Not only money, but more importantly a business coach to help people start a business in the notorious French banlieues. FinanCités does not issue microloans but invests in small companies and allows itself to be bought out after five years. Two young men from just such a banlieu (suburb) – armed with a good business concept – are now thinking about “going global”.

Sebastien Haziza gets off his motorcycle, takes off his helmet and strides into the immense university building in the heart of Paris. He runs up three flights of stairs, down the corridor and comes to a halt at a bright red photocopier. "Voilà!", he exclaims. "This is one of ours." A sign on the side says ‘copies gratuites' in big letters: free copies.

"Our photocopiers can now be found in 70 percent of all French universities. Last year, students made around three million copies on them. And we only set up shop two years ago!"

Combating AIDS
Sebastien and his business partner Malik Brachemi had a bright idea. They wanted to install machines in universities so that students could photocopy for free. The funding was to come from companies who advertised on the other side of the paper.

A student who comes along to copy some lecture notes shows us the sheets of paper. The reverse side features an ad for an anti-AIDS campaign. "Nothing wrong with that, is there?", she smiles. "At the moment we do a lot of work with government bodies,” explains Sebastien. “After all, you have to be careful about what you print on the paper. We don’t want any problems with offensive ads."

But before they even got to that stage, Sebastien and Malik needed money. And that was the one thing that their fledgling business - Dopad Media – simply didn’t have.

Helping hand
"We approached investors, banks, business angels, you name it," Sebastien recounts. "They were all open to us, but what we really wanted was a partner who could give a young company like us a helping hand. We were only just starting out in business." The duo eventually found what they were looking for in FinanCités, a subsidiary of international microfinance organisation PlanetFinance.

FinanCités was set up in 2007 to help young small companies find their feet in the banlieues: the troubled districts on the outskirts of Paris and other large French cities. There unemployment is high and prospects are few – so local businesses could do with a push in the right direction.

Since the notorious banlieue riots in 2005, the French government has taken a number of measures to help these troubled areas bounce back. Banks and the business community have also been called on to take action. A number of initiatives were subsequently developed, primarily by new small-scale organisations. Microfinance became a popular way to support ambitious young people in the banlieues.

Microcapital
"In many cases, a modest investment is enough to make a difference. But for traditional banks that is often not attractive enough. Financial institutions are not exactly falling over one another to move into the banlieues,” explains Bianca Fischer Lethanh of FinanCités.

"In the past two years, we have invested a total of 1.4 million euros in 30 small companies from deprived areas. That’s an average investment of around 45,000 euros per company.''

The terms are relatively easy: you need a sound business plan but no guarantor is required. The entrepreneurs have to come from the banlieue and their company must have been around for at least one year.

"We do not issue microloans. Instead we provide micro-capital," Bianca stipulates.
 
"That means investments of between 5,000 and a maximum of 100,000 euros. We also become a partner in the companies we help. After around five years on average, we step back. The idea is that the owner will buy back our share, which will hopefully have increased in value in the meantime.''

Coach
But perhaps the most important thing provided by FinanCités is not the money but an advisor.

"Sure we got our investment, but we were also helped along by a kind of business coach," recalls Sebastien Haziza of Dopad Media.

"Not only were we able to buy our photocopiers, but we could also work on our future. The advisor contributed to our business plan, thought about how we could grow and what we needed to do. You don’t get that with a standard investor: all they are interested in is getting three euros back for every euro they put in.''

Taking risks
Sebastien is satisfied with how everything has gone.

"We are now thinking about going global. Expanding into Spain, Belgium and the Netherlands for example. Why not? We have a great concept. Students can photocopy for free – which saves them a lot of money – and companies can advertise to a well-defined target group. Universities also receive a guarantee: even if there are no advertisers, we will keep the machines running. That’s the risk we take. But so far we’ve had no shortage of ads.''