A group of development finance institutions (DFIs), along with the Canada-based Mastercard Foundation, recently announced they will sponsor the 2X Invest2Impact business competition with the aim of supporting “the growth of high-potential, women-owned businesses [in East Africa] to increase their commerciality and impact.” The DFIs co-sponsoring the competition include the following government-backed institutions: CDC Group, a UK-based organization formerly known as the Commonwealth Development Corporation; FinDev Canada; the US government’s Overseas Private Investment Corporation (OPIC); and Promotion et Participation pour la Coopération Économique (PROPARCO) of France.
The goals of 2X Invest2Impact include to:
“Directly reach women-owned businesses that may otherwise face barriers in accessing investment capital;”
“Gather and share learnings on women in business and gender-lens investing;” and
“Pilot an investment prospecting model that could be replicated in other regions.”
2X Invest2Impact is different from many existing women-focused entrepreneurial initiatives in the region in that it focuses on more mature “growth stage” businesses that are ready to utilize larger amounts of investment capital. It will provide the selected women with “mentorships, business development services, visibility, and the opportunity for funding.” Of 25 finalists, three winners will share a USD 1 million in business funding plus USD 85,000 in cash prizes.
CDC seeks to make investments that will contribute to “support[ing] growth and jobs that lift people out of poverty, and… make a financial return.” CDC particularly targets firms that invest in South Asia, Africa and Latin America. During 2017, the organization lost GBP 28.4 million (USD 35.3 million) on total net assets of GBP 5 billion (USD 6.2 billion).
FinDev Canada is a wholly-owned subsidiary of Export Development Canada, Canada’s export credit agency. Through lending and other business investment, FinDev Canada seeks to make a positive social and economic impact on the communities in which its investees operate. As of December 2018, FinDev Canada reported total assets of CAD 97.2 million (USD 59.2 million).
The mission of the Mastercard Foundation is to support young Africans in moving out of poverty via improved “access to education, financial services, and skills training.” For 2017, the organization reported expenditures of USD 304 million and total assets of USD 14 billion.
Established in 1971, OPIC provides loans, grants, advisory services and political-risk insurance to private equity funds and financial institutions as well as projects in the healthcare, energy, technology and education sectors. As of December 2018, the organization reported total assets of USD 9.6 billion and annual gross revenue of USD 250 million, closing the year with 112 active projects in 88 countries.
Paris-based PROPARCO, founded in 1977, serves as a development finance institution within the French government’s Agence Francaise de Développement (AFD). PROPARCO focuses on private sector development in areas including Africa, Asia, Latin America and the Middle East. For 2018, PROPARCO reported EUR 1.6 billion (USD 1.8 billion) of commitments, EUR 1.36 billion (USD 1.53 billion) of which related to 68 projects started during the year.
By Jolene Khor, Research Associate
Sources and Additional Resources
OPIC press release:
https://www.opic.gov/press-releases/2019/2x-challenge-members-launch-business-competition-africa
2X Invest2Impact Competition homepage
https://invest2impact.africa/
FinDev Canada homepage
https://www.findevcanada.ca/
CDC Group homepage
https://www.cdcgroup.com/
PROPARCO homepage
https://www.proparco.fr/
OPIC homepage
https://www.opic.gov
Mastercard Foundation homepage
https://mastercardfdn.org
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