approach his/her Pastor to share and discuss the business idea. Based on this discussion the Pastor will, if he believes that the candidate and the business idea have the potential to succeed as well as being a person of suitable character, with integrity, contact Aaron Makili to continue the process.
The entrepreneur test assesses the aptitude and readiness of the candidate to start and/or run a business. This will be completed jointly by the candidate and the appointed mentor.
The candidate must also present a short summary of his/her proposed business at the same time as completing the entrepreneurial test.
Based on the above the candidate will be considered as a potential entrepreneur.
The candidate will need to then successfully complete the training course.
The candidate who has been assessed as being ready and able to run a business must complete a business plan using the standard form and a cashflow projection for the first 24 months of the business must also be prepared. The Trustees will then sit with the candidate to review the business plan and cashflow projection.
This may result in the business plan and/or cashflow projections having to be updated.
On the successful completion of these steps the loan agreement will be signed and the agreed loan advanced.
The successful applicant will be required to operate a separate bank account for his/her business (one of the banks listed by the Trust).
Training
We have been blessed to have been able to form a strong relationship with Paradigm Shift, a non-profit organisation which helps Churches and community organisations to develop entrepreneurship among poorer communities.
Any person looking to obtain assistance from the GCBDT is required to complete the Paradigm Shift 12-week training program. The course is run twice a year and the number of participants is limited to ensure quality interaction.
The course content has been designed to incorporate the essential steps to start and build a successful business and also covers the financial elements.
The participants are required to bring their business idea to the training course and part of the robust process is to test the business model and, if necessary, refine the business model.
The participant, apart from receiving business training, is also assessed in terms of his/her ability to successfully start and run a business.
Paradigm Shift provide trainers and mentors who walk alongside the participants. The course is fully interactive. Those who successfully complete the training course (which runs on Saturday mornings) receive a certificate at a formal graduation ceremony.
The modules of the course include:
understanding the market the business will operate in
- what industry sector is my product part of
- who is my target market
- who are my competitors
- what are the barriers to entry
understanding who I am in a business context
- heritage – how does God see me
- response-able – self talk and moving forward
- influence – leadership style
- breakthrough – first steps to being the best I can be
- need to know – business basics
- branding, technology, accounting, credit, business
- plan, hiring employees, setting goals, communication
- to customers, pricing
nice to know
- art of selling
- negotiating
- time management
- balancing family and business
- insurance on my life
The Loan Agreement
A formal loan agreement is put in place once the granting of a loan has been approved by the Trustees.
The main elements of this loan agreement are:
The loan agreement is for a maximum period of two years
Interest is charged at the prime overdraft rate
The loan, with interest included, is repayable in equal monthly installments. (the Trust calculates the loan installments)