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Investing in small and growing businesses is key to reducing post-harvest loss and making nutritious foods more accessible

Posted By Teale Yalch, GAIN, Friday, October 11, 2019

The rationale for a nutrition focused organization like GAIN to become a member of an entrepreneurship support network like ANDE might not be immediately obvious, but the fact is that SMEs are estimated to deliver around 70% of the food consumed in low income countries and if we are going to succeed in improving diets and tackling malnutrition, we must do more to support the growth of small businesses, who are key to ensuring that nutritious, safe food is more available and affordable for local populations. 

One key area of action to ensure greater availability of nutritious, safe food is to reduce post-harvest loss.  According to the Rockefeller Foundation, small farmers and retailers currently lose 45% of their vegetable harvests, 35% of their fruit harvests, and 25% of their incomes due to post harvest losses each year.

Small businesses have a key role to play here.  Take for example, Coolins FoodBank, located in Orlu in South East Nigeria. Coolins Foodbank is a food logistics and processing business owned and operated by Collins Edwards and his wife Oluchi. Last year, with support from GAIN, Coolins Foodbank adopted a solar powered cold storage facility that they have placed within a local market. Local farmers and market retailers pay a fee to store their fresh produce in the cold room.  One of Coolin’s customers, Love Maduka, who sells fresh fruits and vegetables to customers in the local market, no longer loses the estimated 50% of her tomatoes through spoilage and the subsequent revenue because of the access to cold storage that Coolins Foodbank provides. 

Through its work supporting the growth of nutritious food SMEs, and more specifically businesses like Coolins Foodbank through its Postharvest Loss Alliance for Nutrition (PLAN), GAIN has identified many examples of innovative small companies producing and distributing nutritious food with real potential to grow. 

However, they are all too often stopped in their tracks because they cannot attract the financing they need to grow as they are perceived to be too small or too risky by traditional sources of lending like banks.  In the post-harvest loss context, this means they are not able to procure improved post-harvest technologies like refrigerated trucks and processing equipment needed to reduce loss of perishable nutritious food.

The Business and Sustainable Development Commission, in a study of the market potential of food-related SDGs, estimated that reducing food loss and waste could be worth an estimated $155 – $405 billion a year by 2030.  Although donors and investors are starting to wake up to the opportunities, the options for impact minded investors interested in investing in nutrition and improving food systems are currently limited.

I attended the ANDE Network Annual Conference a couple weeks ago in Virginia and was surrounded by like minded organizations that were supporting SMEs or as ANDE calls them, Small and Growing Businesses (SBGs) with a range of technical and financial assistance. There were also a variety of impact investors like Alphamundi and development investors like the Overseas Private Investment Corporations (OPIC) that are including gender, jobs and environmental sustainability in their investment criteria, but nutrition indicators were no where to be found.

To help fill this gap, GAIN will be introducing a Nutritious Food Financing Fund at the end of the year, which will offer a unique platform to direct investments into nutritious food SMEs, including those involved in processing, distribution and storage of nutritious food.  Our goal is to demonstrate their potential to achieve both a financial return and greater nutrition impact and to highlight important criteria for investors interested in investing with a food system lens. Every company considered for inclusion in the fund will have their nutrition potential vetted by GAIN and companies that are good candidates for reducing food loss will be prioritized.

Of course, we need to remember that finance is only one constraint that small businesses face.  There is little point in enabling access to finance if they still have to contend with burdensome policy environments, poorly functioning infrastructure and lack of management capacity, skills or support networks.   Greater collaboration between sectors to address these challenges collectively remains crucial to overall success.

Investing in the growth of small companies like Coolins FoodBank is one of the most sustainable and scalable ways to make nutritious foods more directly available and improve diets, especially among the poor. It is also an opportunity to invest in a new generation of innovative, well-managed and competitively positioned SMEs that are transforming food value chains and selling safe, nutritious food to communities most vulnerable to malnutrition.

Tags:  Acceleration  accelerators  Access to Finance  Africa  Agriculture  Business Models  capacity development  East Africa  emerging markets  entrepreneurship  impact investing  impact investment  innovation  Investors  missing middle  small and growing agrobusiness  supply chain  sustainability 

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First Steps: How Early Adopters Climb the Solar Energy Ladder

Posted By Michael Leen, FINCA International, Tuesday, October 8, 2019

FINCA International’s research team, in collaboration with a consultant from MIT D-Lab, just published a white paper that looks at how and why early adopters used entry-level solar products to make their initial steps up the energy ladder. All study participants were customers of BrightLife, a social enterprise by FINCA International in Uganda.

The first steps in a customer’s journey to product adoption, especially in nascent sectors like solar energy, are so important. Early adopters must overcome significant barriers, including cost, lack of familiarity and the pull of old habits. Understanding the experiences and motivations of early adopters opens a window into this critical moment in the market’s inception and can inform further efforts to build demand for solar as well as other emerging products that address basic needs for the world’s poor. It is also central for understanding the social impact of these products, because turning potential benefits into real-life improvements depends on the customer behaviors that surround them.

You may view the executive summary and full-length white paper here: https://finca.org/insights/how-early-adopters-climb-the-solar-energy-ladder/

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Tags:  Research  Social Enterprise  Social Impact 

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Can entrepreneurs in low-income housing lead the way in disrupting the housing sector?

Posted By Habitat for Humanity, Thursday, September 12, 2019
Updated: Thursday, September 12, 2019

Can entrepreneurs in low-income housing lead the way in disrupting the housing sector?

By Jennifer Oomen

Entrepreneurs have long looked at inherent, systemic problems and turned them into market opportunities. The recent surge in innovation in the fintech space is a perfect example of how entrepreneurs are creating innovative products that enhance the financial system. Moreover the scaling up of effective , efficient, client—responsive financial services opened new opportunities for thousands of customers in the low income segment.

This July fifty entrepreneurial engineers, impact investors, mentors and industry players gathered at the India Habitat Centre in Delhi to hear eight startup teams pitch their innovative ideas. This was the third iteration of Habitat’s ShelterTech Accelerator which is focused on entrepreneurs innovating in the low income shelter space first  in Mexico, followed by Kenya and most recently in India.

What these startups were pitching was a new way to look at an established industry—shelter. More than promoting their products and services, they were selling the viability and potential of shelter solutions for the low-income segment. A sector often forgotten in the entrepreneurial ecosystem, shelter also encompasses water, sanitation, materials, infrastructure, energy access, on-site project management, and finance, moving way beyond the traditional idea of walls and roof.

Like financial services, housing is also a heavily regulated industry, dominated by a limited number of established players.  And low income shelter is a sector ripe for disruption. Shelter is a critical sector for a country’s development and growth. In India, low-income housing markets require at least US$2 trillion of investment by 2022 to fulfill shelter needs. Not only is the housing construction sector a known indicator of economic activity, it is also a major source of income: three out of every ten rural laborers in India are in construction, employing millions of low income Indian workers.

What will it take for the industry to innovate and evolve? Thought leaders have been calling for innovative and disruptive new players that can steer the sector towards a reduced carbon footprint, providing more sustainable, less water-intensive, less extractive solutions. Large multinational companies and developers are slowly  innovating in response to this.  However, opportunities still abound for entrepreneurs to disrupt existing methods and tap the US$2 trillion Indian market with unique solutions.

Take Aditya Shukla, the founder of Saltech, a company that transforms mixed plastic and construction waste into construction products. As a fresh graduate in engineering, he was struck and appalled at the amount of plastic waste produced in his community in Gujarat, India, littered everywhere with plastic bottles. Now, Aditya is prototyping paver tiles and floor tiles out of industrial, construction and plastic waste. “This isn’t just about making a great paver or floor tile which can add value to a community, it was also about helping India deal with the plastic waste challenges to create something that adds value to people’s lives.” 

As it is often the case, there are market realities. Successful entrepreneurs will agree: the opportunity in the market is not only about coming up with a new product, but understanding the market needs, preferences, capacities and pain points. Being able to see through the complexities and find solutions that can address such market opportunities will help to evolve the industry.  They are able to take into account household’s main concerns, the costs, but they also bring in new elements, making them not only accessible—particularly through disruption in last mile distribution--but aspirational.

After more than 40 years of operations in over 70 countries globally, Habitat for Humanity created the Terwilliger Center for Innovation in Shelter, an incubator of ideas and innovations to address the market’s most pressing gaps and opportunities. The Terwilliger Center aims to support bring in innovations into the affordable housing market to offer viable alternatives or complement what currently exists in the ecosystem. Habitat’s ShelterTech network of startups and innovators from global geographies are addressing the largest challenges and opportunities in the low-income housing segment. 

This initiative derives from the belief that low-income consumers play an essential role in building thriving economies, and their market inclusion has a direct impact towards achieving the Sustainable Development Goals, particularly goal 11--sustainable cities and communities. Habitat and the ANDE network are bringing the ecosystem together this September to highlight the entrepreneurs working in this space , hear their pitches and provide them with ecosystem mentorship, investment and support to scale their ideas at the Asia Pacific Housing Forum Innovation Awards in the construction innovation category.

 

Click here to learn more about the "Celebrating Innovation: Shelter Innovation Pitch Night & Networking Reception" >>

When: Tuesday, September 17th, 2019
Time 6:00 PM - 9:30 PM
Where: The Campus, Grand Hyatt Erawan (Bangkok, Thailand)

Event details: http://bit.ly/2mc2ArH

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*Jennifer is the Associate Director of Market Systems & Entrepreneurship in Asia-Pacific for Habitat for Humanity’s Terwilliger Center for Innovation in Shelter. She has spent the last 15 years working in the shelter space in three continents applying both a human-centered and systems-based approach to shelter market challenges. She holds a MSc in Urbanisation & Development from the London School of Economics. She lives and works in Bangkok, Thailand.

Tags:  accelerators  emerging markets  entrepreneurship  inclusive innovation  social enterprise  social impact  sustainability 

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We are pleased to release the 2018 GroFin Impact Report

Posted By Shailen Neewoor, GroFin, Friday, August 16, 2019

"Famous rock musician and philanthropist Bono once remarked that impact investing is an excuse for good people doing bad deals. We would argue that GroFin is about good people doing real deals. GroFin has invested nearly $340 million in 708 small and growing businesses (SGBs) and in doing so helped them to sustain over 28,000 jobs. These deals might not hit the headlines or generate “alpha returns”, but they do deliver real impact alongside positive financial returns,” Guido Boysen, GroFin CEO.

This year we have changed the format of our annual Impact Report by adopting the Integrated Reporting guidelines. This brings GroFin in-line with global best-practice to report on how we create value by leveraging the various forms of capital at our disposal. This framework enables us to look at the business in an integrated way.

The report provides as an overview of the following:

  • GroFin’s business model and strategy
  • Our biggest accomplishments during the past year
  • The financial performance and impact generated by each of our six active Funds
  • The successes of our clients and how they are changing lives in the communities where they operate.

We are forever grateful to our clients, investors, funders, partners, and staff without whom our success and impact would not have been possible.

Visit the report website

Download the report

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Tags:  A Access to Finance  Access to Finance  Africa  Agribusiness  Agriculture  ANDE Members  ANTHOS  Base of the Pyramid  Business  Business Models  Calvert Impact Capital  capacity development  CDC  DFID  DGGF  East Africa  education  energy  entrepreneurship  finance  FINFUND  FMO  gender  Global. Development  IFC  impact  impact assessment  impact evaluation  impact investing  impact investing; gender lens investing; gender; w  impact investment  impact management  impact measurement  International Finance Corporation  Investors  Mastercard Foundation  MENA  missing middle  Open Society Foundations - Soros Economic Developm  Philanthropy; impact investing  Scale  SDGs  SGB  SGBs  SGBs; accelerators; East Africa  SGBs; small and growing businesses impact investin  SGBs; West Africa; Senegal; Africa; MENA; Entrepre  Shell Foundation  Skoll  small and growing agrobusiness  small and growing businesses impact investing  smes  social impact  Soros Economic Development Fund  South Africa  supply chain  sustainability  sustainable development  Tanzania  Triple Jump  Uganda  USAID  West Africa  Women  World Bank Group  Youth 

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Upaya Social Ventures Funds Its Latest Investments from A Recoverable Grant Pool

Posted By Heather Soehn, Upaya Social Ventures, Tuesday, July 23, 2019
Updated: Tuesday, July 23, 2019

Upaya raised $2M to expand its job-creating investments, including an innovative $1M Pool of Recoverable Grants that was used to fund its latest two investments in agribusiness enterprises.

Press Release (SEATTLE) -- Upaya Social Ventures announced the completion of its $2M campaign to double the nonprofit’s investment reach within five years. $1 million of the funds raised will support operating expenses with the balance an innovative pool of recoverable grants. The unusual fundraising vehicle will fund Upaya’s investments over the next five years in social enterprises creating jobs for the poorest of the poor.

This initiative expands on a financial innovation in the nonprofit sector – the “recoverable grant” – by pooling such grants to fuel a diverse portfolio of impact-driven investments that allow the donor to possibly recover their philanthropic contribution along with a sliver of upside.

“Upaya is excited to provide an option to philanthropists to fuel our investments in a way that can return their donations if our investments do well.” Upaya CEO Kate Cochran said. “We think this kind of structure aligns all of our interests with the ultimate success of the entrepreneurs and their jobholders.”

The $1M for operating expenses was donated by the Allen Blue and Kira Snyder Fund, a donor-advised fund. Those funds will be used for sourcing, selecting and supporting the investments. Allen Blue is the VP of Product Management and Co-Founder at LinkedIn; he also sponsored Upaya’s first accelerator program in 2017.

The $1M recoverable grant pool has been completed with a leading grant of $500,000 from The Delta Fund. Contributions from 3rd Creek Foundation, Chintu Gudiya Foundation, Galloway Family Foundation, Vibrant Village Foundation and the Norwegian Interhands Foundation have also been pledged.

“What is exciting about this recoverable grant pool,” said Upaya Co-Founder Sachi Shenoy in a piece written for Giving Compass, “… is that we are building on traditional philanthropy, creating additional innovative tools to help plug gaps in market-based economies, and benefit those who may otherwise be left behind.”

Upaya recently selected two companies for investment that participated in its 2018 Accelerator Program focused on the agribusiness industry in India. ZooFresh Foods and Laymen Agro, have received their first tranches of funding and became the first investees to come out of the recoverable grant pool.

ZooFresh Foods is a social enterprise based in Odisha, India that connects smallholder farmers with under-served markets to eliminate waste, increase farmer incomes, and enhance consumer access to local meats. Laymen Agro is a dairy company that brings village-fresh products from the rural Tamil Nadu region in India to urban kitchens while ensuring the majority of the consumer's expenditures goes back to the rural economy. Both companies share Upaya’s mission to create dignified jobs, or drastically improve incomes and livelihoods, for people living in extreme poverty.

“Expanding our reach through this pool of recoverable grants is just the beginning,” says Kate Cochran, CEO of Upaya. “We look forward to continue blending the boundaries of both philanthropy and impact investing to have greater impact than ever before.”

Having honed its approach over eight years and 16 investments, Upaya is planning to expand its reach. The pool of recoverable grants will enable Upaya to double its average annual number of investments, improving the returns from its portfolio through diversification.

About Upaya Social Ventures
Upaya Social Ventures (Upaya) creates dignified jobs for the poorest of the poor by building scalable businesses with investment and consulting support. Since 2011, Upaya has supported 16 small and growing businesses in India with investments and expertise, and those partner companies have created more than 13,000 lasting, dignified jobs. With offices in Seattle, Washington and Bangalore, India, Upaya is committed to a goal of helping its partners create employment opportunities in the world’s most difficult-to-reach regions and industries.

 

Tags:  fundraising  Grants  impact investing  impact investment  Philanthropy  Philanthropy; impact investing  Social entrepreneurship  social impact  Upaya Social Ventures 

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Calling All Business Service Providers- DEADLINE EXTENDED

Posted By Mark Sevier, Feed the Future Partnering for Innovation, Monday, July 15, 2019
Updated: Tuesday, August 13, 2019

The deadline has been extended! Does your business provide capacity building services to agribusinesses in sub-Saharan Africa? Want to do well by doing good? Support women entrepreneurs in Africa! Learn more and apply via the link below.

https://www.partneringforinnovation.org/funding-opportunities-1

 

 

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Clinton Giustra Enterprise Partnership, Marriott International, Avendra, and Walmart Launched a Local Sourcing Assessment in Puerto Rico

Posted By Gabriela Millard, Clinton Giustra Enterprise Partnership, Thursday, June 20, 2019

At a meeting of the Clinton Global Initiative (CGI) Action Network on Post-Disaster Recovery hosted by President Bill Clinton and Secretary Hillary Clinton, the Clinton Giustra Enterprise Partnership (CGEP) announced a commitment to launch an assessment in Puerto Rico that would evaluate feasibility to increase sourcing from local farmers, connecting new customers and improving incomes for farmers in the region. Marriott International, Avendra, and Walmart have already committed as partners for this project, supporting the assessment and committing to source products meeting quality and price standards once the pilot has begun.

The commitment aims to provide a boost to Puerto Rico’s agricultural sector after Hurricane Maria hit the island in 2017. In recent years, the agricultural sector has been growing at a 3 to 5 percent rate annually – however Hurricane Maria impacted approximately 80 percent of the island’s crop value and caused estimated losses to crop, livestock production and infrastructure of more than $2 billion. Before Hurricane Maria, 85 percent of Puerto Rico’s food was imported – since Maria that figure has jumped to 95 percent.

This assessment will chart agricultural capacity across the island, identifying both potential crops that could be sourced, tropical fruits like watermelon and pineapple, and companies that can serve as buyers for these products. Following research and feasibility analysis, CGEP will work to establish a social business that will purchase these crops and source them to buyers – creating new demand and higher income for smallholder farmers on the island.

CGEP, an initiative of the Clinton Foundation, brings twelve years of building social businesses, including supply chain building in the agricultural sector. “Our social businesses have had significant positive impacts on the lives of farmers in El Salvador, Colombia, and Haiti,” said Frank Giustra, co-founder of CGEP. “I am excited to see our successful model being assessed for other regions, like Puerto Rico, where I hope we can help bridge the gap between farmers and buyers.”

Steve Contos, Senior Vice President, Caribbean and Luxury Portfolio Caribbean and Latin America for Marriott International added: “We’re proud to support Puerto Rico’s farmers and these efforts, and our partnership with CGEP reinforces our longstanding commitment to the island and to empowering the local community. Marriott’s sustainability and social impact platform, Serve 360, also aligns with this project and our global goal to locally source 50 percent of our produce, in aggregate, by 2025. It’s a win-win.”

“We are excited to be a part of this CGEP effort and see it as a foundational building block toward a better supply chain in this region, “said Patrick Poncet, Vice President, Caribbean, Mexico and Central America, Avendra. “As a leading procurement and supply chain services company, this initiative provides us an opportunity to lend our expertise and collaborate with key stakeholders across the value chain to deliver a locally-focused, effective solution.”

Walmart brings both support and years of experience working with a network of local farmers to the partnership. “We are very pleased to be part of CGEP's efforts because our commitment of more than 25 years to Puerto Rico and the well-being of its communities is directly related (aligned) to the organization’s objectives. Currently, Walmart Puerto Rico is working very hard to increase the annual million-dollar investment in products harvested on the Island to contribute to the development of the agricultural industry and, therefore, promote job creation and greater local economic activity," said Iván Báez, Director Public Affairs & Government Relations.

The assessment and potential agribusiness will build on CGEP’s expertise in building social businesses that help smallholder farmers and fishers around the world, including in Haiti, El Salvador, and Colombia. In El Salvador for example, purchasing by partner buyers from local farmers has increased by over $7 million since launch of CGEP social business in 2014. CGEP builds social businesses to generate social impact and financial returns by addressing market gaps in developing countries’ supply chains. Through this model, CGEP seeks to help people work themselves out of poverty.

The commitment was announced Wednesday, January 30 at the CGI Action Network on Post-Disaster Recovery, which brings together leaders from government, business, and civil society to make commitments to help communities impacted by the 2017 hurricane season. At the meeting, participants discussed the current recovery efforts in the region, progress to date, ongoing challenges, and made Commitments to Action – specific and measurable projects that address critical issues such as food security, access to healthcare, small business support, sustainable tourism, and renewable energy.

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About the Clinton Giustra Enterprise Partnership

The Clinton Giustra Enterprise Partnership (CGEP) is a social business builder that brings entrepreneurial solutions to global poverty – building from scratch, investing start-up capital, and managing agribusinesses that work with smallholder farmers and fishers. CGEP’s agribusinesses provide sustainably-sourced, high quality local products that meet buyers’ demand at competitive prices and help improve the livelihoods of farmers and farming communities by improving agricultural productivity, creating job opportunities, and facilitating long-term linkages to high value markets.

About Marriott International

Marriott International, Inc. (NASDAQ: MAR) is based in Bethesda, Maryland, USA, and encompasses a portfolio of more than 6,900 properties in 30 leading hotel brands spanning 130 countries and territories. Marriott operates and franchises hotels and licenses vacation ownership resorts all around the world. The company also operates award-winning loyalty programs: Marriott Rewards®, which includes The Ritz-Carlton Rewards®, and Starwood Preferred Guest®. For more information, please visit our website atwww.marriott.com(link is external), and for the latest company news, visitwww.marriottnewscenter.com(link is external). In addition, connect with us on Facebook and @MarriottIntl on Twitter and Instagram.

About Sustainability and Social Impact at Marriott International 

Marriott International embraces its global responsibility and unique opportunity to be a force for good. Guided by its sustainability and social impact platform, Serve 360: Doing Good in Every Direction, Marriott is committed to making a positive and sustainable impact wherever it does business. While integrating sustainability across its value chain and mitigating climate-related risk, the company is working to reduce environmental impacts, build and operate sustainable hotels, source responsibly, advance human rights, and create opportunities for the communities where we operate. To learn more about our efforts and our 2025 Sustainability and Social Impact Goals, visitmarriott.com/serve360(link is external)and follow @MarriottPOV onTwitter(link is external).

About Avendra

Avendra is North America’s leading hospitality procurement services provider. Our supply chain management solutions are tailored to our clients’ business strategies and deliver benefits beyond great savings. We combine years of procurement expertise, purchasing power, services and software to help customers impact the bottom line, improve operational performance, and better serve guests. Avendra is headquartered in Rockville, Maryland and has regional offices throughout North America.

About Walmart

Wal-Mart Stores, Inc. (NYSE: WMT) helps people around the world save money and live better - anytime and anywhere - in retail stores, online, and through their mobile devices. Each week, nearly 260 million customers and members visit our 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2016 revenue of $482.1 billion, Walmart employs more than 2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visitinghttp://corporate.walmart.com(link is external)on Facebook athttp://facebook.com/walmart(link is external)and on Twitter athttp://twitter.com/walmart(link is external). Online merchandise sales are available athttp://www.walmart.com(link is external)andhttp://www.samsclub.com(link is external).

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We are looking for additional ecosystem partners across the value chain to join or fund our work in Puerto Rico. We are currently raising $250,000 that will directly fund farmer capacity building and pilot activities involved with setting up the agribusiness.

 


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Tags:  Agriculture  Latin America  small and growing agrobusiness  Social Entreprenuership  supply chain 

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An Impact Investment in an African SME, from Start to Exit

Posted By Emily Ziethen, RENEW Investment Advisors, PLC, Thursday, June 20, 2019

A wise investor once gave me a piece of advice. To paraphrase, he said, “Any idiot can invest money, but few know how to get it back.” When I started investing, I used to get excited about closing deals and reaching the point where capital exchanged hands. After working for months (sometimes even years) on a deal that ended with signed legal agreements and wired funds, I felt like we had finally accomplished something, and as such, would make a big deal about this moment. Thinking that this was the ultimate indicator of success, we’d pour ourselves drinks, take selfies, and issue a press release to mark the momentous occasion! But, in the back of my mind as we were celebrating, the wise investors’ advice still rang true. Soon after the close, we would get swept into portfolio management, the roller coaster of entrepreneurship and doing business in frontier markets: a game not for the faint of heart, especially if you invest in startups and early-stage companies like the ones we back in Africa. Now, seven years later and on the other side of the investment equation with a lot more grey hair and wrinkles around my eyes, we had our first exits. Reflecting on the journey, I thought it might be helpful to share a few observations from our experience investing in a small and medium enterprise (SME) from start to exit.

The first observation is about clarifying the importance of exits. Most investors plan their exits before they invest, using tools like put options, drag-along and tag-along rights, etc. But many of the companies we meet, screen and train in our Investing 101 for companies do not understand exits or why their investment partners might want to exit - even larger companies who are already in discussions with serious investors. We have found that while planning for an exit is important, explaining an exit is critical - and not just to the target company, but to their lawyer, their accountant, their family members, government stakeholders, and pretty much everyone that is within earshot of the deal.

The challenge is that most stakeholders get excited about closing, as I used to. Government agencies report deals closed and FDI attracted in Africa as an indicator of economic growth and success. The development community, also a significant stakeholder which hires firms like RENEW to help educate and invest in SMEs in Africa, love seeing capital come into local businesses. And these are important indicators to measure and track, but so few projects last long enough for the real magic moment, which is usually five years down the road when it happens and not immediately at closing. And thus we are left with a situation where many companies in Africa, especially social entrepreneurs and SMEs that struggle to attract capital, do not understand the true importance of an exit. So let’s explain.

If closing an investment is akin to the start of the game, an exit is when you actually score a goal. I have found that the misunderstandings around exits hurt companies and countries, most notably when the critical time comes to begin exiting an investment. Often this is because the business of investing is a bit of a mystery. I believe there should be an entire training for non-finance stakeholders just on the importance of exits. While the idea that investors seek to make money is intuitive to most, the way an equity fund works is relatively new. It is an unfamiliar concept to many that a fund manager has a fixed period of time to find and invest the money they raised into good companies, and then recover that money in a fixed amount of time with a great return. And, while I believe a closed-end equity fund structure in Africa isn’t the best structure for the investment landscape of frontier markets, it is a common structure for equity investors, and one that stakeholders need to understand so they can work with it and attract more funding to their country. The more equity a country and a company attracts, often the better positioned it is for growth.

 

Why are exits good? A good investor that builds a track record of successful exits attracts more capital and can make more investments. Companies in which investors exit often attract more capital, grow, create more jobs, pay more taxes, and provide greater value to customers. Countries where investors realize exits attract more capital because investors see that others have done it and local businesses benefit from this reputation.

So exits are not just something that needs to be planned before you close an investment, but something that needs to be discussed regularly with multiple stakeholders throughout the life of the investment and, just as much, projects that seek to leverage private investment to achieve development objectives like the Sustainable Development Goals (SDGs).

Entrepreneurs should understand that an exit by an investor is not a divorce but a graduation; hopefully a hand-off to the next level, be it to a larger investor, a strategic partner, or back to the owners themselves. Parties should be thrown for exits. Governments should know that an exit from their country is an indicator that their country is conducive to sustainable investing. They should give out awards to funds that exit their investments, because that event alone will attract the interest of serious investors more than any roadshow they do around the world. And development partners should design private sector development projects with timeframes long enough to see exits and chalk those up as major wins that resulted from their support.

Since 2012, RENEW has been operating in East Africa, testing and perfecting an investment model that gets capital into SMEs trapped in the missing middle, helps them scale up and then gets that capital out with a good financial and social return for investors. After seven years of investing in the East African region, I am pleased to say that SME investing can be successful and exits are possible. I hope we see many more exits in the months and years to come, and I hope all stakeholders cheer, not just investors, when an exit happens. It’s the real score in the sport of investing and also enables the impact we are also seeking to achieve as success begets more investments targeting such goals as job creation by SMEs in East Africa.

About the Impact Angel Network and RENEW

Members of the Impact Angel Network seek to realize both social impact and financial returns through investments in small and medium enterprises (SMEs) that are engines of economic growth and job creation in Africa but that often lack capital due to their size. IAN members believe that targeting employment through SMEs, dollar-for-dollar, can help reduce poverty in a more sustainable way than charity.

RENEW, with its largest office in Addis Ababa, Ethiopia, manages the IAN’s investment operations and provides investment advisory and consulting services in support of its investments. RENEW’s work in Ethiopia was piloted with USAID and is currently undertaken with financial support from the Government of Canada provided through Global Affairs Canada for a project entitled Accelerating Business Growth (ABG). This project targets sustainable job creation for low-skilled workers, including women and young adults, through a dynamic and growing small and medium business sector in Ethiopia.


To find out more about RENEW or the IAN, contact us at renew@renewstrategies.com, follow us on Twitter@RENEWLLC or find us on Instagram @impactangelnetwork. Be sure to check out our upcoming events, including our upcoming Econ-Tourism Trip.

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Tags:  Access to Finance  Africa  East Africa  impact investing  SGBs; accelerators; East Africa  Social entrepreneurship  sustainability 

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Acumen invests $876,000 USD in Acceso Colombia, a local agribusiness focused on improving incomes of smallholder farmers through end-to-end value chain support and secure market linkages

Posted By Alethia Kang, Clinton Giustra Enterprise Partnership, Wednesday, June 12, 2019
Updated: Wednesday, June 12, 2019

Acumen announced today an $876,000 USD investment in Acceso Oferta Local – Productos de Colombia (“Acceso Colombia”). Based in Colombia, Acceso Colombia works with smallholder farmers in the Andean and Caribbean regions to source fruits and vegetables and sell to national retailers and food service companies including Grupo Éxito, Jeronimo Martins, Olímpica, and Sodexo. This is the fifth investment for the Investing for Peace Fund, a joint effort between Acumen and the United States Agency for International Development (USAID) to promote private investment in social enterprises to catalyze economic growth in Colombia’s conflict-affected regions.

Acceso Colombia aims to improve farmers’ incomes and lift them out of poverty through establishing secure, consistent markets for their products. Among Acceso Colombia’s network are farmers who are displaced or victims of conflict, Afro-Colombians, and women. Acceso Colombia provides technical assistance to farmers; purchases their products at fair prices; operates multiple warehouses for product storage and processing; and plans and manages all logistics routes for deliveries to its clients. Acceso Colombia also supported the implementation of several community processing centers to provide livelihood opportunities to local communities including farmers’ wives, single mothers who are heads of household, and unemployed youth. These processing centers are run and owned by the community. Services provided include washing, processing, and packaging of products. Being market-driven, Acceso Colombia provides its clients with quality assurance and sustainably sourced local products, contributing to local economic development. Acceso Colombia has positively impacted more than 1,200 farmers to date and purchased over 12 million pounds of produce in 2018.

Acceso Colombia was established in 2015 by the Clinton Giustra Enterprise Partnership (CGEP), an initiative of the Clinton Foundation, that builds social agribusinesses to bring entrepreneurial solutions to global poverty. CGEPbuilds from scratch, invests start-up capital, and manages agribusinesses that work with smallholder farmers. In the last five years, CGEP has built businesses in Colombia, El Salvador, and Haiti and is currently exploring replication in several new geographies. CGEP will be bringing to the market several additional high impact investment opportunities over the next few years. Acceso Colombia’s early investors were CGEP and Fundación Carlos Slim, who were interested in testing a pioneering agribusiness approach to poverty alleviation for smallholder farmers.

Colombia has made considerable strides in reducing poverty and extreme poverty; however, there remains a persistent gap between urban and rural areas As recently as 2017, census research has demonstrated that 36 percent of Colombians in rural areas are still living in poverty, with the extreme poverty rate in rural areas nearly four times that of urban areas. Smallholder farmers in rural areas face challenges in accessing adequate tools and quality inputs like seeds to improve their yields and crop quality. They also have limitations in accessing secure markets due to working capital constraints, lack of information about formal markets, and many levels of intermediation with little value being returned to them. Acceso Colombia first secures purchase agreements with buyers that provides for favorable prices to farmers; it is then able to purchase farmers’ produce at fair prices. Acceso Colombia’s model showcases an innovative, end-to-end approach to delivering value to smallholder farmers that can be replicated in other geographies.

“Acceso Colombia’s is playing a critical role in building local value chains and connecting rural Colombia with strong, national markets. It is positively improving the incomes of farmers as well as surrounding communities in a sustainable way. Acumen is proud to support Acceso Colombia,” said Virgilio Barco, Acumen’s Latin America Director.

“We are excited for Acceso Colombia’s new partnership with Acumen. Acumen shares our goal of transforming value chains with smallholder farmers using a sustainable, market-based model, and we look forward to growing the business and its impact together,” said James Jenkin, CEO of CGEP.

“We are pleased about Acumen’s investment in one of our first agribusinesses. Our ability to attract investment capital confirms that our unique model works and is the final step in achieving proof of concept after years of testing and building. Building agribusinesses not only creates social impact but is a sustainable, scalable, and replicable solution for smallholder farmers,” said Frank Giustra, co-founder of CGEP.

The Investing for Peace Fund directs capital and debt investments through Acumen into early-stage companies that demonstrate the capacity to have widespread impact on the country’s marginalized, poor rural populations. This investment will be used to support Acceso Colombia’s growth, through investment in working capital, driving increased scale, and improving operational efficiency to build a robust platform for long-term sustainable growth. This will be the basis for extending its operations into post-conflict regions in the future.

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About Acumen

Acumen is an impact investment fund with a vision to help build a world beyond poverty through investing in companies that deliver critical goods and services in health, energy, agriculture, and education. Acumen has invested more than $110 million of patient capital in more than 110 mission-driven businesses in South Asia, East Africa, West Africa, and Latin America, that have collectively served more than 250 million customers. Acumen has teams on the ground in India, Pakistan, Kenya, Ghana, Colombia, London, San Francisco, and New York, and aims to build strong local structures that are deeply interconnected, with shared goals and values.

About Acceso Colombia

Acceso Colombia works with smallholder farmers in the Andean and Caribbean regions to source fruits and vegetables and sell to national retailers and food service companies including Grupo Éxito, Jeronimo Martins, Olímpica, and Sodexo. Acceso Colombia provides technical assistance; purchases farmers’ products at fair prices; operates multiple warehouses for product storage and processing; and plans and manages all logistics routes for deliveries to its clients. Acceso Colombia has worked with more than 1,200 farmers to date.

About the Clinton Giustra Enterprise Partnership (CGEP)

CGEP is a social business builder that brings entrepreneurial solutions to global poverty. CGEP builds from scratch, invests start-up capital, and manages agribusinesses that work with smallholder farmers and fishers. CGEP improves the livelihoods of farmers and farming communities by improving agricultural productivity, creating job opportunities, and facilitating long-term market linkages. CGEP has impacted more than 13,000 farmers and farm workers directly, and more than 33,000 people including their families.

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AV Ventures' Investments Catalyze Ghana Poultry Industry

Posted By Heather Bateman, USAID, Tuesday, June 4, 2019

AV Ventures is pleased to announce two new investments in Ghana: G. I. Nyame Aye Awie Ampa Limited (GINAAAL) and Golden Link Savings and Loans Limited. AV Ventures, a subsidiary of ACDI/VOCA, is an impact investor providing mezzanine and revenue-based debt to small and growing businesses (SGBs) in developing countries. AV Ventures promotes markets in which business owners, smallholder farmers, and communities are empowered to succeed in the global economy. 

AV Ventures has partnered with the ongoing USDA-funded Ghana Poultry Project, implemented by ACDI/VOCA, and collaborates closely on pre- and post-investment support, poultry market systems development, and fostering other private and public local partnerships.

New Investments, Expanded Impact

The first of AV Ventures’ new investments is GINAAAL, a commercial poultry farm producing eggs for the Ghanaian market. Urbanization, rising per-capita income, and an increasing population are driving significant increases in the demand for chicken meat and table eggs in Ghana where demand outpaces domestic supply—creating opportunities for local poultry farms to expand and fill this gap. AV Ventures’ investment will allow GINAAAL to increase its capacity by bringing an estimated 7 million more eggs to market annually. The investment is also expected to generate greater economic and social impact through:

-  Increasing employment by an estimated 20 percent
-  Improving incomes of its egg retailer network, over 90 percent of whom are women
-  Providing access to markets for over 900 smallholder soy and maize farmers in Ghana, from whom GINAAAL sources its feed ingredients

Further, AV Ventures’ revenue-based financing helps to pioneer a new approach to SME finance: by sharing risk with the entrepreneur and tying repayments to success of the company’s future sales, while allowing the entrepreneur to retain full ownership.

“AV Ventures sees enormous potential for agriculture sector growth in Ghana, particularly in its growing poultry industry. Given its importance in rural Ghana, there is huge potential to catalyze inclusive growth by investing in this sector,” said Geoffrey Chalmers, Managing Director of AV Ventures LLC. 

Golden Link Savings and Loans, AV Ventures’ second new investment, is licensed by the Bank of Ghana as a specialized deposit-taking institution, offering savings, loans, checking, deposit, mobile banking, and remittance services to its customers – many of whom operate in the informal economy. Golden Link has developed loan products specifically for poultry value chain businesses. AV Ventures’ investment creates an on-lending facility for Golden Link to significantly expand its poultry loan portfolio, thereby improving access to finance to smallholder poultry farmers, informal entrepreneurs, and micro-enterprises in Ghana’s poultry value chain. Providing the financing in local currency allows Golden Link to expand without foreign currency risk.

“[AV Ventures’] support is already acting as a catalyst for our growth to the next level,” stated Dr. Emmanuel Owusu, Managing Director of Golden Link.

More About AV Ventures

As a subsidiary of ACDI/VOCA, AV Ventures leverages ACDI/VOCA’s broad platform of expertise and services, including:

-  A global network of 1,200+ staff implementing market systems development programming in 20+ countries
-  Technical expertise in agriculture, financial services, business growth, gender, youth, and more
-  Strong partnerships with local governments, funders, local communities & customer bases, and other international and local private companies
-  Pre- and post-investment advisory support, drawing from our global networks

AV Ventures and ACDI/VOCA are proud members of the Aspen Network of Development Entrepreneurs (ANDE), Convergence, the INGOs in Impact Investing Network, and the USAID INVEST Network

For more details about AV Ventures or these recent investments, please contact Geoffrey Chalmers, Managing Director for AV Ventures, at gchalmers@av-ventures.com

Tags:  Africa  Agriculture  entrepreneurship  finance  impact investing  impact investment  innovative finance  NGOs  SGBs; small and growing businesses impact investin  smallholder farmers  smes  West Africa 

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