Climate-Smart Loans for Smallholders: How we are Going to Scale for Impact in a USD 200 billion Market

23 Nov 2016 by Mark Ellis-Jones, Co-founder, F3 Life

A pilot client signing land management agreement in which the client agreed to build out an incremental system of soil and water conservation measures which will protect her soils for increased crop yield. Credits @ F3 LIFE
Obadiah Ngigi and I met whilst working in the environmental sector in Kenya. We both realised how financial systems for agricultural activities inadvertently contributed to environmental degradation by being blind to unsustainable use of natural resources. With a few tweaks, we thought, eco-conscious loans for agriculture could play an important role in protecting the environment and climate. Out of this realization originated our idea to start F3 Life – a company designed to help lenders provide agricultural finance to farmers, fishers and forest-users (the 3 “Fs” to which our name, F3 Life refers) on terms that specifically sought to improve environmental sustainability. In November 2014, at the Lima Climate COP 20, our organisation was selected for the UNDP and Mitsubishi UFJ Morgan Stanley Securities Co. Ltd Climate Change Finance Innovation Award in recognition of our work in designing and helping pilot a system of eco-loans. While under the conventional financial system, farmers take a loan and repay it with interest, farmers under the F3 Life system also sign an agreement under which they promise to farm their land in a sustainable way. This includes practices such as soil management to enhance soil fertility and to increase absorption of carbon emissions in … Read more

How Social Enterprises and Impact Investors can move the needle to achieve the SDGs

03 Nov 2016 by Sarah Bel, Communication Specialist, UNDP

Photo credits: Adam Kane
Last month the UNDP and Impact Hub organized the first Social Good Summit in Geneva, bringing together impact investors, international organizations and entrepreneurs to discuss how to scale up and finance impact-driven ventures to accelerate the implementation of the Sustainable Development Goals (SDGs). There was a great appetite at the summit to exchange ideas. Investors were looking to meet with innovative ventures and discuss how to create a reliable pipeline of investable entrepreneurs. Bilateral and international agencies were eager to learn how to increase funding sources and leverage their resources to implement the SDGs. Not to mention the presence of five entrepreneurs, selected through the rigorous #Accelerate2030 programme, who hoped to identify partners and supporters to scale up their respective ventures. SDGs are good for business, how do we put that in motion? Betting on social entrepreneurship to accelerate the implementation of the SDGs makes sense from an impact and a financial return perspective, but the sector requires both financial and non-financial support. To put it simply, entrepreneurs need to unlock three doors: finance, market and talent. When asked about key impediments to growth, Verena Liedgens, CFO of Agruppa, sees the key challenge as professionalization. “Everything related to back office – … Read more

Microfinance institutions offer an amazing infrastructure to channel funds for the SDGs

07 Oct 2016 by Maria Teresa Zappia and Patrick Elmer

Why did you decide to create an Education Fund? BlueOrchard mission is to channel funds to developing countries. It has USD 1.5 billion of asset under management across six funds, the majority is in microfinance activities. “We started with financial inclusion but realized that there are a set of needs that are as important as access to financial services that we can serve through microfinance. People need more than banks account to improve their lives. It is a journey, there are not so many funds focusing on these needs” notes Patrick Elmer, Head of Business Development. BlueOrchard started in the last two years two thematic funds: a regional education fund for Africa and a climate insurance (weather and climate insurance products) fund both focusing on Bottom of the Pyramid beneficiaries. Data from UNESCO and the World Bank shows the need and the opportunity for education finance in sub- Saharan Africa: out of 58 million primary school aged children not in school globally, 28 million live in sub- Saharan Africa. The asset manager realized that financial institutions and NGOs in developing countries had started a new line of business and were seeing loans to schools as a business opportunity, thought they lacked … Read more

Investir dans les matières premières au niveau des PME des économies émergentes en dehors du marché bancaire

06 Oct 2016 by Ivan Agabekov

Comment INOKS est-il devenu l’un des plus importants investisseurs dans les matières premières ? Ivan Agabekov, CFO INOKS Capital n’investit pas à proprement parler dans les matières premières aux travers des marchés dit traditionnels, (marchés à termes ou physiques). INOKS est un gestionnaire de fonds de placement collectif qui gère ses propres véhicules d’investissement. Notre stratégie a premièrement consisté à fournir du fonds de roulement (working capital) à court terme aux PMEs dans les pays émergents. Nous nous intéressons surtout à l’Afrique subsaharienne et aux pays de l’ex Union soviétique, mais avons également réalisé des investissements en Amérique du Sud et en Asie du Sud-est.  Nous ciblons les entreprises non-spéculatives actives dans le secteur des matières premières, notamment les produits agricoles (les grains, les soft ou les huiles végétales) et certaines protéines animales, mais aussi les métaux (non-précieux) et énergies. Tout ceci à une seule condition : les chaines de valeur ajoutée de ces commodités-là doivent respecter des critères de durabilité et d’impact clairement définis. Quand nous avons lancé cette stratégie, nous avons réalisé qu’il existait de nombreuses sociétés implantées depuis plusieurs générations situées en dehors du marché bancaire qui manquaient de fonds de roulement. Ces sociétés ont une expertise, ce qu’il leurs manquait c’est le … Read more

Investing in SMEs in raw materials outside the banking market and in emerging economies

06 Oct 2016 by Ivan Agabekov, CFO, INOKS

How did INOKS become one of the largest investors in raw materials? INOKS Capital does not invest in raw materials through traditional markets as such, (futures or physical). INOKS is an independent asset manager which manages its own investment vehicles. First of all, our strategy involved the supply of short term working capital to SME’s in emerging countries.  We are mostly interested in sub-Saharan Africa and the countries of the former Soviet Union, but we have also invested in South America and South-east Asia.  We target non speculative companies which are active in the raw materials sector, notably those involved in agricultural commodities (grains, softs or vegetable oils) and certain animal proteins, as well as metals (non-precious) and energy. We have one prerequisite: the added value chains of these commodities must respect clearly defined criteria for durability and impact. When we launched this strategy, we noticed that numerous companies which had been established for several generations were situated outside the banking market and lacked working capital. These companies possess expertise, what they lacked was the capital required for purchasing the inputs and to plant, harvest and transform. Unfortunately, the banking market is often deficient when it comes to SME’s, particularly in … Read more