April 2011

Agenda1) GBF Video

2) Overview of GBF

3) How do measure impact?) p

4) Questions & Answers4) Questions & Answers

GBF Video

Click on the image above to view GBF’s Video

Our MissionOur Mission Develop innovative, scalable models that provide

sustainable economic opportunities to millions of people at the base of the economic pyramid. Create jobs, income and wealth

for the poorfor the poor Help improve the field

of impact investing

“Supporting High Impact Businesses is a more effective M t d b ildi tMeans towards building strongereconomies in developing countries”

GBF: What We DoBuild and support High-Impact Businesses that provide

sustainable economic opportunities to millions of people living at the base of the economic pyramidg py

Invest return-based patient capital

Capacity Building/Technical Assistance Corporate governancep g Financial planning and controls Sales and marketing Manage growthManage growth

through metrics

“GBF is a leader in making sure their investees are part of the discussion. They provide what we are requesting, and while doing that, think of other ways they can help”

- GBF Client from FSG Review

GBF ApproachGBF ApproachDonors Investors

GBP GBI I

GBF

Grants Debt & Equity Capital

GBP GBI-IShared Resources

Capacity Building Grants

Debt, Equity & Quasi-Equity capitalBlended Investment Approach

High Impact Businesses

Artisans Micro Entrepreneurs

Other BoP BeneficiariesFarmers

Investment and Value-Add PProcess

GBP: Capacity Building

St t &Evaluate

Structure & Allocate

Resources

I l t Add V l R t E it

1

2 3 4 5

IdentifyAppraise & Structure

I t t

Implement Add Value Report Exit

GBI‐I: Investment Capital

1

2 3 4 5

Oversight:1. Pipeline Review (GBP  Senior Management)2. ED, CIO, COO, Portfolio Advisory Committee, BoD3. ED, COO, Portfolio Managers

“GBF has a good understanding of our business. They are willing to try different financial instruments to help”

InvestmentSelect GBP  investments incubated with capacity building  and sold to GBI‐I

3. ED, COO, Portfolio Managers4. CIO Portfolio Management Meetings5. BoD

willing to try different financial instruments to help- GBF Client from FSG Review

Our TeamOur TeamHarold Rosen, CEO IFC – decades of investment

experience Created microfinance and SME

Agnes Dasewicz, COO Impact Investing with IFC Emerging markets private equity Founding team of one the largest Created microfinance and SME

investment practices Founded GBI

Founding team of one the largest SME funds

Investments & Capacity Building Team: Legal:Alycia Kellman (Dewey & LeBoeuf Christine Phillpotts (JPMorgan, Kenya Women Finance Trust)

Jaime Ramirez (IFC, Gone Rural - Swaziland)

Patricia Sosrodjojo – Thailand (Booz Allen, Lehman, Centre for Microfinance)

Alycia Kellman (Dewey & LeBoeuf, FINCA)

Pro Bono: Arnold & Porter, Aitken Gump

Metrics: Natasha Barantseva (Rassias Foundation, IFC)

Puneet Jhajharia – India (AXA Financial, Goldman Sachs)

Vinay Bachireddy – Kenya (Barclays Capital) Soha Ehsani – Kenya (Techoserve)

Shi Sh k I di (J h H k)

Rafi Menachem (BearingPoint, IFC) Allison Basile (Grameen Foundation)

Shiva Shanker – India (John Hancock) Eliot Marcus – Ghana (NRDC – Beijing) Rebekah McKnight (UNDP)

Our AdvisorsOur AdvisorsBoard of Directors: Iqbal Paroo

(former President & CEO, Omidyar)

GBF advisors: Jim Wolfensohn

(former World Bank President) Toshiya Masuoka

(Director, IFC) Andrew Adelson

(former Alliance Bernstein CIO)

Elaine Wolfensohn (VP, Botwinick-Wolfensohn Foundation)

Lars Thunell (IFC Executive VP & CEO)

Investment Advisory Committee: Jo Schwenke

(Former Managing Director, Business Partners)

Percy Barnevik (former ABB CEO)

Alan Patricof (Apax Partners; Founder, Greycroft LLC)

Partners) Helmut Paul

(IFC) Michael Barth

(FMO; Senior Director Darby)

CP Zeitinger (Chairman, ProCredit)

Kash Rangan (Co-chair, HBS Social Enterprise)

(FMO; Senior Director, Darby) Andrew Adelson

(former Alliance Bernstein CIO)

GBF Capacity BuildingGBF Capacity Building Total funds deployed: $2.3 million * Lessons learned:

Pre investment assistance needed

GBF Capacity Building to Date*

Pre-investment assistance needed Management (especially financial) largest

gap Not only entrepreneurs, but also their

clients and suppliers need capacity buildingclients and suppliers need capacity building Most needed capacity building done by

GBF staff (64% of Staff time in 2010) Piloting new initiatives to raise standards

Embedding managers in portfolio Embedding managers in portfolio companies Challenge Fund to support capacity building

needs through specific technical assistance grants “GBF is doing the stuff that won’t otherwise get done. grants

Note: The cost of staff led business assistance is not included

Earlier stage investments require more handholding and they integrate both.”

- GBF Client from FSG Review

GBF Portfolio SnapshotGBF Portfolio Snapshot

Committed Investment 5.8% Current Yield* Committed Investment Portfolio by Sector ($8.4M)

Artisanal 12%

69% of the total portfolio is invested in loans and quasi-equity structures, with the remaining 31% invested in

Committed Investment Portfolio by Sector ($8.4M)

SE Asia 8%

Latin

BoP Services 31%

Innovations in Finance 18%

remaining 31% invested in preferred or straight equity. All investments are in for-profit companies.

South Asia 16%

Latin America 31%

Agribusiness 39%

Most investments range from $200,000 to $800,000 (excluding smaller working capital loans). Average investment size has already

Africa 45%

investment size has already increased, and is likely to reach the $500,000 - $1 million range.

“The stage and size of their investments is great. The smaller $200-$500K space doesn’t have many players. They can also do debt, equity, and grants.”

- GBF Client from FSG Review

Note: Current yield on outstanding provisioned portfolio and does not take into account updates (convertibility options, etc)

Portfolio & Financial ReturnsPortfolio & Financial Returns

Agribusiness AgribusinessAgribusiness In Sub-Saharan Africa, agriculture

accounts for approximately 2/3 of employment and 1/3 of the economy*

GBF’s Investment,to date Over $3,000,000

Average Investment Size ~$300,000

Crucial to providing economic opportunities for millions of smallholder farmers

80% of agricultural labor in Sub-Saharan

Size

Number of Investments 11

gAfrica is performed by women*

Key issues that GBF will help clients address: Product/geographic concentration

Countries Ghana, Tanzania, Kenya, Bolivia, Peru, Cambodia, India

Number of farmersProduct/geographic concentration Price fluctuations Lack for farmer/supplier loyalty Introduction to new markets

E t l t d i k

Number of farmers directly impacted ~2.6 million

Export-related risks Quality control & standards Export contract structure

*Gates FoundationGates Foundation

LATCO InternationalLATCO InternationalModel for agricultural processing ecosystem: Improve efficiency and quality through training

A t k t th h li k ith W t b Access to markets through links with Western buyers Economic value through working capital, ownership for farmers

GBF i t t d C it B ildiGBF investment and Capacity Building: $700K for equipment, transport; ISO 9000, HACCP

certification, improvements in farmer training, financial management, improved governanceg p g

Results: Sales growth 41%/yr, cash flow positive business Exporting to 8 countries – Japan #1 Farmer associations add value by pre-processing seeds Ownership of tools through financing from Latco

GBF’s Impact• GBF’s High Impact Businesses have generated economic opportunities for over 1 millionGBF s High Impact Businesses have generated economic opportunities for over 1 million people, and improved the lives of an additional 4.8 million in Africa, Asia and Latin America.*

• 98% of the people impacted by GBF’s portfolio companies live in countries with a GNI per capita of less than $1,200 per annum.

Total People Supported By Sector(Wealth Creating Activities)

Total People Supported By Sector(Cost Savings Activities)

Agribusiness55,048Innovations in

Finance

Agricultural Technology

2,125,007Mobile

Banking377,388

Artisanal106 266

Finance173,678

Cl EJobs

60 288

Lighting226,458

Total: 5,884,177

106,266 Clean Energy2,508,162

60,288

Total:334,992 Total: 5,297,303* As of December 31 2010, , As of December 31, 2010

Measuring Impact & PerformanceMeasuring Impact & Performance GBF uses metrics to improve enterprise performance:

Best of breed framework:I t Pl i A t d L i (iPAL)Impact Planning, Assessment, and Learning (iPAL)

Blended metrics approach: financial, social, operational Social Impact Review verify number of people reached Surveys, Progress out of Poverty, Client & Verification GBF Social Return on Investment (SROI):

directional but not determinative Opportunity to contribute back to the field:

Co-host annual industry metrics workshop with Aspen Network of Development Entrepreneurs (ANDE)(ANDE)

Global Impact Investing Ratings System (GIIRS) “Pioneer fund”

Emphasis on making it useful to the businessp g

GBF Activities: New InitiativesGBF Activities: New Initiatives

New Partnerships Enhanced Business AssistanceAssistance

Building Local Platforms:Angel clubsLocal banks/funds

Test models such as co-funding new

Embedded Managers Place mid and top level managers in

investee companies – top need of all clients

investments, enhancing credit lines, or mobilizing parallel funding from other deals (ProCredit, Rabobank)

Corporations

Challenge Fund Facilitate a means for investees to

collaborate and develop solutions to share with other businesses Corporations

Help expand corporate services and build capacity to offer affordable services at BoP (BrazAfric)

share with other businesses

iPAL Expansion Utilize findings from iPAL to enhance

targeting of Business Assistance and Technical Assistance Providers Work with specialized TA providers to

develop new financing models to leverage their work (Transfair)

operations improvements; start verification; target environmental and labor standards

What Differentiates GBF?What Differentiates GBF? GBF transitions companies from social to commercial

capitalI ti i t t lth b ildi Innovative investments – wealth building

Industry leading capacity building Provides a hands-on and flexible, patient capacity building -

tailored to meet the specific needs of the investees GBF combines investing with field-building s

building a more accurate and persuasive g pcase for impact investing Leader in measurement and transparency–financial performance and external impactsfinancial performance and external impacts of its investments

Looking ForwardLooking ForwardGBF has built a strong foundation to:

Scale: Provide sustainable livelihoods to at least one million beneficiaries

Follow On Funding: Investees become self-sustainable: 75% of our investees gain access to commercial capital

Investment: Achieve 5 to 8% return on committed capital over the next 5 years

Sustainability: Make GBF sustainable as an organization and reduce dependence on grants

Innovation: Build new industry model(s)

University Partnerships

Ways to Get Involved with GBF Summer Field Internships (MBAs) Summer DC Based Internships (Undergrads & MBAs)p ( g ) Winter Break/Spring Break Field Internships (Huntsman

Program)For more information For more information on GBF, please visit our website atour website atwww.gbfund.org

Annex SlidesAnnex Slides

Social Return on Investment (SROI)Social Return on Investment (SROI) is used to calculate the:

E ti t d tifi bl i l i i tEstimated quantifiable social-economic impact that a business will generate; and

Project the number of beneficiaries the HighProject the number of beneficiaries the High Impact Business will reach with additional investments

On average for $1 dollar invested into GBF’s portfolio enterprises, 

$16 of social‐economic impact is generated(As of December 31, 2010)

Calculating the SROI • Identify the BoP beneficiaries and the type of impact created by the

Step 1Identify the BoP beneficiaries and the type of impact created by the business model*

St 2• Link the quantifiable impacts to the financial model using SROI

templateStep 2 template

Step 3• Project the number of beneficiaries in future years*

p

Step 4• Estimate the total economic returns, including terminal value in

perpetuity at a 5% discount rate

Step 5• Estimate the total amount of external financing, including future rounds

Step 6• Calculate the SROI ratio of the High Impact Business

**Assumptions are used in calculations when data does not existp

Progress Out of Poverty Surveys

What exactly is a POP survey?•A fully customized tool of approximately 15 t ti i l di15 easy to answer questions – including type of housing material, education level, and access to basic services

•Designed to help benchmark the socio-economic standing of beneficiaries against available national statistics and tools (Ex. Grameen Progress out of Poverty Index

• Allows GBF to demonstrate the degree to which our client enterprises’

Grameen Progress out of Poverty Index, USAID PAT, MDG indicators)

Allows GBF to demonstrate the degree to which our client enterprises operations improve the lives of their beneficiaries

•Helps to verify/revise assumptions used in the SROI p y p

Client Feedback Surveys

Why conduct a client feedback survey?

• Allows for improvement of services provided

• Creates an open forum to share opinions and suggestions on improvements and current performanceperformance

• Helps ensure a partnership approach where all sides are in tune to each other

Who is surveyed?

1.Beneficiaries/Clients about GBF’s Investee1.Beneficiaries/Clients about GBF s Investee Social Enterprises

2.GBF’s Investee Social Enterprises about GBF

Survey Results

49% of surveyed HAIproducers are living b l $1 25 d

Selfina borrowers see a positive correlation in th l i thbelow $1.25 per day

and are considered by USAID to be in “extreme” poverty

the loan size they receive and the increased profitability of their businessp y o t e bus ess

With over 5,000 surveys collected 44%

32% of LATCO International farmers in th i fi t ith thsurveys collected 44%

of LabourNet (LN)workers are seeing higher quality of work

their first year with the company are living below the absolute poverty line, and that percentage drops to 13% for farmers whobecause of the LN

training they received

to 13% for farmers who have worked with LATCO for at least one season.

Survey Training/ Administration

Survey Snapshots/ Training

Training HAI staff on survey aggregator tool

Tool custom built in excel w/ immediate reports

29

w/ immediate reports produced

Survey Aggregator/ DropBox