The Truth About Disruptive Development

SOCIAL ENTREPRENEURSHIP

The West shouldn’t create solutions to problems we don’t understand using fashionable mobile technologies.

By Ken Banks10 | Jan. 16, 2013

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Mobile users in developing countries are increasingly using apps and services developed in-country. (Photo by Ken Banks)

Ten years ago, I was preparing for my first contribution to mobile technology—the result of two years of work that would lead to the development of a conservation service called wildlive!, and which would mark the release of one of the earliest reports on the application of mobile technology in conservation and development. A lot has happened since then. There’s been an explosive interest and excitement—and, yes, hype—in mobile, and a sense that the technology can be the savior of, well, everything.

Back in 2003, you’d be able to fit everyone working in mobile for development (m4d) into a small cafe. Today you’d need at least a football stadium. m4d—and its big brother, ICT4D (information communication technologies for development)—have become big business. Although I didn’t need more proof of mobile’s supreme status in development, last month I attended Vodafone’s Mobile for Good summit in London. It was a high profile affair, and an extremely upbeat one. Yet I left with mixed feelings about where m4d is headed.

My five takeaways after a day of talks, debates, and demonstrations were:

  1. Everyone is still excited by the potential of mobile.
  2. The same projects surface over and over again as proof that mobile works.

  3. Mobile is still largely seen as a solution, not a tool.
  4. It’s up to the developed world to get mobile working for the poor.

  5. The top-down mindset is alive and well.

Suffice to say, all of these conclusions troubled me as I sat on the train home.

I’ve been thinking for some time about the future of m4d, and how far we’ve come over the past decade. I’ve written frequently about the opportunities mobile technology offers the development community and my fears that we may end up missing a golden opportunity. I’ve long been a champion of platforms and of understanding how we might build tools for people to take and deploy on their own terms. Yes, we should provide local entrepreneurs and grassroots nonprofits with tools—and where appropriate and requested, expertise—but we shouldn’t develop solutions to problems we don’t understand. We shouldn’t take ownership of a problem that isn’t ours, and we certainly shouldn’t build “solutions” from thousands of miles away and then jump on a plane in search of a home for them.

But this is still, on the whole, what seems to be happening. And this, I’m beginning to believe, is rapidly becoming ICT4D’s inconvenient truth.

A fulfilled future for ICT4D (of which m4d is an increasingly dominant part) is not the one I see playing out today. Its future is not in the hands of Western corporations or international NGOs meeting in high profile gatherings, and it’s not in American and European education establishments that busily train computer scientists and business graduates to fix the problems of “others.”

The whole development agenda is shifting. I predict we will see a major disconnect between what “we” think needs to be done, and what those closest to the problems think needs to be done. Call it disruptive development, if you like. As I told the UK Guardian in a December 2012 interview, “The rise of homegrown solutions to development problems will be most crucial in future. That means African software developers increasingly designing and developing solutions to African problems, many of which have previously been tackled by outsiders. This, I think, will be the biggest change in how development is ‘done.’”

I’m not the only person saying this. Many working at the intersection of African development and technology have been making the same argument for some time. The real change, and the big difference, is that this transition is finally happening. ICT4D is changing, and the balance of power is changing with it.

FrontlineSMS, a free, open source software I developed that has been used by developing world NGOs to distribute and collect information via text messages, is, I believe, part of this story. It started with field research in South Africa and the idea that users should be empowered to develop solutions to their own problems, if they so wish. There are many reasons why FrontlineSMS continues to work. One primary one is the decision of the new management team to shift software development to Nairobi, allowing us to tap into a rich vein of local developer and user talent. But fundamentally, FrontlineSMS’s platform continues to resonate with innovators, entrepreneurs, nonprofits, and problem owners across the developing world because it allows them to problem solve locally and effectively.

This local context is becoming increasingly powerful—as university students across Africa graduate with computer science and business management degrees; as innovation hubs spring up across the continent meeting a demand for places to meet, work, and network with like-minded problem solvers and entrepreneurs; and as investors launch funds that show they’re starting to take young African tech startups seriously.

This activity hasn’t escaped big business. Google, IBM, Microsoft, Nokia, Hewlett Packard, and Samsung have been opening offices across the continent, snapping up much of the talent in the process (ironically often at the expense—and despair—of local NGOs). But while technology businesses take note and develop local capacity that enables them to develop more appropriate local solutions, the broader development “community” seems trapped in an older mindset of technology transfer.

Technology transfer, of course, is big business—there’s no shortage of donor money out there for projects that seek to implement the latest and greatest proven Western innovations in a development context, and there are tens of thousands of jobs that keep the whole machine running. A lot has to change if the development community is to face these new realities, yet it’s looking more likely that the destiny of the discipline lies in the hands of the very people it originally set out to help.

So, if the future of ICT4D is not university students, NGOs, or business graduates devising solutions in labs and hubs thousands of miles away from their intended users, what is it?

Here is my prediction: Development is at a watershed moment, powered by accessible and affordable liberating technologies and an emerging army of determined, local talent. This local talent is gradually acquiring the skills, resources, and support it needs to take back ownership of many of its problems—problems of which it never took original ownership because those skills and resources were not available. Well, now they are.

The ICT4D community—educational establishments, donors, and technologists, among them—need to collectively recognize that it needs to adjust to this new reality, and work with technologists, entrepreneurs, and grassroots nonprofits across the developing world to accelerate what has become an inevitable shift. Or it can continue along its present path, and become increasingly irrelevant. “Innovate or die” doesn’t just apply to the technologies plied by the ICT4D community. It applies to the ICT4D community itself.

Complete Capital

We need integrated solutions, not just investment capital, to address social problems.

By Antony Bugg-Levine

Stanford Social Innovation

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(Illustration by Shannon Freshwater)

Although we all would like to avoid more stories of economic doom and gloom, those of us who work with social service agencies and their clients are witnessing a sector in crisis. In the United States, the withdrawal of federal stimulus funding is echoing through the social spending system, shrinking budgets as needs grow. Demand for services rose 20 percent again last year, while for many essential organizations government funding failed to meet demand and private funding failed to fill the gap, according a 2012 state of the sector survey from Nonprofit Finance Fund (NFF). A similar story is playing out around the globe. We cannot afford to hunker down and wait for economic relief that may be many years away.

So what are we going to do? As the co-author of the recent book Impact Investing and the CEO of an organization (NFF) that has been lending to nonprofits for 32 years, I certainly believe that tapping into the resources and expertise of for-profit investment is part of the answer. The rise of the impact investment movement is poised to unlock substantial new capital for social purpose. Innovative nonprofits are already rethinking the way they do business and are going to heroic lengths to extract maximum impact from every dollar. And increasingly, we have the data and knowledge we need to tackle social ills.

But the ultimate contribution of impact investing, and similar innovations, will not come in the form of interesting investments or channeling grant money more efficiently. Instead, it will come by addressing two fundamental challenges of our moment: How will developed countries sustain a safety net in the wake of macroeconomic and demographic pressures? And how will developing countries ensure that economic growth is more equitably shared?

This approach is not over-idealistic; it can be achieved. At NFF, our experience working with thousands of nonprofit clients has led us to believe that innovations like impact investing can reach their potential when these innovations are integrated more effectively. Innovation is not good enough and cannot be an end in itself. Instead, we need to mobilize grant funding alongside investment capital, organizational innovation, and government collaboration. We call this approach “complete capital.”To answer those questions requires us to reframe how we work. We need to move away from silo approaches when we ask “Where can I make meaningful loans?” or “How can I give away my grant money better?” Instead, we must ask “How do we work together to solve the social challenges that matter?”

Complete capital is more than just another way to rebrand public-private partnerships. It is a framework for recognizing the complete set of perspectives and capabilities required to address complex social challenges. We believe that effective approaches will mobilize four types of capital:

  • Financial capital that both pays for expanded project delivery (such as new ambulances or shelter beds) and builds healthy and sustainable organizations. The combination of grants and investments will differ for each intervention, but the complete capital approach will bring sufficient resources to sustain operations, change business models, and facilitate growth.
  • Intellectual capital that draws on rapidly expanding evidence about what works and what does not at the business model and systems level.
  • Human capital that translates bold ideas into action. More than just a capable management team and board, human capital is the leadership ecosystem of outside advisors, volunteers, and clients that organizations need to thrive in challenging environments.
  • Social capital that enables people and organizations unused to working together to collaborate effectively. We will need to reposition government, private funders, organization leaders, and their clients in new relationships. Trust and creativity will be essential for social capital formation, supporting and pushing us to confront our collective challenges and embrace innovative solutions.

The Necessity of Complete Capital

Three recent examples show why a complete capital approach is necessary.

Among New York City’s 4,000 major social service agencies, many of which perennially struggle to break even, the question in 2009 was how the social safety net could be preserved when city reimbursements were delayed in the wake of the financial crisis. Deep budget cuts followed in 2010 and 2011, while demand for services grew. With a further $112 million reduction in New York City social spending in 2012, many of these organizations are on a slow-bleed trajectory that threatens their survival and the communities that rely on them.

Enter complete capital: NFF is responding by launching the Community Resilience Fund (CRF), an integrated grant, investment, and advisory services vehicle targeting up to 100 core social service agencies in New York City. CRF will bring together $50 million in loans from commercial banks and private foundations, aggregate millions of dollars of grant money from multiple funders, and draw on a loan guarantee from the city of New York. It will offer clients advisory services that draw on the intellectual capital developed by NFF over years of working with similar organizations faced with the need to change their business models. And substantial social capital has been spent to bring bankers, donors, service providers, and the city government together at a time of crisis that has left many wary and suspicious.

Another example of complete capital is playing out in California. There, lack of access to affordable fresh food creates “food deserts,” which exacerbate health inequalities in poor communities. The California Endowment has recognized that leaving the food desert problem unsolved could undermine its ability to meet ambitious targets to transform health outcomes for communities across California. But even its substantial grant funds would quickly run dry before it could address this problem at a large scale.

So last year, using a complete capital approach, the California Endowment used a $30 million anchor investment to catalyze the launch of the California FreshWorks Fund. The fund has raised $264 million in investment commitments from a range of commercial banks, impact investors, and private foundations, and it makes grants available to support innovative ideas that are not investment-ready. This approach drew on intellectual capital developed by the Reinvestment Fund based on a similar program in Pennsylvania; the human capital of NCB Capital Impact, which runs the California FreshWorks Fund; and the social capital of first lady Michelle Obama, who has boosted awareness of this work as part of her national campaign to combat obesity.

And this is not just a US phenomenon. In India, Shaffi Mathur and Ravi Krishnan became inspired to create an ambulance company when personal experiences showed them the importance of emergency health care. With two friends and $400,000, they launched Dial 1298 for Ambulance, dispatching ambulances to Mumbai residences. For clients seeking treatment in private hospitals, the company charged a fee, allowing free ambulance service to poor clients. To raise additional revenue, Dial 1298 sold ad space on its ambulances. But by 2007, demand outpaced capacity and existing revenue sources could not adequately fuel the company’s growth.

Enter complete capital: Between 2007 and 2009, the Dial 1298 team mobilized financial capital from impact investors, securing $2.5 million from the Acumen Fund and then accessing mainstream equity finance. Dial 1298’s central innovation—the tiered pricing model that allows wealthy customers to subsidize poor ones—draws on visionary ideas developed by organizations such as the Aravind Eye Care System. Beyond financial capital, Dial 1298 has benefited from human capital support from Acumen Fund, which has lent strategic planning experts, and the London Ambulance Service, which has provided advice. Yet the main resource for its expansion is state government contracts, which would not be available if Dial 1298’s founders and many others had not organized campaigns to ensure that these contracts are awarded on merit, not patronage.

What will it take to expand this approach? As these examples show, mobilizing complete capital is not for the faint of heart. It takes longer to pull off. It requires us to connect organizations and individuals used to operating in silos and to overcome legacy mindsets and mutual suspicions. Few organizations can afford to carry the costs of staff time while waiting to bring diverse partners across the finish line.

If a simpler way could work, we should follow it. But the social safety net will not repair itself—and we cannot count on the economy to return to a state where silo approaches are the norm.

In our time of crisis, it may be tempting to batten down the hatches and ride out the storm. But I believe we need to rebuild the boat. And to do that requires more than innovative carpenters to hammer nails better and sawyers to mill the best boards. We need all hands on deck.

Premature Incorporation: Don’t let it happen to you.

By Kevin Starr | 10 | Dec. 11, 2012

Stanford Social Innovation Review

I’m spending an inordinate amount of time these days talking social entrepreneurs out of launching for-profits. Many drank deeply of the impact-investing Kool-Aid, and came away believing that going for-profit is the only way to drive financial and operational discipline, that it will give them immediate access to much more capital, and that they will find the holy grail of sustainability while the deluded do-gooders who went nonprofit are still grubbing around in the bushes for donations.

It’s mostly bullshit.

Instead, a typical scenario goes like this: Social entrepreneur has cool idea. Social entrepreneur launches for-profit venture with own/friends’/family’s dough, maybe even gets a chunk or two of seed funding. Hard work ensues. Money runs out. Venture is nowhere near ready for real investment. Venture goes off a cliff.

Sure, there are exceptions. Sometimes those revenue projections turn out to be accurate. Sometimes the entrepreneur is ridiculously good at raising money. Sometimes they just get lucky. Mostly, though, it follows the script, and here’s why: Social entrepreneurship is largely about overcoming market failure. That is a lengthy and expensive undertaking, and even if you manage to pull it off, the result is rarely lucrative—and the more profound the social impact, the more expensive and less lucrative it’s likely to be.

It’s expensive because there is usually a ton of R&D to do before you emerge with a viable business model. It’s one thing if you’re just tweaking a proven microfinance model or adding a mobile platform—wow!—to something that already works. It’s another thing entirely if you’re tackling a big problem in a new way, in a place where markets don’t work very well. You’re going to need a lot of runway to go through all the iterative cycles it will take to end up with something that makes sense to people who expect to get their money back.

You need—and ought to get—free money to do it. Philanthropy, done well, is about making good things happen that wouldn’t have happened otherwise. When you come up with a high-impact solution that can spark a new industry, that’s a public good. I used to think that spending philanthropic money on something that someone else will someday make money from was somehow unethical. I was wrong. When you can make the case that it generates big social impact that wouldn’t have happened otherwise, it’s a home run for philanthropy and something that we ought to be searching for.

But if you launch right away as a for-profit, you’ll likely end up an orphan: Philanthropists won’t know what to do with you, and investors will rightly view your firm as a lousy place to put their money. You’ve made it hard for philanthropists to give you grants, and you offer investors an unlovely combination of high risk and low returns. In short, you’re screwed.

Some point to hybrids as an answer. I don’t like them. Trying to remember their convoluted structures is like waking from a dream—after a few moments of clarity, the whole thing slips away. Worse, they too often succumb to the temptation to dump all the questionable parts of the business model into the nonprofit side. Aside from the inherent lameness of that, the result can be a sort of stealth-subsidized business model that will never scale. The other big problem with hybrids is that if one side of the arrangement bombs, it pulls down the other—and in any case, the two sides rarely grow at the same pace. I’ve seen a few hybrids that work well—typically with the nonprofit side focused on R&D to drive new impact—but by and large, I think they’re messy one-offs.

I’d like to see a sequential approach become the norm: If you have a potentially high-impact new idea, you start out as a subsidized nonprofit that is focused on developing a scalable business model worthy of real capital. If you manage to get there, the organization flips into a for-profit and raises money from investors. The emerging business must be structured to ensure that it stays on mission, but that can be managed. We haven’t worked out all the kinks yet, but it’s cleaner than the alternative and more likely to produce a business that really can scale via the market. All we need to make it work are philanthropists and investors who know their jobs and are willing to try something (kind of) new.

And if your impact is profound but your breakeven point stays over the horizon, you can simply remain a nonprofit. You can’t sell equity, but you can get grants and cheap loans. Grants are free money, and zero-interest loans to nonprofits are not unheard of. Better a struggling nonprofit than a dead for-profit, and given the overall performance of social enterprise equity investments so far, would-be impact investors might want to save themselves a headache and just give you the money instead. They probably weren’t going to see it again anyway.

As weird as it sounds, for your lovely idea to survive and get to scale, you may need to dodge the world of impact investing for a while. Remember all that patient capital that was supposed to show up for all you and your fellow social entrepreneurs? Most of it was so lacking in urgency that it never left home. It probably never will show up: It doesn’t make philanthropists feel good, and it doesn’t make investors feel smart. Given that, you might want to stay in a cozy nonprofit burrow until your business is strong enough to survive above ground. When—and if—you do poke your head out, keep in mind that the right financial structure is the one that provides the best path to the maximum social impact. Nothing else really matters.

In West Bengal, Cashless Microfinance Opens Doors

NY Times 26th September, 2012

In West Bengal, Cashless Microfinance Opens Doors for Women

By SONIA FALEIROGolehar Sheikh with her daughters outside their home in Belekhali village in West Bengal, April 2012.

Sonia Faleiro

Golehar Sheikh with her daughters outside their home in Belekhali village in West Bengal, April 2012.

CANNING, West Bengal — A debt crisis in India’s microfinance sector in Andhra Pradesh in 2010 revived the question of how to help the hard-core poor without forcing them into a debt trap. Now it appears that microfinance institutions may have had an alternative all along.

The hard-core poor, or people who live far below the national poverty line, are vulnerable to even small changes in circumstance, from a shift in daily wages to the onset of heavy rains. Repaying a microloan can become an untenable proposition.

Exploring subcultures and forgotten communities.

This is particularly true of rural women, who accounted for 97 percent of microfinance loans in India in 2011 according to the data center MixMarket, but are less likely than men to be literate or to have the same skills and experience to earn as much. This is where a handful of microfinance institutions — among them Bandhan, currently India’s largest such lender — come in.

Bandhan’s Targeting the Hardcore Poor program was inspired by one pioneered by BRAC, a community development group, in Bangladesh in 2002. Bandhan’s program is not for profit and offers cash-free grants to selected participants in poor villages for 24 months. A “grant” refers to everything a borrower may need to start and ply a sustainable trade — everything, that is, but cash.

A crucial aspect of the program is lifestyle changes to advance good health and critical awareness. A borrower is taught to manage money, but is also made aware of the need to drink clean water and eat two meals a day. They’re schooled in basic numbers and letters.

The borrower, who is often a woman, never has to repay the cost of the goods. Only if she graduates from the program, though, by making a profit and adopting the lifestyle changes, will she be considered for a micro-loan, and, therefore, entry into the microfinance system. At this point she’s considered dependable enough to handle money, protecting herself while also reassuring the lender.

Sabuajaan Mollah, a resident of Dhuri village in West Bengal goes door to door selling trinkets.
Sonia Faleiro

Sabuajaan Mollah, a resident of Dhuri village in West Bengal goes door to door selling trinkets.

Sabuajaan Mollah, 54, lives in Canning, one of West Bengal’s poorest areas. She goes from door to door selling trinkets. Mrs. Mollah, who’s widowed, wasn’t just provided with the trinkets, but also a cane basket and plastic bags to carry them in.

When Bandhan approached Mrs. Mollah in December, she, her elderly mother and her 16-year-old daughter were surviving on just one meal a day. She worked as a domestic help in Kolkata, several hours away. At times her employers paid her in boiled rice. Mrs. Mollah now earns an average of 300 rupees ($5) a day and puts aside 10 rupees a week. It’s a small amount, but it’s more than she’s ever been able to save. “Now we eat twice a day,” she says.

Although the grant is cash-free, the program isn’t. Mrs. Mollah is given a livelihood stipend of 140 rupees a week to support her during the program.

Golehar Sheikh, who lives a few hours away from Mrs. Mollah, is who Mrs. Mollah hopes to become in 24 months. Mrs. Sheikh, 36, successfully graduated from Bandhan’s program in 2009. Since then she’s taken three successively larger microloans and hopes to soon own her own shop.

Every evening, Mrs. Sheikh takes a train to Kolkata, where she buys beef from the wholesale market on Park Street. At night she sleeps in the market, in a shared room paid for by local traders who want to encourage poor entrepreneurs like her to take their time shopping. The raw meat sits at the foot of her mat, bundled in layers of cloth, plastic and sacking.

At dawn, Mrs. Sheikh returns to Canning, covering as many as five villages on foot with her basket on her head. Beef is forbidden to Hindus, so Mrs. Sheikh, who’s Muslim, confines herself to Muslim-majority villages.

Eight years ago, after being abandoned by her husband, Mrs. Sheikh and her two daughters moved into a shack at the edge of someone else’s field. She begged for alms and foraged for fruit. Today, she lives in a two-room hut and has land of her own. Hers is still a difficult life, but she has assets she can count on should her luck again change. “I have dreams for my daughters,” she says. “And now I can help them come true.”

SKS Microfinance, the lender that triggered the Andhra Pradesh crisis, was also inspired by BRAC to create a similar program, which lasts 18 months. And Trickle Up, which offers a three-year program in four states, says that 100 percent of its borrowers, who are all women, have increased their net assets by an average of $330. Prior to graduating, the women had minimal assets and most were in debt. These programs, like that of Bandhan, are not for profit, and are funded largely (or, in the case of Trickle Up, entirely) by donors.

In 2011 the M.I.T. economist Abhijit Banerjee co-authored a randomized test of Bandhan’s program. He says that the team found “very strong positive results” and that it was clear that “beneficiaries were substantially better off in terms of how much they ate, measures of depression, schooling for children and other indicators.”

The hard-core poor have no liquid assets, which they require to pull themselves out of poverty. But putting mere cash in the hands of people whose immediate concerns are regular meals and safe shelter is risky for them and for their lenders.

This is why the bridge programs inspired by BRAC are so important. They offer the poor opportunity but without the initial risk of debt. But they also demand commitment and require change in the habits that may hurt the potential gains from microloans.

“I have a daughter to marry off,” says Mrs. Mollah. “So I work all day and worry all night. But I’ve seen a transformation in my life. What more can I ask for?”

Sonia Faleiro is the author of Beautiful Thing: Inside the Secret World of Bombay’s Dance Bars. Read her latest OpEd for The New York Times, ‘For India’s Children, Philanthropy Isn’t Enough.’

Rockefeller’s High-Impact Investment

Huffington Post
David Bank

19th September, 2012

The provenance of the term “impact investing,” according to the official founding myth, was a 2007 gathering of leaders on Lake Como, high in the Italian Alps, at Bellagio, the Rockefeller Foundation’s spectacular retreat center. The group reconvened the next year, and Rockefeller’s board approved a $38 million impact investing initiative.

It was not quite a present-at-the-creation moment, because social investing, social enterprises, social entrepreneurs and a whole world of community development finance had existed for decades. But after grants and investments to 30 core allies, it can be said that the two Bellagio meetings launched much of the network of organizations and activities that now define impact investing.

Rockefeller’s impact investing initiative was slated to end about now, but earlier this year the board extended it through 2013. With sunset approaching, the foundation has issued two self-assessments of the initiative’s impact, prepared by the consulting firm E.T. Jackson and Associates. “The initiative succeeded in defining the field of impact investing, thus enabling collective action from diverse stakeholders,” concludes Unlocking Capital, Activating a Movement, the foundation’s internal report.

Indeed, if impact investing grows as rapidly as the projections made by Rockefeller’s own grantees, the impact investing initiative may well become a case study in philanthropic leverage. The external report, Accelerating Impact, cites:

  • A 2011 report from J.P. Morgan, based on surveys by the Global Impact Investing Network (GIIN), suggesting that approximately 2,200 impact investments worth $4.4 billion were made in 2011, up from 1,000 deals worth $2.5 billion the year before;
  • A 2008 estimate by the Monitor Institute estimated the industry could grow to $500 billion within five to ten years, representing an estimated 1% of global assets under management;
  • Another J.P. Morgan report in 2010 estimating a profit potential ranging from $183 billion to $667 billion, and invested capital in the range of $400 billion to nearly $1 trillion, in just five key areas.

There are of course significant caveats and footnotes on all of those projections, and all standard disclaimers about forward-looking statements, and more, should apply.

But what may be more noteworthy is that the GIIN, the seminal Monitor Institute report (Investing for Social and Environmental Impact) and even the two J.P. Morgan reports were all financed by Rockefeller. As are the Impact Reporting and Investment Standards (IRIS) and Global Impact Investing Rating System (GIIRS), the two main reporting and data-gathering efforts. Acumen Fund, the pioneering social venture fund that itself was originally spun out of Rockefeller Foundation, was instrumental in IRIS as was B Lab, the nonprofit certification body that annoints “B-Corps.” B Lab is also managing GIIRS, and rolling out an analytics platform to rate companies and funds, all backed by Rockefeller. Rockefeller also finances the valuable policy work conducted by Insight at Pacific Community Ventures and the Initiative for Responsible Investment at Harvard University. And dozens of other mutually reinforcing projects and research efforts.

That makes one of the biggest ‘if’s in the future of impact investing, what happens if — more like, when — this whole network loses the cachet, not to mention the funding, conferred by Rockefeller. The most widely read section of Accelerating Impact may be Appendix C, which makes recommendations for the remainder of the funding. The appendix makes clear that the gravy train is over: one recommendation is to help in “smoothly and constructively winding down and handing off” even the most successful projects. The GIIN (“continued active support”), along with IRIS and GIIRS (“active promotion”) are called out for some level of ongoing engagement. But the action is already shifting to the targets of Rockefeller’s “two-year transitional phase.”

Those targets include “platforms and networks” in places like Kenya, India, Hong Kong and Mexico and new investment products and distribution platforms , particularly that can engage “larger investors that have shown an appetite for making impact investments.”

Perhaps most significantly, if a bit cryptically, Rockefeller is seeking to “test ways of improving investment readiness on the demand side.” That’s impact industry-speak for expanding the pipeline of investment-ready ventures with management teams, business plans and the ability to scale up operations. That reflects the new conventional wisdom that the supply of capital may have outstripped demand in the form of attractive deals (see Impact IQ’s very first post, “Social Bubble”). Expect a raft of organizations to try to pivot from accelerating investment to accelerating entrepreneurship and operational capacity.

There are worse legacies Rockefeller could leave than “too much money” for social and environmental ventures. But the full assessment of Rockefeller’s impact investing initiative will have to await its actual exit, when the new investment marketplace it helped spawn will grow, or not, on its own.

Cambodia’s Largest MFI Boosts Green Farming Loans

Phnom Penh Post, 01 June 2012

Cambodian microfinance institution PRASAC says it is bolstering its green credentials by increasing loans for eco-friendly farming methods in the kingdom.

Speaking at the Asia-Pacific Rural and Agricultural Credit Association (APRACA) General Assembly in Siem Reap, Sim Senacheert, President and CEO of PRASAC, said the institution is “committed to providing and developing more green financing to the rural people for their livelihood improvement and environmental protection in particular”.

PRASAC, which was formed in 1995, provides microfinance services to the rural population of Cambodia. Sim said that PRASAC had a vital role to play in maintaining the environment and added that “it is important to improve the resilience of the rural people with the rural financing”.

PRASAC said it is particularly proud of its recent initiative to provide a biodigester financing program. Biodigestion is the process of managing biodegradable waste and turning it into energy.

By the end of April, PRASAC said it had provided biodigester loans to roughly 5,800 borrowers in 13 provinces, with a loan portfolio of more than $3 million.

The National Bank of Cambodia and the Cambodia Microfinance Association organised the Siem Reap gathering, which was presided over by Chea Chanto, the Governor of the National Bank of Cambodia.

The objective of the event is to strengthen the resilience of smallholder farmers through rural finance innovations. There were around 250 participants including local and international bankers and microfinanciers.

PRASAC currently is the largest microfinance institution in Cambodia, and provides loans and savings to clients in 24 provinces and cities.

As of April, PRASAC said it has provided loans to 117,000 borrowers with more than $158 million of loans. It had 48,000 depositors with more than $12 million in savings.

ANDE 2011 Impact Report

ANDE’s 2011 report on small and growing businesses (SGB) reveals progress and strides in building a new kind of investment community that is committed to both social and financial returns. The 2011 Impact Report is a one-of-a-kind publication offering data on the current state of the SGB sector, the impact of ANDE’s members, and a comprehensive review of its work this past year.

Read the full report: ANDE_2011_Impact_Report_Final.