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Three Powerful Tools for Fintech Practitioners

Posted By Jane Del Ser, Bankable Frontier Associates, Tuesday, January 16, 2018
Updated: Wednesday, January 17, 2018

By David del Ser

(Watch our video)

Since we launched the Catalyst Fund in 2015, we have helped 15 fintech entrepreneurs deploy novel approaches to bring products and services to their customers. We have distilled the successful patterns and behaviors we have observed into toolkits and posts for those considering fintech methods for their businesses, whether they be startups or established players.


At a high level, successful fintech startups adopt principles of Design, Risk Management and Product Management, and also put modern technologies like smartphones, artificial intelligence and cloud computing at the core of their value propositions. At successful fintech startups Designers, Product Managers, CEOs and Engineers reinforce each other in multidisciplinary teams to explore the overlap between what customers find desirable, what engineers can build, and what the business requires to grow.

Design

The function of Design is to represent the voice of the customer at all times to make sure a company stays centered on what matters most. Design is not a one-off process. In the spirit of customer validation, designers keep tight feedback loops with customers throughout the product development process, from early prototypes to usability testing of new features.


Through user research (UX) techniques like online surveys and one-one-one interviews, designers invest heavily during initial stages in order to know their customers like the back of their hand; what are their problems and pain points, and how can their company help? In fact, designers segment customers into personas to allow the team to constantly keep in mind different user profiles and needs.


Aesthetics matter. Designers work hard to perfect a product’s UI and its look and feel, so it can live up to the high expectations created by WhatsApp or Google. But great design goes beyond just user research and visuals during early product design stages. Successful inclusive fintech startups map out the Customer Journey and Service Blueprint in detail to fully understand the perspective of the user each time they  interact with the company.


Ultimately, great design creates trust, that elusive quality that all startups are chasing and that distinguishes them from their competitors. We’ve captured our lessons for startups to build trust with their customers through their products or services in our Design for Trust Toolkit.


Product Management

But designers can’t work in isolation; they need someone to lead the orchestra - and that’s where a product manager comes in. The PM takes a big picture view and works to ensure that designers, engineers and marketers all work towards the same goal. Crucially, she makes sure the product or service goal is backed by data and evidence. She keeps the whole process nimble through quick agile iterations focused on the activities of users, from initial onboarding to the retention phase. For example, using A/B Testing and usage analytics she captures details of how each users is interacting with every screen to inform engagement.


The effective product manager is very focused on the key metrics for the business, such as customer lifetime value or acquisition costs. She also works hard to explore the best channels to find new customers, including viral referrals and social media. As an example, our portfolio company Destacame has seen lead acquisition costs dropping to less than $3 through these types of digital channels. We explore some of the different tools and frameworks to help startups focus as they chart their journey from idea, to minimum viable product (MVP) and growth in our upcoming product/market fit toolkit.

Modern Technologies

And finally, you can’t have good fintech without the “tech” that is enabling these new approaches.


Most important are the smartphones, which run fintech apps and also act as channels to find and interact with users. For instance, several of our startups use WhatsApp to offer customer support and drive virality, communicating with users in the way they prefer. Smartphones can also be used to generate and capture user data, which is particularly valuable when targeting low-income consumers who traditionally have been anonymous. In that vein, our portfolio company Smile Identity validates and authenticates customer identities using selfies taken on their phones.


In addition machine learning and other artificial intelligence systems can improve customer value propositions and to automate internal processes like credit scoring using data from smartphones and other new sources like satellites. As an example, our portfolio company ToGarantido is exploring chatbots for sales of their insurance policies and customer support. Harvesting is using satellite data to understand credit and insurance risk with just a GPS read. Worldcover doesn’t even need customers to file a claim as their satellite systems award them automatically.


And software engineering helped Escala and Paygo Energy to automate most of their back-office processes to be responsive to their customers. It is easier and more affordable than ever for startups to leverage affordable SaaS solutions to architect their systems. Likewise, cloud computing is also a powerful technology that offers simplicity, lower costs and flexibility. There is no need to commit capital to purchase hardware and the team requires less engineering talent to keep the servers going.

Conclusion

In our experience, companies that harness the powerful combination of design, product management and modern technologies create better and more tailored value propositions. That makes for happier customers, which is what makes businesses thrive. By driving more usage, the fintech triad can create more impact in low-income populations. And digital channels and automated processes can significantly lower costs of serving customers, allowing for expansion to new markets and reducing exclusion.


Learn more by joining us for our webinar on the Catalyst Fund toolkits during the ANDE Sector Update call in January. Register here.


Tags:  Acceleration  accelerator  accelerators  Africa  ANDE Africa  Base of the Pyramid  brazil  Business Models  capacity development  early stage ecosystem  emerging markets  entrepreneurship  finance  financial inclusion  fintech  Grants Rockefeller  impact investing  impact investment  inclusive innovation  India  India; ANDE members  innovation  Kenya  Latin America  mentoring  Mexico  SGBs; accelerators; East Africa  smaholder farmers  smes  social enterprise  social entrepreneurship  social innovation  webinar  West Africa 

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CrossBoundary Energy Fund I raises $8M - First dedicated fund for C&I solar in Africa

Posted By CrossBoundary, Monday, December 7, 2015

CrossBoundary Energy today announced the first close of CrossBoundary Energy Fund I, Africa’s first dedicated fund for Commercial & Industrial solar. Over the next 18 months, the fund will deploy over $25M to build solar facilities to power African enterprises through the SolarAfrica platform.

Due to a dramatic fall in cost, solar is now a viable alternative energy source for businesses in Africa. But it needs finance to be attractive.

Across Africa, economic growth is stifled by expensive and unreliable electricity. This challenge represents an immense opportunity for investment. Matt Tilleard, co-Managing Partner of CrossBoundary observed, “Africa is undergoing an energy revolution and has become a laboratory for pioneering new methods of energy delivery. A key driver of this has been the dramatic fall in cost of solar power – down by over 80% since 2008. Solar is now often cheaper than the grid in a majority of African countries”

Jake Cusack, co-Managing Partner at CrossBoundary, noted that “For many of the businesses that drive Africa’s growth, solar power is now an alternative source of cheaper and cleaner energy. However adoption remains low due to two barriers. First, solar has a substantial upfront cost. Without financing, solar installers are typically only able to offer upfront purchase of the solar system.  This means that the customer has to pay the full cost of 25 years of electricity on the first day. Second, many customers are unfamiliar with solar and reluctant to take responsibility for the technical and operational details of the system.”

Mr Tilleard said, “In markets such as the US, both these barriers were removed through the introduction of financed solar solutions. Instead of paying upfront, the financier builds the solar asset and the customer enters into a long term Power Purchase Agreement (PPA). With today’s announcement, we are bringing the same financed solar solutions to Africa. Financing is now available to make cheaper, cleaner energy a reality for African enterprise.”

Empowering project developers through the SolarAfrica platform

CrossBoundary Energy will deploy its investment capital through SolarAfrica, a platform that provides solar installers a fully financed ‘PPA in a box’ to offer customers. SolarAfrica brings together CrossBoundary Energy’s financing with technical oversight and asset management services from NVI Energy. Through SolarAfrica, CrossBoundary Energy allows solar installers to offer Power Purchase Agreements (PPAs) to African firms – enabling them to pay for the solar assets over time, just as they would pay for grid electricity or diesel fuel.

Mr Tilleard said “SolarAfrica already has a strong network of partners and we are actively looking for new installers or developers who are interested in offering a financed solar solution to their potential customers. We are currently in operation in Kenya and are hoping to expand to up to three additional countries in the next three to six months. Our funding is available for solar projects above 100 kWp that serve commercial and industrial customers.”

A ground-breaking transaction

CrossBoundary Energy has raised US$8m in equity to provide solar power for African enterprises. After debt leverage, CrossBoundary Energy Fund I intends to invest a total of over US$25m in solar assets over the next 18 months.

Mr Cusack observed, “The fund is a unique and innovative financing platform that will pioneer an entire new asset class in Africa. It is backed by a prestigious group of investors from the USA and Australia attracted both by the commercial returns and the opportunity for positive environmental and economic impact.” Investors include Blue Haven Initiative, TreeHouse Investments and Ceniarth.

Power Africa has been a crucial supporter of CrossBoundary Energy. Through Power Africa, the Overseas Private Investment Corporation (OPIC) provided an early-stage grant to support establishment costs and the United States Agency for International Development (USAID) provided a $1.3M first-loss contribution to the fund. Mr Tilleard noted that this “was a groundbreaking innovation by USAID that helped attract private investors to this opportunity.”

In addition, the Shell Foundation, an independent charity, has also provided grant funding and business support to accelerate CrossBoundary's expansion into markets outside of Kenya and lay the groundwork for follow-on funds.

The transaction was led by Chadbourne & Parke LLP with local counsel support from the Africa Legal Network and Viva Africa. Ikenna Emehelu, a partner at Chadbourne said: "We helped solar companies create a market for distributed energy in the US.  We have seen that mass-market adoption of renewable energy occurs not when technology becomes available, but when it becomes affordable. By pooling institutional capital to finance upfront installation costs of solar systems, CrossBoundary has made solar affordable for the malls, hotels, schools and small businesses it serves in Africa.  Chadbourne congratulates the CrossBoundary team whose tenacity and vision has unlocked a promising new market in Africa."

CrossBoundary Energy’s first investment pioneers new ground in East Africa

At fund close CrossBoundary Energy also announced that its first major investment is an 858 kWp solar installation at the newly opened Garden City Mall in Nairobi. Mr Tilleard announced “It is the largest rooftop solar system in East Africa and the largest solar carport system in Africa. It is also the largest solar PPA that we are aware of with a private consumer in Sub-Saharan Africa.   This is an exciting first step on CrossBoundary Energy and SolarAfrica’s mission to introduce solar-as-service to African enterprises.”

Conclusion

Providing clean energy for African businesses represents a major commercial and environmental opportunity. The development of innovative energy financing and business models in Africa means the continent could have smarter, cleaner and more decentralized electricity infrastructure than developed countries. Mr Cusack noted that “Through the first dedicated fund for Commercial & Industrial solar, CrossBoundary Energy hopes to help Africa take a clean path to development through a transition to improved infrastructure and increased economic productivity with minimized environmental impact.”

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About CrossBoundary

CrossBoundary is an innovative investment firm that provides transaction and economic advisory services to help unlock capital for positive change in underserved markets. The firm was founded in 2011 and has worked across a range of frontier markets and also developed innovative mechanisms to attract investment in fragile states affected by conflict such as Afghanistan and Mali. Recently, the firm has launched CrossBoundary Energy, the first dedicated investment fund for commercial and industrial solar in Africa. 

 

Tags:  africa  Business Models  Capital Aggregation  East Africa  energy  finance  Financing Mechanisms  impact investing  impact investment  Investors  Kenya  Private sector development  sustainability  sustainable energy 

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Learning from What Works: IFC's New Report on Inclusive Business

Posted By Kathleen Mignano, International Finance Corporation, Thursday, November 20, 2014

 

The success of local businesses is often lost in the discussion of ‘BOP business’ or ‘inclusive business.’  While case studies abound on many of the well-known multi-nationals trying to break into these markets, why are we not learning more from companies that are already succeeding with the Base of the Pyramid? 

 

In the past 10 years, IFC has committed over US$11 billion to more than 400 companies with inclusive business models that reach the BOP. These are companies that are doing commercial business with the BOP.  They span 90 countries and a variety of sectors, including agribusiness, education, health, utilities, information and communication technology, financial markets, and housing. In 2013, the inclusive businesses in IFC’s portfolio reached over 90 million people, including farmers, students, patients, utility customers, and micro borrowers.

 

IFC’s inclusive business clients are generally not multinational companies, but rather medium to large local companies, or sometimes, the multinationals’ local subsidiaries. Many of them are not new to BOP markets.  In fact, most have been at it for a long time. 

 

Our latest report Shared Prosperity through Inclusive Business: How Successful Companies Reach the Base of the Pyramid summarizes the practical lessons that we can learn from IFC clients that successfully reach these low-income people as suppliers or customers. We analyzed our portfolio of clients, looking for the common factors that enable these companies to reach the base of the pyramid.  There are lessons for each phase of the value chain—including procurement, product development, distribution and retail, and marketing and sales. The lessons—each of them illustrated with a profile of an IFC client—can also be adapted to the context of a particular sector or region. 

 

We believe that the lessons we can learn from these companies -- many of which aren’t as familiar to those in the development community -- could prove extremely valuable for those companies that are still trying to find success with the BOP.  To many local companies, these lessons may seem like a normal part of doing business, but to others, they may be the missing piece to their business model. 

 

The report addresses four common challenges that companies face when engaging the BOP:

1. Sourcing from smallholder farmers

2. Appealing to value conscious consumers

3. Maximizing access while reducing cost

4. Unlocking ability and willingness to pay

 

Among the 22 companies mentioned in the report is Ideal Invest, the largest private student lender in Brazil. The company came up with an alternative way to price its Pravaler loan. The student is responsible for only the principal amount, while the partner universities cover the interest portion—thereby making the loan more affordable for low-income students.

 

Also included in the report is a profile of Kenya Tea Development Agency (KTDA), one of the largest tea companies in the world. In order to source from smallholder tea farmers, KTDA offers comprehensive services including training, provision of inputs, transportation, processing, marketing, and access to finance. These techniques allow KTDA to expand and diversify its supply base and offer locally-sourced quality tea, while at the same time, improving the incomes of its suppliers.

 

There is no one magic combination of these solutions that will work for every business, nor is the combination of solutions static over time.  Once a company has built these solutions into its business model, it is imperative to continue refining them to find the most effective combination. 

 

As a member of the World Bank Group, our goals are to end poverty and to boost shared prosperity. We believe that inclusive businesses are a valuable piece of the puzzle to help us get there.

  

To download a copy of the report, click here.

 

For more information on inclusive business at IFC, visit www.ifc.org/inclusivebusiness

Tags:  Base of the Pyramid  Business Models  IFC  inclusive business  Prosperity 

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USAID competition now rolling to support innovations any day of the year, any sector, any country.

Posted By Kristen Gendron, U.S. Agency for International Development, Tuesday, October 7, 2014

Development Innovation Ventures (DIV), USAID’s open innovation fund, now accepts applications for innovative development solutions on a rolling basis, any day of the year. We are currently entering our fall application cycle, and looking for your help directing the best innovators to our competition.

Help us spread the word and apply today! Winners receive $150,000 to $15M depending on stage, plus nonfinancial assistance through a swat team of DIV portfolio advisers to support their organization’s growth. Proposals can be in any sector and any country in which USAID can operate.

To learn more, share with your networks, or to apply, see fast facts and tweets below, and visit DIV's website for more information.

About DIV


Development Innovation Ventures (DIV) is an innovation fund within USAID that sources, tests, and supports the growth of proven, cost-effective interventions.  Using a venture-capital approach, DIV directly invests USAID dollars through its global platform in solutions that demonstrate impact and have the potential to achieve sustainable scale.  

 

Applying to DIV: 5 things you need to know


  1. DIV invests across 3 stages of growth with grant funding ranging from under 150K to 15 million. Applicants select a stage based on how much evidence, if any, they have previously gathered of their solution’s success.

  2. DIV looks for solutions based on three pillars: 1) cost-effectiveness relative to alternative solutions; 2) evidence or plans to gather evidence of the solution’s impacts; and 3) the applicant’s plans to sustainably scale the solution beyond DIV if it is proven successful.

  3. DIV is about open innovation. That means the competition accepts applications every day of the year. Solutions can be in any sector and any country in which USAID operates. And proposals can come from any type of organization anywhere in the world.

  4. DIV uses a two-step application process. The first step is a 5 page business plan, or letter of interest, that is intended to be a light lift for both the applicants and the reviewers to assess whether the organizations are a potential fit. If you are invited to the next stage, DIV asks applicants to submit a more in-depth proposal that is evaluated by a panel of experts for final selection.

  5. DIV’s guiding document provides more thorough information on how to apply, what we look for, and what applicants can expect in our process. Use the APS in assessing your fit with DIV and in filling out your application!


Spreading the word on social media:

  • Looking for seed financing or scaling support? @DIVatUSAID winners receive up to $15M. Apply today http://goo.gl/lv6WvV
  • Help spread the word about @DIVatUSAID to innovators in #GlobalDev around the world! Apply now! http://goo.gl/lv6WvV
  • #Innovation competition @USAID looks for bold #globaldev ideas from anyone, anywhere. Apply to @DIVatUSAID now. http://goo.gl/lv6WvV
  • Awesome competition to apply to: @DIVatUSAIDlooking for innovative development solutions. Apply today http://goo.gl/lv6WvV #SocEnt
  • .@DIVatUSAID is looking to fund the next big idea in #GlobalDev. Apply now! http://goo.gl/lv6WvV

Learn more:

Visit us online here.


Tags:  Access to Finance  Asia  Business  Business Models  early stage ecosystem  emerging markets  Entrepreneurship  finance  Grants  impact investing  impact investment  Latin America  Philanthropy; impact investing  Scale  social enterprise  Social Entrepreneurship 

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Private Sector Transport Solutions for Public Sector Benefit

Posted By John Beale, VillageReach, Tuesday, July 15, 2014
We recently completed a study of Mozambique's transportation sector and the ministry of health's transport needs, with a view to helping the ministry engage the private sector and outsource its transport requirements.  The report notes the significance of SMEs (SGBs) as an important market development catalyst for the transport sector in Africa.  In the fall, I'll be back in Mozambique to work with the MoH in two provinces to execute an outsourcing program with commercial transportation companies.

I'd be interested to know if other ANDE members are engaged in transport-related work.

John Beale
Director, Strategic Development &
Group Lead, Social Business
VillageReach
+1-206-755-0145 

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Tags:  Africa  ANDE Africa  ANDE Members  Business Models  Entrepreneurship  entrepreneurship ecosystems  Private sector development  Research  social business  Social Entrepreneurship  supply chain  sustainability 

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GrowthAfrica's Agribusiness Accelerator: Upcoming Deadline 5/31/2014

Posted By Patricia Jumi, GrowthAfrica, Saturday, April 12, 2014
Updated: Saturday, April 12, 2014

GrowthAfrica’s Agribusiness Accelerator program seeks 12 -15 innovative and scalable solutions in the agriculture sector that are solving gaps in agricultural value chains and delivering products and services that will enhance the effectiveness and livelihoods of smallholder farmers in Kenya and the wider east Africa.

The applications open on April 14, 2014. Apply today! And also help us spread the word!

About GrowthAfrica’s Agribusiness Accelerator
The 5-month Agribusiness Accelerator program takes post-revenue, pre-profit, early stage agribusinesses on a journey that will see them increase the rate and scope of their success. The program will offer expert facilitation, peer learning and mentorship by some of Kenya’s most successful entrepreneurs, C-suite executives and sector specialists, and a chance for the cohort to raise up to USD 500,000 in investments. The program is leveraging GrowthAfrica’s award-winning learning tool, the ImpactCompass™ which has proven to be one of the most effective tools for business analysis and planning.


How to apply

Organisations and entrepreneurs that are interested in applying can send us an email at: agribusiness@thegrowthhub.com . The Agribusiness Accelerator Program runs yearly. More information on the program and how to apply can be found on: www.thegrowthhub.com/agribusiness/

 

Tags:  agriculture  ANDE Members  Business Models  business training  Crowdfunding  East Africa  Entrepreneurship  impact investment  mentors  SGBs; accelerators; East Africa  Social entrepreneurship  Women 

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You're Invited! The 2013 GSBI Accelerator Showcase

Posted By Miller Center for Social Entrepreneurship at Santa, Monday, August 5, 2013
Updated: Monday, August 5, 2013

The GSBI Accelerator 2013 Class of Social Entrepreneurs will present to impact investors on Thursday, August 22 from 3:00-7:00pm at Santa Clara University.  These vetted organizations provide products and/or services to base of the pyramid populations, and are ready to scale their enterprises to impact hundreds of thousands of people in the delivery of healthcare, clean tech, and mobile finance.  Engage with innovative entrepreneurs at this invitation-only event and showcase reception.

If you would like to join us please click here and use the password: accelerator to register. We  hope you will join us for this seminal social impact investing event. If you have any questions, please contact Cassandra Thomassin-Staff (cthomassin@scu.edu).

 Date:  Thursday, August 22, 2013

Time:  3:00-3:15pm   Refreshments & Registration          

             3:15- 5:30pm  Presentations (Recital Hall)          

             5:30 - 7:00pm Showcase Reception (de Saisset Museum)

Location: Santa Clara University, 500 El Camino Real, Santa Clara, CA  95053 (Campus map & directions on event RSVP page)

Tags:  accelerators  Business Models  impact  impact investing  investors  social entrepreneurship 

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