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Spread the Word: Stanford Seed is Seeking Applicants in Africa & India

Posted By Kendra Gladych, Stanford University, Tuesday, May 7, 2019
Updated: Tuesday, May 7, 2019

Stanford Seed is looking for high-potential CEOs or founders of companies and market-driven social enterprises based in Africa, India and Sri Lanka who are motivated for growth.

The Seed Transformation Program is an unconventional, high-touch learning experience that partners with entrepreneurs in emerging markets to build thriving enterprises that transform lives.

The application deadline is 15 June 2019.

Learn more about the program and access the application here.

Know someone who might be interested? Help us spread the word! Visit this online toolkit for easy ways to share the program with your network.

Tags:  Africa  Agribusiness  Agriculture  ANDE Africa  Business  digital economy  east africa  education  emerging market  emerging markets  energy  entrepreneurship  Fintech  High-Growth Entrepreneurship  India  India; ANDE members  Kenya  leadership  Liberia  professional development  Rwanda  Scale  scaling  smes  social enterprise  Social entrepreneurship  social impact  South Africa  Tanzania  Training  Uganda  West Africa  Women 

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Accion invests in CÍVICO to accelerate access to innovative financial services in Latin America

Posted By Lisa Johnson, Accion, Wednesday, April 10, 2019
Updated: Wednesday, April 10, 2019

Bogotá, Colombia, April 3, 2019 — Global nonprofit Accion announced today an investment in Latin American digital platform CÍVICO. The funds will help CÍVICO invest in technology and analytics, expand its merchant network, and develop its suite of financial services.

CÍVICO is a digital platform that enables access to information and services to improve the quality of life of individuals in Latin America. The company provides micro, small, and medium enterprises (MSMEs) in Bogotá, Colombia; Mexico City, Mexico; and Santiago, Chile with a platform to connect with local customers as well as business information and payment services. CÍVICO also provides a strong value proposition to its merchants with electronic payments, e-commerce, business education in digital marketing techniques, coupons and loyalty programs, as well as better bookkeeping techniques. Today, CÍVICO has more than 600,000 registered merchants and helps serve more than 4 million consumers.

“We’re excited to bring on Accion as our newest partner. With its decades of experience supporting financial services innovation in Latin America and around the world, we know Accion’s investment and advisory support will be critical as we scale our services and reach in the region,” said Ricardo Pombo, CEO and Co-founder of CÍVICO.

"Latin American entrepreneurs often lack access to formal financial services and adequate business training. Through its simple, digital platform, CÍVICO is closing this gap and helping small businesses thrive," said Michael Schlein, President and CEO of Accion. “Accion is excited to bring our global expertise to CÍVICO’s experienced management team and help leverage its innovative technology platform to scale financial services in the region,” said Radhika Shroff, Deputy Chief Investment Officer of Accion Global Investments.

As part of its merchant customer acquisition strategy, CÍVICO uses an innovative crowdsourcing model to identify and confirm MSME information, including the business’ names, contact information, hours, and services. This information, along with merchants’ and users’ data, helps CÍVICO learn more about the MSMEs it serves, connect them with local customers, and develop deeper profiles that can be used to better understand community needs and ultimately provide entrepreneurs with tailored financial services. The company also partners with large financial service providers to help entrepreneurs access the electronic payment systems they need to accept credit and debit cards, allowing them to increase sales.

In addition to financial support, Accion is providing advisory services to enable CÍVICO to reach more clients throughout Colombia, Mexico, and Chile. The advisory services will support the company as it further develops its financial services distribution and enables more merchants to access quality digital services.

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About Accion

Accion is a global nonprofit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. We catalyze financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of — or poorly served by — the financial sector. For more than 50 years, Accion has helped tens of millions of people through our work with more than 110 partners in 50 countries. More at http://www.accion.org>.

 

Link to associated blog: https://www.accion.org/how-one-platform-connects-cities-and-boosts-small-businesses/

Tags:  communities  digital economy  emerging markets  financial inclusion  impact investing  innovative finance 

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Working with investors to develop proactive talent strategies

Posted By Rebecca Harrison, African Management Initiative, Thursday, March 21, 2019

Working with investors to develop proactive talent strategies 

Human capital is a key challenge for many SGBs. Getting and keeping the right team in place is critical to propel ventures to scale – yet founding teams often struggle to find the right fit. Many investors in African companies have tolAMI they want to focus more post-investment support on developing talent within their investee companies. But they often aren’t sure how to develop a talent strategy that cuts across their investment portfolio.

AMI hosted a roundtable discussion in Nairobi last month for around 30 early and growth stage investors into East Africa interested in adopting more proactive talent strategies for their portfolio companies. We shared 3 models we’ve seen used to provide post-investment human capital support, and hosted a candid discussion around what is and isn’t working.

AMI identified the following three broad buckets for ways to engage around talent at a portfolio company level. We heard from various investors, who shared how they are using different approaches to help their investee companies build out the teams they need to scale.

Three models:

Facilitative model   This could also be described as the ‘matchmaking’ model. The facilitative model is used when investors help companies understand their talent needs, identify and introduce them to quality providers, and then show them how to engage. The investor’s role here is primarily diagnostic and facilitative, and aims to support needs that are specific to each founding teams/organisation. Some investors are using TA funds to finance these interventions.

Examples: For AHL Ventures, talent is one of the main post-investment challenges that companies across their portfolio face. They often work with their companies on creating a talent plan or helping them directly acquire talent. They also refer investee companies to talent providers, where appropriate, using experience on what has worked with other portfolio companies to inform recommendations. For example, AMI has worked with AHL to train employees in several of their investee companies, including MKOPAPowerGenEthioChicken and Equity for Tanzania.

A different approach within the facilitative model was shared by CDC Groupwhich is developing an online directory for investee companies providing information on different human capital services available, including services specific to talent development – training, recruiting etc. CDC aims to make this directory available more broadly with the goal of also building the broader ecosystem (see supply-side model below).

Direct model The direct model differs from the facilitative model, as it works to identify a very clear need across the investor’s portfolio, instead of working on a case-by-case basis. This model is focused on solving a specific challenge, for example developing middle managers, hiring CFOs or working on enterprise sales. The goal is to offer a structured programme or intervention that cuts across the entire portfolio. This approach is becoming increasingly popular as investors deepen their understanding around critical talent challenges, and is often funded by a blend of investor/TA subsidy and direct payment by the company.

Examples: Acumen identified a need across its portfolio to strengthen middle management skills and build leadership bench strength below the executive team. They first partnered with AMI 3 years ago to develop cross-portfolio programmes for both middle and senior managers and now run at least one programme annually. Interestingly, Acumen started by subsidising the programmes significantly, but has gradually phased this out. Companies now pay directly, and many have worked this into their annual planning and budgeting processes.

Shell Foundation took a similarly direct approach, offering AMI management programmes to companies across its portfolio on a cost share basis, after identifying management skills as a cross-cutting need. In this case, Shell Foundation allowed companies to engage AMI on their own terms, but provided the cost-share to make this possible. More than 100 have continued to work with AMI on a fully commercial basis, demonstrating that investors can often play a catalytic role in demonstrating the value of human capital services to companies.

Finally, Investisseurs & Partenaires (I&P) hosts a pan-African entrepreneurship club for its portfolio companies, where portfolio companies are invited to exchange ideas and debate on various issues including recruitment and retention. I&P also hosts seminars on specific topics of interest to entrepreneurs.

Supply-side support A small and growing group of investors are working to strengthen the ecosystem of human capital providers itself, either through grants and investments into supply-side players, or through experimentation with innovative sector-building models.

Examples: Shell Foundation is working with Argidius Foundation and Bluehaven to develop a Talent Facility to encourage and enable early-stage enterprises to invest in talent even when cash is constrained. Bluehaven, AHL and I&P have all invested directly into human capital providers such as AMI and Shortlist. And both Bluehaven and Argidius Foundation have provided grants to build the talent ecosystem more broadly.

Top learnings from investors:

Each of the 30 investors in attendance have several years of experience working in the impact investment sector in East Africa and globally, and shared openly about what they’ve learned around human capital. Here are a few high-level learnings

    • Investors can and should influence, and even incentivise, founding teams to focus on talent. Investors noted that founders themselves needed to be bought into human capital as a strategic priority. Investors can make their expectations clear in this regard, both before investment during diue diligence and after investment, at a board level.
    • Human capital is a core strategic priority not a ‘nice to have’ – is it on the agenda at board meetings? Many companies and investors agree that talent is important, but then spend their board meetings talking about fund-raising and sales targets. Investors who sit on boards can push talent issues up the agenda by asking the right questions around talent strategy.
    • Proactive talent strategy is more effective than reactive crisis management: Investors have seen talent challenges emerge when companies grow very quickly. Investors can encourage companies to get the right human capital systems and structures in place ahead of (or at least at the beginning) of a period of aggressive growth, and can share lessons learned from other portfolio companies.
    • Investors have seen key needs cut across portfolio companies. Some key themes emerged from the discussion – for the example the need to develop middle management, the shortage of strong CFO candidates and challenges with enterprise sales. However investors working at different stages of the investment cycle noted that different approaches are required for early-stage businesses versus more mature companies. Investors can benefit from sharing notes with others investing at a similar stage.
    • Due diligence should include a structured focus on management capacity & learning mindset. Many investors are being more intentional and structured about probing the management capacity of founding teams and their broader leadership. Some noted the importance of ensuring that entrepreneurs themselves have a learning mindset, and so are likely to build a learning culture across the organisation.
    • Start with simple interventions that work – A quick and easy way to start leveraging your experience as an investor to drive talent development is to introduce functional heads from within your own portfolio to each other. For example, introducing the head of marketing from two of your investee companies to each other is extremely beneficial for growth, learning and innovation.

We’d love to hear from any investors who have tried approaches not listed here. What’s worked for you? What are you still trying to figure out? Can we help?

AMI delivers a practical and scalable approach to workplace learning using a blended methodology that combines online courses with in-person workshops and practical hands-on application. AMI has rolled out 70 programmes across 13 African countries and directly trained over 26,000 people, including hundreds working at investor-backed growth companies. In 2019, AMI was named one of the Companies to Inspire Africa by the London Stock Exchange Group.

Tags:  Africa  capacity development  east africa  emerging markets  Human Capital  impact investing  impact investment  investors  smes  social enterprise  social impact  talent  Training & Events 

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Chipping Away at the MSME Financing Gap

Posted By Emma Marks, Small Scale Sustainable Infrastructure Development Fund, Monday, November 5, 2018

MSMEs are widely regarded to be among the primary drivers of economic development, employment, and innovation in emerging economies. However, a disproportionate number of MSMEs face challenges accessing the financial services they require to cover their day-to-day operations and scale into robust, sustainable businesses. Often, they have needs that exceed microfinance ceilings, and they cannot access financial services through banks or similar providers without established credit histories, well-documented business records, or sufficient collateral. Likewise, traditional banks tend to overlook potential MSME clients due to actual and perceived risks, transaction costs, and a general lack of familiarity with pro-poor business models.

The latest article from S3IDF advocates for tools like loan guarantees as a means to addressing the root causes of financial exclusion. By having “skin in the game,” banks and other financing institutions are more likely to engage seriously with the assessment process in a manner that will leave them better positioned to finance similar deals in the future and to extend other financial products and services to other MSME clients.

Tags:  access to finance  emerging markets  inclusive innovation  missing middle  social impact 

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Risky business: how to de-risk your fintech startup before it’s too late

Posted By Akansha Kasera, Bankable Frontier Associates, Friday, April 6, 2018
Updated: Friday, April 6, 2018

By Maelis Carraro and Elizabeth Davidson

If you’re a fintech entrepreneur, it’s probably not news to you that failure is more likely than success. After all, an estimated 70% of tech startups fail, typically within the first two years after their first round of financing.

Catalyst Fund has been working with inclusive fintech startups, a field that presents unique challenges for entrepreneurs, over the past two years. In many countries, it is a sector that presents more regulatory constraints, limitations as to how companies can handle information, and stringent operational and capital requirements.

Different startups, common risk challenges

Despite working with a wide variety of fintech startups across different geographies and sectors, we have seen some themes emerge on the most common risks that can pose a threat to the success of the business at the early stage. All startups mention they lack the financial and human capital they need to grow their businesses. “Finding funding is a huge burden. The average startup CEO spends 70% of his time fundraising, which remains the number one challenge faced by local startups,” says Yoann Berno of Flowigo.

Finding people with the right skill sets who are willing to give up more secure job alternatives is also big barrier, yet fundamental to raising capital and ensuring smooth execution. “The biggest challenge is getting the team with the right skill set at first, especially when you’re a young company and don’t have a system or protocol for hiring and then you start growing rapidly,” says Destacame’s Jorge Camus. “It then gets challenging to manage the team, train them and really build a culture that allows you to get to your goals.”

Over 70% of our fintech entrepreneurs also noted that not getting to product-market fit is a major challenge they face. They felt they did not have a full understanding of their customers needs to build strong value propositions. Additionally, 40% mentioned they faced technology risks, including lack of accessible data to refine their products, and 33% pointed to specific ecosystem dynamics that might threaten their business ability to scale.

Want to mitigate risks? Start early!
Early identification of key risks can help fintech startups invest in the business support they need early on before a risk takes down the business. These risks can scare off investors, who want to ensure that entrepreneurs understand the key challenges they face. Instead of waiting for entrepreneurs to identify key risks, early stage investors can work with startups to tackle these risks before or in conjunction with their investment.

Catalyst Fund has taken just this approach. By working with our entrepreneurs to identify risks, we can tailor technical assistance to solve these risks so that investors are more confident in the future success of the business.

Taking an honest look at their own key risks can be difficult for entrepreneurs, who may be too deep in the weeds to step back and look at the bigger picture. This is why the Catalyst Fund developed a risk diagnostic to help startup leaders get a better grasp on their challenges, and understand those within or outside of their control. The tool offers a checklist of possible mitigation strategies for the entrepreneur. Here are a few strategies we applied through our technical assistance engagements:

Understand your customer to offer strong value propositions
For Miguel Duhalt at Comunidad 4uno, that meant better understanding what his customers valued most about its product in order to focus on high value customers and tailor their offering. When we first met 4Uno, a financial services distribution platform offering insurance, health benefits and payments services for domestic workers in Mexico, they struggled with picking the right product offering for the right customer segment. After working with them on customer research, we helped them segment their customer base to refine their product offering and marketing strategy. Since then, they tailored product packages for insurance to specific client profiles and also offer salary payment services via an app, which resulted in a growth spurt.

Figuring out the right way to engage with customers is also a challenge for entrepreneurs in these markets and a big risk to the company’s ability to take off. How can a mobile-based startup communicate its value proposition clearly and consistently with a rural customer base when only 50% own phones and only 20% are literate? WorldCover, a platform providing insurance to low-income farmers around the world, used a marketing MVP, or minimal viable product, composed of simple and clear images to cater to the illiterate majority of potential customers. They tested various solutions, from SMS systems to a “microphone man” going to communities to play a recorded message and frequent community meetings. Community meetings, with 95% attendance rates, allowed WorldCover to maintain a human touch with customers. Farmers trusted WorldCover more after more face-to-face interactions because “an impostor wouldn’t show up at your house every week after taking our premium money,” said WorldCover’s CEO, Chris Sheehan.

Build a product vision and roadmap that meets your business needs
On the other hand, PayGo, a pay-as-you-go gas solution in Kenya, realized they were struggling with technology risks. They needed to integrate with a scalable payments solution, track key gas system indicators, and find tools to measure, monitor, and run their field sales team and customer service, yet they did not have the tech skills in the team build the necessary back-end software technology. We worked on designing their product architecture and built a new version of the app they are still using today. “The architecture we built with Catalyst still holds,” says Nick Quintong, PayGo’s CEO. “It was fundamental for a team that doesn’t have software expertise to bring someone in to show us how it can be done with off-the-shelf software modules.” Without these key technology investments early on, PayGo would not be poised for the growth it’s enjoying today.

In Colombia, we helped Escala, a savings fund for corporate employees and their children, with similar challenges. Initially, technology was holding Escala back and preventing them from reaching more clients who could benefit from their services. We worked with Escala to identify and integrate the right tech processes to match their stage and helped them avoid spending important resources on expensive and unnecessary CRM tools. 


“We believe ESCALA Educación’s story proves that a model like CF is very valuable to get a company investment-ready.” 

Escala used their new tech structure to more successfully manage their two sets of clients — companies and their employees — and to raise a seed round, which included members of Catalyst Fund’s Investors Committee such as Accion Venture Lab. “We believe ESCALA Educación’s story proves that a model like CF is very valuable to get a company investment-ready,” said Tahira Dosani, co-managing director of Accion Venture Lab, at the SOCAP conference this year. “ESCALA combines a strong management team and exciting customer acquisition and engagement strategies” says Vikas Raj, co-managing director of Accion Venture Lab.

Get the timing right
Unfortunately, not all risks can be mitigated. For Flowigo CEO Yoann Berno, “timing is everything.” Flowigo, a SaaS company seeking to enhance operations of pay-as-you-go product distributors in Africa, faced timing risks that ultimately backfired. Its markets lacked the client density necessary from them to scale, and key infrastructure issues like connectivity posed an ongoing challenge. SaaS companies like Flowigo need dense networks of businesses to flourish, but in Africa, industries that count more than a few dozen major players are rare. Scaling a SaaS business while addressing 10 to 15 customers is a hard sell. Ultimately, Flowigo succumbed to the timing risk, deciding to pivot and wind down this line of business.

Overall, while not all risks are avoidable, you can’t avoid the risks you don’t know about or aren’t focused on. So for fintech startups and investors alike, identifying and mitigating risks early is key to success. To get started on identifying your fintech startup’s key risks and think of your mitigation plan, check out Catalyst Fund’s new risk diagnostic.

You can also check out De-risking your Fintech startup webinar where we go over the toolkit and risk assessment for Catalyst Fund companies here

 Attached Thumbnails:

Tags:  Business  emerging markets  entrepreneurship  finance  impact investing  inclusive business  inclusive innovation  Incubation  Risk; Risk Assessment; ANDE Members  SGBs; Environment; accelerators; energy  social business  social enterprise  social entrepreneurship 

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MDIF closes $6-million media impact fund

Posted By Peter Whitehead, Media Development Investment Fund, Tuesday, March 20, 2018
New York, March 19, 2018: Media Development Investment Fund (MDIF) today announced final close of MDIF Media Finance I, a $6-million impact fund investing in independent news media in select emerging and frontier markets.

“We are delighted to have closed MMF I and ramp up financing for companies that provide the news, information and debate that people need to build open societies,” said Harlan Mandel, MDIF Chief Executive Officer. “MMF I loans will help build companies that expose corruption, hold governments to account and provide balanced coverage of elections.”

MMF I provides affordable debt to independent news companies in a range of countries where access to free and independent media is under threat. The fund will invest in companies in countries such as India, Ukraine, Bolivia and Lesotho.

MMF I notes pay 4% annual interest and, under a pioneering agreement with the Swedish International Development Cooperation Agency (Sida), MDIF and Sida provide investors with 55% first-loss protection. Sida also provides technical assistance grants to fund investees to build their management capacity.

MMF I investors include the Open Society Foundations (Soros Economic Development Fund), Dreilinden, a Dutch family office and Antonis Schwarz.

“MMF I will finance investments in software, equipment, content production, workspace, as well as working capital and short-term cash-flow needs – all vital for company growth,” said Mr. Mandel. “With the successful close of MMF I, we are now looking forward to launching MMF II later this year.”

About MDIF

MDIF is a New York-based not-for-profit investment fund for independent media in countries where independent media are under threat. It has 22 years’ experience of helping build quality news and information companies – print, digital and broadcast – in emerging markets. It has:

  • invested more than $166 million in 114 media companies
  • worked in 39 countries on 5 continents
  • a current portfolio of more than $60 million invested in over 50 media organizations

For more information, contact Peter Whitehead, MDIF Director of Communications, peterawhitehead@mdif.org, +44 7793050670.

Tags:  emerging markets  impact investing  impact investment  social business  social impact 

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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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Crowdsourcing innovations that enhance economic stability. Submit by September 15!

Posted By Phil Psilos, FHI 360, Wednesday, August 16, 2017

Have your organization, investees, or clients created a product, program, or policy that enhances economic stability for poor and vulnerable people?  We'd like to hear about it!

FHI 360 is working with support from The Rockefeller Foundation to surface global innovations that improve economic stability for individuals, communities, local governments and businesses .

The research team is looking for innovations that enhance several dimensions of economic stability: (1) income and asset stability through more consistent employment, wages, and safety nets; (2) specific financial products, skill development approaches, or other means that help people plan for and invest in the future (3) innovations that improve people’s confidence in economic management, regulatory quality, and dispute resolution, or allow them to participate more effectively in shaping these environments in ways that enable better decisions at the household and business levels.  

Top innovations will be featured in an Atlas of Stability Innovation published by FHI 360 in early 2018, in our online media campaigns, and promoted in global media.

Please submit your innovations by September 15, 2017 at at the submission page or visit the project website to learn more. You can also reach us at innovation4stability at gmail dot com          

Tags:  crowdsourcing  emerging markets  Global. Development  inclusive business  inclusive innovation  innovation  Microfinance  social enterprise  social innovation 

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AXiiS is closing the gap with 6 billion (USD) in assets under management ready for SMEs to access finance Today!

Posted By FAST International, Finance Alliance for Sustainable Trade, Wednesday, April 12, 2017
Updated: Thursday, April 13, 2017
https://youtu.be/I4QvUzUwkxQ

About AXiiS:

Unique in its industry, Access and eXchange impact investment for Sustainability (AXiiS), is populated with local Financial Advisors based on their grounded work in the field with agriculture and forestry SMEs in Africa, Latin America and the Caribbean, ensuring sustainable investment ready cases.

Selected SMEs are profiled based on criteria ensuring their investment-readiness, while collecting relevant data on investment in agriculture and forestry sectors. It showcases blind profiles of SMEs and Financial Service Providers to ensure security and to enhance the matchmaking process.

To join or find out more, visit: www.axiis.ca

Download File (PDF)

Tags:  A Access to Finance  apps4africa  asset finance  banking  capacity development  climate resilience  emerging markets  Environment  environmental impact  finance  Global. Development  India; ANDE members  Investors  Latin America  news  nicaragua  Performance Measurement  Rwanda  Scale  SDGs  SGBs; accelerators; East Africa  SGBs; Environment; accelerators; energy  smaholder farmers  small and growing agrobusiness  smallholder farmers  smes  social impact  supply chain  sustainability  sustainable development  Tanzania  Uganda 

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TA Finance for SGBs - a scarce good down the road?

Posted By Pedro Eikelenboom, PUM Netherlands senior experts, Wednesday, September 21, 2016

Some perspective...once upon a time...

Picture yourself at a roundtable session with the topic ‘financial   instruments to support private sector development – how can business and non-profit collaborate’.  Guest speakers include a representative from a development bank, a public enterprise development agency, a non-profit and an enterprise

It reads like one of the many 'powwows' on the topic, though the invitation to this event has long but expired - it took place in October 2005 in Amsterdam, the Netherlands….


The impact investment eco-system

Fast-tracking time to 2016, there’s a new world created around impact investing. It has grown into an enormous market place for innovative financial (and non-financial) products and instruments. Where investors and prospects meet up, advised by consultants, think tanks, investment networks and so forth.

Many type of impact investors have entered the market, from banks, pension funds, wealth managers, family foundations, governments, development finance institutions and NGO’s. Hereby gradually expanding their investment portfolio into high-risk sectors like agriculture, in challenging countries, and targeting enterprises with ticket-sizes between US$ 100k – 500k.

It’s a shift (change in strategy) by some investors, with many key players shifting their ‘grant funds’ to a ‘return on investment’ portfolio. Is the eco-system creating a scarce good out of grants (in most cases being technical assistance / knowledge sharing) directed to support capacity development within enterprises? 

The true price of grants

Impact investing cannot only be about moving investment capital to riskier endeavors. It’s a combination of capital investments and non-reimbursable investments (the so-called grants). And the latter being a crucial factor in supporting the public good impact through technical assistance or capacity building trajectories for the beneficiaries. Neither is it a combination of 90-10, where grants serve as a bit of technical assistance on the side.

Reaching the enterprises that have growth potential but limited access to finance, means taking risk (call it technical assistance, capacity-building, non-reimbursable grants, first loss, equity stake, if you like) through a structured deal proposal between the impact investor, (perhaps) a development bank, an NGO, a technical service provider and so forth.

Several studies have stated that there is sufficient capital in the world to invest in small and medium sized enterprises (the ‘missing-middle’), in volatile sectors and in frontier markets. So money is not the issue – though the non-reimbursable investments are unfortunately becoming a scarce good due to policy changes within the public and non-profit sector.

However, beyond the non-profit community, grants are often perceived as ‘little strings-attached subsidies’, which require no financial returns. Of course, non-financial impact (social, environment etc.) is sought, though it’s based on expectations (outputs, outcomes). If one fails to reach the objectives, basically there’s not much harm done, it is - in the end - a grant.

How can we change this mindset? Grants do have a ‘price-tag’, value or leverage when dealing with blended finance. I’m sure, many investment deals in frontier markets would and will not happen without some flow of subsidies structured in the deal. Surely not advocating that grants should have a ROI too – next to non-monetary impact (social, environmental) -, but we should not take for granted the indirect value or direct leverage a subsidy has in the impact investment space. What can grant providers request or negotiate more in return for their contribution? Elements such as securing a seat at the board table of an investee (steer company’s public good objectives), or commit private grant funding to the related capacity-building program of an investment.  

Transferring skills & knowledge to secure ROI

Potential investment prospects (enterprises) may have fragile balance sheets, weak governance or inefficient processes. For that reason they are often initially overlooked by investors. As the impact investment marketplace is moving towards the ‘high-hanging fruit enterprises’, the power of knowledge becomes even more visible. Short-term technical assistance (related to entrepreneurship development) can strengthen an enterprise, making it robust and subsequently ‘de-risk’ its profile to potential investors.

In the case for professional volunteer service organizations (i.e. PUM, IESC, ACDI/VOCA, SES etc.) – its transfer of knowledge is as crucial as the committed capital investment to enterprises. Next to that, these organizations have a wealth of data, network and track-record in advising enterprises around the globe.

In the access to finance space for entrepreneurs, professional volunteer service organizations can play a critical role in strengthening the business competences of enterprises.

The lack of available (and/or affordable) local network of skills and experiences, that can contribute to the range of challenges an entrepreneur faces, is the gap where professional volunteer service organizations can offer qualified, experienced volunteer professionals to donate their time in transferring knowledge with entrepreneurs around the world. 

A structured approach

A structured approach on enabling enterprises in frontier markets to grow is essential and contributes into embracing entrepreneurs beyond the ‘usual suspects’. Collaboration through acknowledging and applying each other’s strengths is the way forward in achieving a sustainable return and impact through investment. And not to forget the role of governments and multilateral institutions in continuing - or at least not further reducing - ODA funded enterprise development programs. Of course, few would disagree with this conclusion, though the eco-system unfortunately exhibits far too few cases to proof otherwise.

For more insights on the role and added value of professional volunteer service organizations like PUM can have in strengthening SBG's as to de-risking their profile to impact investors, download the enclosed (full) article. 

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Tags:  accelerators  Access to Finance  Business  capacity development  Capital Aggregation  early stage ecosystem  emerging markets  entrepreneurship  entrepreneurship ecosystems  impact investing  impact investment  inclusive business  Investors  partnership  Pioneering Capital  Private sector development  social business  social entrepreneurship  social impact 

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