Print Page   |   Sign In   |   Register
Notes from the Network
Blog Home All Blogs

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. 

 Attached Files:

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 

PermalinkComments (1)
 

Join us: Unlikely Allies, July 5-6, Seattle

Posted By Elisabeth Cramer, Impact Hub, Thursday, June 9, 2016

Calling all urban innovators! Register now for Unlikely Allies: Future of Cities Festival in Seattle, Washington, USA, July 5-6, 2016.

Unlikely Allies is an annual two-day festival that takes place in a new city each year. We are expecting over 500 attendees from 80+ global cities, from across the US and from the greater Seattle community to gather for this event which will showcase the latest thinking, technology, best practices, innovations and ideas around the Future of Cities.

The international festival is hosted by the global Impact Hub network, and will include speakers such as Majora Carter of MGC Consulting LLC / Startup Box, Carol Coletta of the Kresge Foundation, and other thought leaders from organizations such as Change.org, MercyCorps, Microsoft, Nesta, the RSA, Techsoup, and WWF.

See this year's program and read more about the festival here!

Tags:  ANDE Members  entrepreneurship ecosystems  Impact Hub  innovation  sustainability  Training & Events 

PermalinkComments (0)
 

Partnerships to impact low-income markets in Kenya and East Africa

Posted By Chandrakant Komaragiri, Ennovent, Friday, June 3, 2016
Updated: Friday, June 3, 2016

Ennovent is seeking partners who work in sectors including Education, Healthcare, Agri-business, Finance, WASH,  Energy and others, who are interested in collaborating on business opportunities in Kenya. Partners can be individuals and organisations including consultants, development agencies, foundations, investors and corporations.


Benefits for partners will include the opportunity to collaborate with a diversified network, develop and implement innovation projects to address business opportunities, and build on knowledge and expertise on pertinent issues.


If you are interested in partnering with Ennovent, please fill out this short form, and we will be in touch with you.


We would also like to request you to share this exciting partnership opportunity widely in your network and help in making a sustainable impact in Kenya together.

Tags:  Africa  Agriculture  Base of the Pyramid  Creating Shared Value  East Africa  entrepreneurship ecosystems  inclusive innovation  Kenya  Private sector development  social innovation  sustainability  sustainable development 

PermalinkComments (2)
 

Food for Thought - Made in Africa for Africa

Posted By Irmgard Jansen, BoP Innovation Center, Tuesday, September 22, 2015

On the 27th of October 2SCALE organizes the ‘Food for Thought: Made in Africa, for Africa!’ conference in the New World Campus in The Hague, to get a better understanding of what makes African agri-business tick and what makes partnerships succeed. We invited CEOs of seven African companies to share their experience with us; from the start of their business venture
to their growth and success of today, and the challenges they faced along the way. What does it take for an African farmer or entrepreneur to contribute to food security and better livelihoods? And how can African and Dutch entrepreneurs build strong partnerships to develop the agricultural sector in Africa? We have also invited agri and food experts who will comment on why some businesses succeed while others fail.

African economies are rising, and so are their agri-food industries. Still, access to food remains a challenge for most consumer segments. Greater market participation by small-scale local entrepreneurs will boost food security and agriculture-based trade in Africa. Market expansion will also give farmers the incentive to invest in productivity enhancing technologies. 2SCALE builds
partnerships for agri-business and helps to create new businesses and expand existing ones. From the smallholder farmer producing tomatoes for the local market to the young ambitious entrepreneur or the Dutch company looking for local partners to strengthen their position. Generally, farming is not being perceived of as professional business, whereas programs like 2SCALE reveal that farming can be (and should be seen as) serious business that contributes to food security.

2SCALE covers 9 countries (Benin, Ethiopia, Ghana, Kenya, Mali, Mozambique, Nigeria, South Sudan and Uganda) and a number of product groups that can make a difference – bringing prosperity to small-scale farmers, emerging enterprises and Base of the Pyramid consumers. This implies for example the inclusion of women and the younger generations, and the empowerment of
smallholder farmers. Furthermore, 2SCALE creates networks that provide market opportunities, technologies, training, business support, credit and insurance - all the elements needed for profitable, sustainable business. Halfway through the five-year project the impact is clearly visible:

  • 50 well-established public-private partnerships are active and created new businesses and business activities
  • More than 1,600 companies are buying produce from, selling agricultural inputs to, or providing services to small scale farmers;
  • More than 265,000 smallholder farmers have improved crop yields, income and family nutrition. Over 30% of these farmers are women;
  • 24 pilot programs are now operational, increasing access to low cost nutritious food for BoP consumers; and
  • 20 learning and coaching programs for local-level networking and capacity strengthening are being implemented.  

Contact: To learn more about the conference, please check the 2SCALE website (http://2scale.org/event/2scale-business-event) or contact Irmgard Jansen (jansen@bopinc.org or +31 (0) 30 2305 915).


2SCALE was launched in 2012 and is an initiative of the International Fertilizer Development Center, the International Centre for development oriented Research in Agriculture and BoP Innovation Center. The project is funded by the Dutch Ministry of Foreign Affairs.

Download File (PDF)

Tags:  Access to Finance  africa  Agriculture  Business  East Africa  Entrepreneurship  entrepreneurship ecosystems  gender  impact investment  Scale  West Africa  Women  Youth 

PermalinkComments (0)
 

Economic Inclusion: Leveraging Markets and Entrepreneurship to Extend Opportunity

Posted By Teodora Mihaylova, Center for International Private Enterprise, Wednesday, June 10, 2015

Burgeoning youth populations across the developing world emphasize the importance of achieving sustainable economic growth and providing widespread employment opportunities. Economic inclusion refers to equality of opportunity for all members of society to participate in the economic life of their country as employers, entrepreneurs, consumers and citizens. The private sector is a central partner in fostering economic growth. The Center for International Private Enterprise (CIPE) latest Feature Service article outlines strategies to build a more inclusive entrepreneurial ecosystem by engaging traditionally under-represented groups in economic and political life. The article focuses on approaches to promote entrepreneurship opportunities among women and youth as well as informal sector operators. The Feature Service illustrates successful approaches employed in CIPE projects around the world. Click here to read the latest iteration of Feature Service.

 Attached Files:

Tags:  ANDE Members  Entrepreneurship  entrepreneurship ecosystems  sustainable development  Women  Youth 

PermalinkComments (0)
 

Michael Goldberg on Building Entrepreneurial Ecosystems Beyond Silicon Valley

Posted By Kim Bettcher, Center for International Private Enterprise, Tuesday, March 31, 2015

Join the Center for International Private Enterprise at

1211 Connecticut Avenue NW, Suite 700

 Michael Goldberg on Building Entrepreneurial
Ecosystems Beyond Silicon Valley

April 10, 2015

3.00 PM-4.30 PM

 

MichaelGoldberg - Visiting Assistant Professor, Design & InnovationMichael Goldberg will lead a discussion on how entrepreneurs engage with the resources around them, and the ways in which governments, business leaders, and donors seek to improve the environment for new business ventures. As an active mentor in the entrepreneurship community in Cleveland and experienced instructor on the subject, Goldberg will discuss entrepreneurship in both a domestic and international context. He will provide examples of entrepreneurship successes from selected markets around the world including Greece, Vietnam, Tunisia, Argentina, Rwanda, and China. Goldberg will also draw from his experiences as a mentor to entrepreneurs in Cleveland through Jumpstart, FlashStarts, and LaunchHouse.

 

Goldberg is an experienced venture capitalist and international business leader whose teaching is focused on the fields of entrepreneurship and early stage finance. He is a Visiting Assistant Professor in the Department of Design and Innovation at the Weatherhead School of Management, Case Western Reserve University. Goldberg’s massive open online course (MOOC) called “Beyond Silicon Valley: Growing Entrepreneurship in Transitioning Economies,” has attracted over 44,000 students from 190 countries and has been translated into 10 languages. Goldberg also co-founded the Bridge Investment Fund, a venture capital fund focused on investing in Israeli medical device companies that have synergies with the leading health care industries and institutions in Cleveland.

Please reply to rsvp@cipe.org

 

Download File (DOCX)

Tags:  entrepreneurship ecosystems  Training & Events  Washington 

PermalinkComments (0)
 

ASSAM-BASED TAMUL PLATES RECEIVES FOLLOW-ON INVESTMENT FROM ARTHA INITIATIVE & UPAYA SOCIAL VENTURES

Posted By Upaya Social Ventures, Tuesday, February 17, 2015

Tamul Plates Marketing Pvt. Ltd. is announcing today that the company has come to an agreement with Artha Initiative and Upaya Social Ventures (both ANDE members) on an investment that will allow Northeast India’s leading producer of palm leaf tableware to significantly expand its operations across the region.

 
The deal is notable as Tamul Plates is the only established producer of disposable tableware in the Northeast - a region with more than 100,000 hectares of arecanut under plantation and one of the poorest areas of the country. 
 
“This investment is a recognition that Tamul Plates is well positioned to meet the growing demand for high quality, environmentally responsible, and ethically produced products,” said Tamul Plates CEO Arindam Dasgupta. “Working in the Northeast, the company benefits from a unique combination of access to the highest quality raw materials and a producer base that takes great pride in its craftsmanship,” said Dasgupta.
 
Tamul Plates produces and markets high-quality, all-natural disposable plates and bowls made from arecanut (palm) tree leaves and sells them under the “Tambul Leaf Plates” brand. The company’s clientele includes a mix of restaurants, fast food establishments, event managers, and direct-to-consumer retailers.
 
This investment follows a recent agreement between Tamul Plates and the Government of Assam to supply the equipment for and train an extended network of affiliate rural producers. The investment by Artha and Upaya will allow the Barpeta-based company to make use of that expanded affiliate producer network by diversifying its product line, expanding its domestic sales and distribution networks, and opening export markets for its products.
 
“It has been a highlight of the Artha Venture Challenge to uncover a pioneering and innovative enterprise in Tamul Plates,” said Artha Initiative’s Director Audrey Selian.  “We are particularly happy to be co-investing with Upaya, and look forward to continued efforts in collaboration sector-wide through our AVC and ArthaPlatform.com programming,” said Selian. Artha Initiative is associated with Switzerland-based Rianta Capital Zurich.
 
Disposable arecanut dinnerware is hygienic, chemical-free, compostable, microwave safe - and in high demand among urban consumers around the world. The production and sale of natural arecanut dinnerware not only reduces the deforestation and pollution associated with the production of traditional disposable dishes, but also provides a viable livelihood to disadvantaged communities.
 
“Upaya has been very impressed by the work of Arindam and his team over the past year, and believe that the company’s growth plans will benefit both customers and producers alike,” said Upaya’s Director, Business Development Sreejith Nedumpully. “We are proud to join the Artha Initiative in backing this promising enterprise, and are exciting about the company’s potential,” said Nedumpully. Upaya was Tamul Plates’s first investor.
 
This co-investment in Tamul Plates is the first deal completed under the formalized collaboration framework between Artha and Upaya that was announced in November 2014. Per that agreement, the two organizations are working together to deploy seed capital to help SGBs scale and create employment for the poor, share best practices around sound financial management, and disseminate tools and training for the benefit of India's wider ecosystem.

 

 Attached Files:

Tags:  early stage ecosystem  Entrepreneurship  entrepreneurship ecosystems  impact investing  India  India; ANDE members  Philanthropy  SGBs; Environment; accelerators; energy  supply chain 

PermalinkComments (0)
 

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 

Download File (PDF)

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

PermalinkComments (0)
 

USAID's Open Innovation Competition: Upcoming Deadline 12/16

Posted By Kristen Gendron, U.S. Agency for International Development, Friday, December 6, 2013
Updated: Friday, December 6, 2013

USAID's Development Innovation Ventures (DIV) program seeks innovative development solutions in any sector and country, and from nearly any organization in the world. The next competition round closes December 16, 2013. Apply today! 

More about DIV 

DIV at USAID is an open competition supporting breakthrough solutions to the world's most intractable development challenges—interventions that could change millions of lives at a fraction of the usual cost. DIV is interested in innovations that are expected to lead to transformative (as opposed to incremental) improvements that could ultimately scale across multiple developing countries and, ideally, multiple sectors in these countries. 

More about how to apply

Virtually any organization is eligible to apply with a solution for a development challenge in any sector or country in which USAID operates. Interested applicants must submit a five-page business plan, or Letter of Interest, to the DIV competition outlining their innovation and its potential to be more cost-effective, evidence-based, and scalable than traditional approaches. The DIV competition is open quarterly, with the next round closing December 16 at 11:59 EST.

 More information on how to apply can be found online: www.usaid.gov/div/apply.

Tags:  Africa  ANDE Members  Business  Entrepreneurship  entrepreneurship ecosystems  impact investing  innovation  Scale  Social entrepreneurship 

PermalinkComments (0)
 

Creating the Environment for Entrepreneurial Success

Posted By Kim Bettcher, Center for International Private Enterprise, Tuesday, November 19, 2013
CIPE’s special report "Creating the Environment for Entrepreneurial Success” offers glimpses into scaleable, sustainable solutions to innovation and growth. Featuring experts such as Hernando de Soto, Robert Litan, Jonathan Ortmans, Mary Shirley, and more, this report suggests ways we can go beyond helping select entrepreneurs and actually nurture entrepreneurship as an entire system of innovation and opportunity.

Tags:  emerging markets  entrepreneurship ecosystems 

PermalinkComments (0)