Wednesday, February 25, 2009

6 International SME Financing Organizations

It seems the whole world is familiar with microfinance these days, and that's a good thing in my book. A lesser known concept, however, is small and medium enterprise (SME) financing, which involves loans to businesses rather than to individuals. In the context of SME financing for the developing world, businesses that receive loans focus on creating jobs in the developing world and/or providing goods and services that benefit people in the developing world. Loan sizes are much larger than microfinance loans, but each loan has the potential of reaching hundreds or thousands of people rather than one individual or one small group of entrepreneurs.

Below are descriptions of 6 organizations involved in SME financing in the developing world, listed in alphabetical order. Passages in italics were taken verbatim from the organizations' web sites.

Aavishkaar is a venture fund founded to promote development in rural and semi-urban India. The firm provides micro-equity funding, approximately USD $20 thousand to USD $500 thousand and operational and strategic support to commercially viable companies increasing income in or providing goods and services to rural or semi-urban India.

Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. We seek to prove that small amounts of philanthropic capital, combined with large doses of business acumen, can build thriving enterprises that serve vast numbers of the poor. Our investments focus on delivering affordable, critical goods and services – like health, water, housing and energy – through innovative, market-oriented approaches. Acumen Fund has received recognition from major media outlets throughout the world, and their portfolio includes investments in India, Kenya, Pakistan, Tanzania, the United Kingdom, and the United States. They earned Fast Company's Social Capitalist Award and Charity Navigator's coveted 4-Star Rating.

Agora Partnerships fights poverty and inequality by unleashing the potential of developing world entrepreneurs to improve their communities. Agora Partnerships' mission is to give developing world entrepreneurs the management tools, networks and financing needed to launch successful, socially-responsible companies. We work to find great entrepreneurs and give them practical, hands-on help and the opportunity to obtain equity financing from an investment fund specifically designed for them. We are mobilizing networks to encourage and support entrepreneurs on the front lines of development. Agora currently operates in Nicaragua. Agora founder Ben Powell is a Draper Richards Foundation Fellow.

E+Co makes clean energy investments in developing countries. With 15 years of experience and offices in 10 locations, E+Co's innovative business model provides lasting solutions to climate change and poverty. E+Co has offices in Bolivia, Brazil, China, Costa Rica, Ghana, South Africa, Tanzania, Thailand, The Netherlands and the United States.

The Grassroots Business Fund creates bottom-line solutions to poverty by helping grassroots organizations become catalysts for economic growth and social change. GBF delivers a unique blend of financing and technical assistance that helps our clients create scalable businesses, achieve sustainability, and attract socially-minded investors. Our for-profit investment fund, Grassroots Business Investors (GBI), provides grassroots organizations with access to capital that is tailored to meet their needs. Our non-profit capacity building arm, Grassroots Business Partners (GBP), works directly with grassroots organizations, providing grant-funded technical assistance to help them acquire the business discipline, knowledge and skills they need to scale up and succeed. GBF was established through the restructuring of IFC's Grassroots Business Initiative. The fund focuses primarily on Africa and South Asia.

Root Capital is a nonprofit social investment fund that is pioneering finance for grassroots businesses in the developing world. We work with artisan and farmer associations that build sustainable livelihoods and transform rural economies in poor, environmentally vulnerable places. Root Capital provides loans in 15 countries in Latin America, 10 countries in Africa, and 5 countries in Asia. The organization has received numerous accolades, including Fast Company's Social Capitalist Award and Charity Navigator's coveted 4-Star Rating.

7 comments:

shestheonesl said...

This was a terrific post, with great links. I am actively involved in both micro and SME investment, and your vision, mission, and guiding principles closely mirror my own.

I will be following your blog, and gaining further inspiration from it. Well done, Sir...*smile*

Anonymous said...

check out the New York City Investment Fund (nycif.org). They are making some SME investments in New York

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