US-based Global Environment Fund (GEF) Capital Partners recently secured USD 30 million for its South Asia Growth Fund (SAGF) III from the Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO). The funding is to boost the fund’s “equity and equity-linked” investments in middle-market institutions engaged in
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SPECIAL REPORT: The Impact of Digital Financial Inclusion on Global Development
In September 2015, every UN member country endorsed the 2030 Agenda for Sustainable Development, which comprises 17 target areas known as the Sustainable Development Goals (SDGs).
After falling from 10.1 percent in 2015 to 8.6 percent in 2018, the global poverty rate increased to 9.2 percent in 2020 because of the COVID-19 pandemic, reversing a long trend of poverty reduction. Other headwinds such as armed conflicts, rising inflation, food insecurity, and political and social unrest also are affecting global development, and the UN estimates that these crises combined to cause an additional 95 million people to live in extreme poverty in 2022.
On the other hand, the digital revolution has made many people’s lives easier with access to mobile phones, the internet and other tools. Digital financial inclusion (DFI) and its innovative business models have had a particularly disruptive effect, bolstering financial inclusion worldwide.
Impact on Sustainable Development Goals
DFI is enabling all types of pathways to advance the achievement of the SDGs, strengthening the link between financial inclusion and development. In 2016, CGAP and
MICROCAPITAL BRIEF: G20, SME Finance Forum Showcase Digital Finance Solutions for MSMEs Via Online Database, Seek Submissions
The Group of Twenty (G20), an association of the world’s larger economies, recently released a digital database hosting descriptions of “innovative financial products and services” – other than lending – that are available to micro-, small and medium-sized enterprises (MSMEs) across the globe. The entries are classified as offering Cash Management, Credit Guarantees
MICROCAPITAL BRIEF: Accion Venture Lab, Endiya Lead $3m in Equity Funding for AquaExchange for Digitization in Fish Farming, Shrimp Industry in India
AquaExchange, a firm digitizing the operations of India’s fish farming and shrimp industry, recently obtained USD 3 million in equity funding in a round led by Accion Venture Lab, a unit of US-based nonprofit Accion, and Endiya Partners, an India-based venture capital fund, with additional participation from unspecified ongoing shareholders in the company. Neither the breakdown of the funding by investor nor
MICROCAPITAL BRIEF: Kuunda Raises $2m in Equity to Expand Short-term Financing Model for Mobile Money Agents, Retailers, Consumers into 7 Countries in Africa
Kuunda, a Mauritius-domiciled financial technology (fintech) company, has completed its seed funding round with USD 2.25 million in new investment, led by Accion Venture Lab, a unit of US-based nonprofit Accion. The other investors include FINCA Ventures, Future Africa, Greenhouse Capital, Kepple Africa Ventures, Launch Africa, Magic Fund, Mercy Corps Ventures and Seedstars. The funding is slated to boost Kuunda’s existing operations – which span Tanzania and Pakistan – and allow it to expand into Democratic Republic of Congo, Egypt, Malawi, Mozambique, Nigeria, Uganda and Zambia during the remainder of 2022 and 2023. The firm’s offerings are:
MICROCAPITAL BRIEF: IDB Invest to Help Comafi of Argentina Manage Environmental, Social Risks; Deploy $20m to SMEs for Equipment Upgrades
IDB Invest, a member of the US-based Inter-American Development Bank (IDB) Group, recently loaned USD 20 million to Argentina’s Banco Comafi to invest in small and medium-sized enterprises (SMEs) via leasing services and asset financing. In particular, the intent is to enable access to equipment that is more efficient or otherwise employs better technology. The wholesale loan has a period of up to three years and is renewable for an additional three years. Meanwhile, IDB Invest will
MICROCAPITAL BRIEF: Satisfied Producer of Palm Oil in DRC Has Been “Brought Back from the Brink,” DFIs Sell Debt Holdings in PHC to Maku; Funding to Improve Community Relationships Will Continue
Four European development finance institutions (DFIs) recently sold their debt holdings in Plantations et Huileries du Congo (PHC), a palm oil business in Democratic Republic of the Congo, to Maku Holdings, an affiliate of Kuramo Capital Management, which has offices in Kenya, Nigeria and the US. The DFIs are
MICROCAPITAL BRIEF: Reltime to Launch “Decentralized Banking Ecosystem” Allowing P2P Loans, Fee-free Transfers Across Eurasia, Latin America
Reltime, a Norway-based firm founded in 2018, recently told MicroCapital it will launch a “decentralized banking ecosystem” allowing anyone with a smartphone and internet access to engage in
MICROCAPITAL BRIEF: Pro Mujer Launches Emprende Platform to Incubate Women-owned Microenterprises in Latin America
The US-based social enterprise Pro Mujer today launched the pilot phase of its Emprende platform, a Spanish-language resource for women running “subsistence” enterprises. Pro Mujer chose 600 women from 3,000 applicants to participate in the three-month pilot, which offers “pre-incubation” and incubation services in three categories:
Skills – Based on the idea of lifelong learning, Emprende offers learning opportunities, including via “edutainment,” with new content to be developed based on customer requests.
Collaboration – The platform includes a “collaborative hub,” with content partners such as the US-based technology firms Microsoft and Platsi. Platsi is a trilingual
MICROCAPITAL BRIEF: Fairbanc Raises Equity from Accion, ADB, East Ventures, Sampoerna Group to Boost Lending, Payment Systems for MSMEs in Indonesia
Fairbanc, a US-based lender and payment facilitator for micro-, small and medium-sized enterprises (MSMEs) in Indonesia, recently raised pre-Series A equity of
MICROCAPITAL BRIEF: DFC to Invest $40m in Housing, Microfinance, SME Lending, Agriculture in Guatemala
The government-backed US International Development Finance Corporation (DFC) recently agreed to invest USD 40 million in Guatemala in the following segments: (1) a loan of USD 19.5 million to Guatemala-based real estate company Destino Desarrollos to aid in the construction of “approximately 2,000 homes and associated infrastructure” deemed “affordable” in the cities of Coban, Fraijanes and Quetzaltenango; (2) with support from the US Agency for International Development (AID), a loan guarantee of USD 15 million to Guatemala-based bank Interbanco, to cover the local-currency equivalent of USD
MICROCAPITAL BRIEF: Lami of Kenya Raises $1.8m in Equity for Digital Insurance (Insurtech) in Africa
Kenya-based insurance technology (insurtech) firm Lami Technologies recently raised USD 1.8 million in a seed investment round led by Accion Venture Lab, a unit of US-based NGO Accion. Lami provides a digital platform through which firms offer instant quotations and the subsequent distribution of
MICROFINANCE PAPER WRAP-UP: “Digital Cash Transfers for Stranded Migrants,” by Anit Mukherjee, Published by Center for Global Development
In light of efforts by government entities to assist internal migrants within India whose lives have been disrupted by the COVID-19 pandemic, Mr Mukherjee argues that “unlike countries such as Brazil or Pakistan, India does not have a unified beneficiary database or social registry that could be used to identify, target, register and pay those in need of assistance.” The bureaucracy of India’s social assistance programs, which are fragmented among
MICROFINANCE PAPER WRAP-UP: “Digital Technology in Social Assistance Transfers for COVID-19 Relief: Lessons from Selected Cases;” by Alan Gelb, Anit Mukherjee; Published by Centre for Global Development
In this paper, the authors analyze the use of digital technology to implement government-to-person (G2P) social transfer programs in response to the COVID-19 pandemic in Brazil, Colombia, India, Namibia, Pakistan, South Africa and Togo. The analysis is organized around the following steps in the process:
MICROCAPITAL BRIEF: Symbiotics Raises $7.8m for Pan Asia Bank of Sri Lanka in Sale of “Green Bonds” to Investors Including SEB
Symbiotics, a Switzerland-based manager of international investments in small business, recently issued a four-year loan of LKR 1.42 billion (USD 7.75 million) to Sri Lanka’s Pan Asia Banking Corporation for on-lending to projects with reduced effects on the environment in sectors such as energy and agriculture. Symbiotics raised the money through an issue of “green” bonds. Of the bond buyers,
MICROCAPITAL BRIEF: Zola, EDF Harness Securitization to Expand Solar Energy in Côte d’Ivoire with Support from Credit Agricole CIB, Grameen Credit Agricole Foundation, Societe Generale, AfDB
Credit Agricole CIB (Corporate and Investment Bank), a member of the France-based Credit Agricole Group; the Luxembourg-based Grameen Credit Agricole (GCA) Foundation; and French investment firm NEoT Off-Grid Africa recently launched a securitization vehicle to enable Zola EDF Côte d’Ivoire to increase its sales of solar power systems to households that are not connected to traditional power grids. Zola EDF Côte d’Ivoire, which uses a
MICROCAPITAL BRIEF: Quona Capital Closes Accion Quona Inclusion Fund with $203m for Fintechs
Venture capital firm Quona Capital, which focuses on financial inclusion via technology in emerging markets, recently closed its second fund, the Accion Quona Inclusion Fund, at a volume of USD 203 million. Accion, a US-based nonprofit, is the anchor investor in the fund, which had an initial target of
MICROCAPITAL BRIEF: Banco Central de Brasil Launching Instant Payment Platform Pix for Merchant, P2P, G2P Payments
By November 2020, Banco Central de Brasil aims to roll out an instant payment platform called Pix, which will use images known as