Impact The Unbanked

ISSAM CHLEUH19.6.14

Calabar, Nigeria.

Outline.

Design a Value Proposition to impact the unbanked

I. Framework

II. Recommendations1. Inclusive Development

2. Regional Integration

3. Impact Investing

III. Case Studies

Framework.

IMPACT

INNOVATION

CHALLENGE

1

3

2 - Proven Business Model (SWOT)- Partnerships / Financing (PPP, etc.)- Scale

- Regular Evaluation & Problem Solving- Track Capital Invested/ Impact Ratio- Standardize Impact Measurements

- National - Regional – Sector - Base Year: Financial & Social Data- Cross-Cutting Solutions areas

Challenges.

Inclusive Development• Social Justice• Political Stability• Economic Growth• Human

development

Infrastructure• Energy• Transport• Communication• Water• Regional

Infrastructure

SMEs• Access to Finance • Capacity Building• Technical

Development• Business Support

Services

Framework Recommendations Case Studies

Inclusive Development.

Growth kick-started by Infrastructure & Agriculture Responsible Natural Resources Revenue Management: REINVEST IN SUSTAINABLE

INDUSTRIES

Innovative Approach to Education, Health and ICT: PPP, INNOVATIVE PARTNERSHIPS/FINANCING

Improve Governance: TECHNICAL ASSISTANCE, TRANSPARENCY & ACCOUNTABILITY

Benefits: Participation of The Poor in Economic Growth Tackle Human Development alongside Economic Growth

Challenges: Opportunity Cost Competitive Advantage

Framework Recommendations Case Studies

Regional Integration. Foster Trade Regionally in Africa Deepening and Broadening Economic ties (S.E.Z.) Creation of a Regulatory & Policy Environment

Benefits: Larger Markets More Specialization in Products and Services Increase Global Competitiveness Boost in FDI

Challenges: High Poverty Level in LICs Negative Impacts of Integration/ Trade Liberalization

Framework Recommendations Case Studies

Impact Investing. Asset Class (2010, JP Morgan Report) just like Private Equity & Bonds Origin: Developmental Finance, Private Equity, Social Entrepreneurship New players in fight against poverty: Wall Street, Private Investors, Corporations Create innovative business models and companies to address issues Impact Reporting & Investment Standards (IRIS) - 2008

Benefits: Global Standardization of Social Impact Accounting Scaling of Business Model = Bigger Social Impact New players bringing $Billions in the poverty reduction fight

Challenges: Immature Industry Risk Averse Investors Tradeoff between Financial Return and Social/ Environmental Impact

Framework Recommendations Case Studies

Case Study 1. Impact Investing Fund

Challenge Innovation Impact

Deforestation/ Drought

Political Unrest Unemployment Extreme Poverty Traditionally, Gum

Arabic Trees only used for Local Traditional Medicines

Penetrated European Market

Pharmaceuticals, Cosmetics & Food ingredients

Secured contracts with international buyers

Boosted Malian agriculture

2,500 Jobs (2010) 30 Jobs (2008) Payments to

farmers:- $1 million (2012)- $17,000 (2008) Reversed Rural

Exodus

Company: PRODUITS DU SUD - Harvest Gum Arabic Resins in Mali and Sell them Internationally

Investor: Root Capital – invest in Farmers in Africa/South America and lobby for access to market

Framework Recommendations Case Studies

Challenge Innovation Impact

Deforestation/ Drought

Political Unrest Unemployment Extreme Poverty Traditionally, Gum

Arabic Trees only used for Local Traditional Medicines

Penetrated European Market

Pharmaceuticals, Cosmetics & Food Ingredients

Secured Contracts with International Buyers

Boosted Malian agriculture

2,500 Jobs (2010) 30 Jobs (2008) Payments to

farmers:- $1 million (2012)- $17,000 (2008) Reversed Rural

Exodus

Case Study 2. Social Impact Bond (S.I.B.)

Challenge Innovation Impact

Poverty Pakistan: 50%

Housing Shortage: 6m Houses

No Legal Title to Land:

- No Economic Collateral

- No Credit Markets

Low-cost Housing Develpment ad Management Company

Targets Pakistani who earn $81-$162 per month

Developed 36 Commercial & 1,000 Residential Plots

Provided Home > 6,000 people

Scale across Pakistan & become Global Leader

Social Impact Bond (B.I.B.) are also called Pay for Success Bond. > Governments pay investors only if program works> Pressure is on Intermediary to monitor Nonprofit programs and

impact

Framework Recommendations Case Studies

Inclusiveness

Innovation Impact

Key Takeaways