Investing in SMEs in raw materials outside the banking market and in emerging economies

06 Oct 2016 by Ivan Agabekov, CFO, INOKS

How did INOKS become one of the largest investors in raw materials? INOKS Capital does not invest in raw materials through traditional markets as such, (futures or physical). INOKS is an independent asset manager which manages its own investment vehicles. First of all, our strategy involved the supply of short term working capital to SME’s in emerging countries.  We are mostly interested in sub-Saharan Africa and the countries of the former Soviet Union, but we have also invested in South America and South-east Asia.  We target non speculative companies which are active in the raw materials sector, notably those involved in agricultural commodities (grains, softs or vegetable oils) and certain animal proteins, as well as metals (non-precious) and energy. We have one prerequisite: the added value chains of these commodities must respect clearly defined criteria for durability and impact. When we launched this strategy, we noticed that numerous companies which had been established for several generations were situated outside the banking market and lacked working capital. These companies possess expertise, what they lacked was the capital required for purchasing the inputs and to plant, harvest and transform. Unfortunately, the banking market is often deficient when it comes to SME’s, particularly in … Read more

New financial instruments will help increase money flows and scale our impact

04 Oct 2016 by John Fairhurst

1.4 trillion dollars, that's how much extra money will be needed each year so low- and lower middle-income countries can reach the ambitious sustainable development goals and lift the world's poorest 700 million people out of poverty by 2030, according to a recent UN report[1]. That's a huge price tag especially when you contrast it with the fact that this year the OECD reported that Official Development Assistance totaled a "mere" 134 billion dollars. So how are we going to bridge this funding gap? It seems clear that getting more people and more money involved will be crucial given pressures on traditional funding streams. We, and many others, believe this means there must be a major role for the private sector. And to some extent it is already happening. Today, global aid is dwarfed by the flows of investment, remittances, and other sources of private capital to developing countries. Encouragingly, the UN report recognizes this and estimates that countries will be able to raise the money from public funds and through private sector financing. But simply increasing the levels of aid alone is not the answer. Despite billions being spent on aid programs each year, all too often it's not clear … Read more

Expanding the venture capital landscape in Africa to develop the entrepreneurship ecosystem

03 Oct 2016 by Emanuele Santi

Over the past decade the development community has focused on supporting early stage business, while recognize the limits of traditional approaches and the widely entrenched disincentives for local Banks to lend to small business. This has resulted into an exciting wealth of experimentations. Start-up competitions and challenge funds of all sort are mushrooming everywhere not only in advanced economies, but also in developing countries and Africa in particular.  While this is bringing the clear benefit of opening up the space of financing, such programs are now outgrowing their piloting and testing phase. From a wave of enthusiasm, a new wave of skepticism is also emerging, as such programs are fragmented, often characterized by self-serving interests of particular donor or funder and more importantly failing to reach scale and sustainability. A new generation of serial start-uppers is emerging and jumping from competition to competition, while a large segment of entrepreneurs mainly in the rural areas are not touched by this new wave of opportunities. Yet the main challenge is and remains the lack of a solid entrepreneurship ecosystem at country level. Programs are often too small to make an impact and without a strong anchoring into the local ecosystem. The experience of … Read more

Supporting economic development and reaching the SDGs through impact investing

03 Oct 2016 by Najada Kumbuli

How does Calvert Foundation support innovation and social entrepreneurship? Entrepreneurship and innovation are two of the most prevalent terms in the vocabulary of any impact investor, including us at Calvert Foundation – and for many of us, the reason why we get out of bed every morning. For the past 21 years, we have been testing different financial and partnership models to scale positive impact created by social entrepreneurs across the globe. When we first started our investment journey much of our focus was on microfinance – a field that primarily focuses on unbanked micro entrepreneurs whose business model aims to both be profitable and have a significant social impact. We soon realized that we were only addressing a sliver of the “access to finance” problem that was affecting people in different ways across the world. If we wanted to move the needle in terms of financial inclusion, job creation, wealth building and resource preservation, we had to develop a more holistic investment approach to ensure that the capital needs of all underserved communities were being met. Today our investment model is built on three principals: Strengthening the financial intermediation of capital so that capital can flow in a more efficient … Read more

How to unleash the potential of Social Enterprise growth

30 Sep 2016 by Jonathan Normand

A social venture needs to manage numerous bottlenecks all along the stages of their journey from developing the right solutions the market needs to accessing adequate funding to scale up. … Read more