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Why Your Best Economic Model Isn’t in Excel (It’s in Your Friends List)

We talk endlessly about ecosystems, platforms, and scaling models.

But the most resilient economy I have witnessed, especially in fragile, underfunded, post crisis contexts, was never built on capital or code.

It was built on friends.

Not networking contacts.

Not transactional partnerships.

Friends who circulate trust, share risk, absorb shocks, and keep value moving when formal systems stall.

This is what I call the circular economy of friends.

Its invisible multiplier is the Barakah Effect.

Why this isn’t “soft”

What many dismiss as relationships is formally known as social capital. When measured, it consistently outperforms purely financial inputs.

Research across development economics and social finance shows:

  • High trust networks reduce coordination and enforcement costs by 20 to 30 percent, accelerating execution without additional funding.

  • Group based microfinance and savings circles consistently report 95 percent plus repayment rates and longer participation cycles than individual loans.

  • Programs introduced through trusted community actors see two to three times higher adoption than top down rollouts.

None of this appears neatly in Excel.

But it shows up clearly in resilience, speed, and survival.

The Barakah Effect

Barakah is not mystical. It is alignment.

Alignment between intention, ethics, and relationships.

When these align, systems behave differently:

  • Opportunities arrive through people, not funnels

  • Crises are softened by community buffers

  • Momentum appears without proportional spend

Traditional metrics ask: What did we invest to get this result?

Barakah asks: What did we protect so this could happen?

Case Study 1: Peer circles outperform solo beneficiaries

In one economic empowerment pilot, two models were tested:

  • Model A: Individual grants with training

  • Model B: Small peer circles with shared accountability, light facilitation, and no extra funding

After twelve months, Model B showed:

  • Higher income stability

  • Fewer dropouts

  • Faster problem solving

Participants sourced clients, childcare, tools, and emotional support from within the circle. Dependency on the program itself decreased.

The value did not scale by adding money.

It scaled by strengthening the circle.

Case Study 2: Diaspora trust as infrastructure

Across multiple post conflict contexts, funding moved faster not because of better platforms, but because of trust loops within the diaspora.

Someone vouched.

Someone absorbed early risk.

Someone else opened access.

Formal systems followed after trust was established.

Impact lesson: Trust often precedes infrastructure, not the other way around.

Case Study 3: When metrics kill the system

A well funded initiative introduced aggressive, individual output KPIs.

What happened next:

  • Competition replaced collaboration

     

  • Knowledge hoarding replaced sharing

     

  • Short term wins replaced long term viability

     

Within a year, performance declined. Not because people became less capable, but because the social glue dissolved.

The Barakah leaked out.

What this means for how we design at EmpactUs

Economic empowerment fails when we design only for:

  • Isolated individuals

  • Output heavy dashboards

  • Scale without social cohesion

At EmpactUs, we design differently:

  • Communities before individuals

  • IKRs to set direction and intention

  • KPIs to observe health, not suffocate trust

We do not just fund or train.

We strengthen circles and protect relational capital.

The uncomfortable truth

You cannot manufacture the circular economy of friends.

You can only:

  • Design around it

  • Avoid breaking it

  • Measure it indirectly through retention, peer activation, resilience, and recovery time

The moment everything becomes transactional, Barakah exits quietly.

A practical takeaway

If your program feels like it is working beyond the model,

If results keep showing up through people, not processes,

You are not lucky.

You are already sitting inside a circular economy.

The real question is simple:

Will you protect it, or optimize it to death?

If you are building programs, platforms, or ecosystems and want to scale without breaking the social fabric, get in touch.

This is the work we do.

Source

Hammam Elmasri

Board Director

Written by Hammam Elmasri, Board Director, EmpactUs

An expert in shifting philanthropy from short-term relief to sustainable systems, Mr. Hammam specializes in designing empowerment programs for women and communities in crisis. With a background spanning AI, Web3, and crisis response.