The eighth agency in the community is the Capital Fund Agency. The agency forms part of the community’s Economic Department. The agency’s primary objectives are to receive investment from participants and work with other agencies in the Economic Department, and others in the community, to maximize investors’ return.[1]

Among other investments, the agency provides agencies in the Urban Planning Department with 20% down payment needed before the agencies can seek additional financing from Agency 9 – the Commercial Bank Agency. The advancement of the down payment is done after approval from the board of trustees.

The roles that the Capital Fund Agency performs to achieve its main objective are participant-centered. Participants initiate engagement with the agency through its automated system, which advices on how much a participant should invest and what they can expect from their investment.[2] Village presidents may interact with participants for further assistance where the system is unable to do so. In addition, the village presidents give their feedback on the system’s weaknesses and required improvements to the agency president, who has the mandate to make adjustments as required and set overall agency strategy.

In some instances, the Capital Fund Agency’s roles do not need direct participant involvement. In such instances, the agency’s presidency performs these roles, assisted by the agency’s system.

The roles of the agency are categorized into either core or coordinated. The agency performs core roles without coordination with other agencies. On the other hand, it coordinates with other community agencies to perform other roles, as is detailed below.

Core Responsibilities

As mentioned in the introduction, the Capital Fund Agency acts as the primary receiver of participants’ investments in the community. The agency performs a number of duties directly drawing from this responsibility:

Receive invested funds from participants
Invest the participant-invested funds in the Urban Planning Department’s agencies

Receive invested funds from participants

The Capital Fund Agency receives funds from participants, once they have been cleared by the Human Relations Agency and other relevant agencies to join the community. The agency provides participants with information on how they can invest and what to expect from their investment. The agency monitors participants’ investment trends and routinely advises them on how they can get the best out of the community.[3]

Investing participants’ investments

The Capital Fund, after receiving investments from participants, invests them in different areas. The bulk of this goes to the two other agencies in the Economic Department, the Commercial Bank and Investment Bank Agencies. The agency is a key part of the Urban Planning Department agencies’ acquisition of land, facilities, equipment, and buildings. The agency puts up 20% of the funds needed for any acquisition, with the necessary approvals by the board of trustees. This is done after a thorough assessment of the proposed development or procurement, sometimes with the input of other agencies. For instance, the procurement of medical equipment will involve consultations between Agency 24 – Assets Management, Agency 6 – Health, and the Capital Fund to see the viability and necessity of an acquisition. Through all this, the agency focuses on providing the investor with the highest possible return. In the community setting, where information is near perfect and financial risk extremely low, the agency is able to give attractive returns of up to 12%. It is also able to leverage wealth, up to a hundredfold.[4] The agency is obligated to safeguard the participants’ investments.

Coordinated Responsibilities

The Capital Fund Agency coordinates with several agencies in the community as part of its objective to maximize return on investment. This coordination is guided by its position in the Economic Department, the Social Integration and Support Vertical, and with other agencies with which it shares interests.

Horizontal coordination

The three agencies in the Economic Department together work to actualize the community’s economic system. The Capital Fund Agency receives investment and channels it to the two community banks (Commercial and Investment) for investment. The banks do this through the issuance of loans and other forms of financial assistance to businesses and to other agencies.

Vertical coordination

The Capital Fund Agency liaises with Agency 1 – the Human Relations Agency in inviting participants to invest their net worth in the community. The two agencies work to control the amount of capital available in the community through the admission of participants. In so doing, the agencies control the community’s economic direction, with input from other agencies in the Economic and Village Departments, which are all involved in participants’ entry vetting. The Capital Fund Agency liaises with Agency 4- the Life Planning Agency to update the automated system on how to best guide participants, advising them on why it is critical for them to invest and the benefits that accrue from this. The Capital Fund also provides automated training and other resources to advise participants on investment, as an integral part of life planning and successful membership in the community.

The Capital Fund Agency liaises with Agency 22 – the Public Facilities Management Agency to develop public facilities besides buildings, equipment, utilities, easements, and land management. These include the multipurpose buildings, for which the Capital Fund Agency provides development funds, while in turn receiving rent as part of its return on investment. When making an investment, the agency liaises with the Underwriting Agency to establish the risk involved and feasibility of investments.

Diagonal coordination

Beyond the vertical and department, the Capital Fund Agency liaises with Agency 24 – Assets Management Agency for the acquisition of land and housing, as part of its investment drive. The agency also liaises with Agency 17 – the Accounting Agency as Urban Department agencies down payment loan applications are vetted. The agency provides the expertise needed by Agencies 2 and 9 – the Stewardships and Commercial Bank Agencies during the entry process to help ensure that incoming participants are properly vetted.

Conclusion

The Capital Fund Agency forms the front for the Community’s Economic System. It is the point of receipt for invested funds and therefore has the responsibility to invest participants’ net worth in the most productive way possible. The Capital Fund’s duties are not strictly all about returning a profit to the investors. Additionally, the agency coordinates with others to safeguard and inculcate the community’s principles on social and economic cohesion, as well as environmental protection. The agency realizes that sustainable economic development, which the community promises participants, can only be achieved if other facets of participants’ lives are aligned.

[1] One of the key profit drivers for financial institutions is efficiency, not only in operations, but also in how easily they are able to translate deposits into credit, and vice versa. The Capital Fund will have ready investment avenues for funds received from participants thereby operating at full capacity, and being in a position to offer better return on investment than contemporary investment options (Soteriu, A. and S. Zenios. “Efficiency, Profitability and Quality of Banking Services.” Wharton Financial Institutions Center (1997): 1-28).

[2] Automated investment solutions, also known as robo-advisors, are increasingly common in the market. These systems are able to analyze a person’s information, the market, and any other factors that could affect investment and the expected return. Their advantage over human advisors is their ability to analyze large amounts of information, therefore being able to make decisions grounded in evidence, rather than gut feel or experience. The Capital Agency will use such a solution to help participants (Phoon, K. and F. Koh. “Robo-Advisors and Wealth Management.” The Journal of Alternative Investment 20.3 (2018): 79-94).

[3] Besides the vetting performed by the Human Relations Agency Capital Fund Agency runs its own vetting, which is akin to a Know your Customer (KYC) process. The process entails not only providing fraud (such as identity theft and money laundering which could be executed in the community without proper checks), but also understanding the participant better and their needs. This puts the agency in a better position to advice the participant (Rajput, V. “Research on Know Your Customer (KYC).” International Journal of Scientific and Research Publications 3.7 (2013): 1-6).

[4] Information asymmetry and imperfect information are a fixture in modern financial practice. It has a significant impact on how banks treat their customers, including heir decision on the return to offer for customers’ investment. In the absence of such a handicap, made possible by the community’s infrastructure, and higher levels of efficiency, the community is able to offer higher and more stable rates of return (Dodge, E. Principles of Economics. Open Stax, 2016)