Impact Investing and Beyond: support for social enterprises in emerging markets

Transcription

1 Impact Investing and Beyond: support for social enterprises in emerging markets Shelagh Whitley, Emily Darko and Grace Howells May 2013 Supported by the Shell Foundation

2 AGENDA Introduction, Shell Foundation Roundtable Introductions Research Overview, ODI 1. Why? Need for this work Discussion Point: Existing Data and Project Aims 2. How? Project methodology Discussion Point: Frameworks, Definitions and Typologies 3. What? Pilot Survey Findings Discussion Point: Survey Findings and Feedback Next steps 2

3 Confidentiality Note Please do not comment on the survey completion process if you want your organization s participation to remain confidential 3

4 1. Why seek to map the landscape of support to social enterprises in emerging markets?

5 There are strong indications of increased support for social enterprises in emerging markets There is increased interest in how new business models can deliver innovative solutions to social and environmental problems Reports estimate that enormous amounts of money are potentially available to support social enterprise growth However, the scale of actual finance and support provided for social enterprises in emerging markets remains unclear.

6 Why? [a]s the industry evolves it will be important for leaders to build, share, deepen and continuously update a comprehensive global map of all the actors in the field and to use this map to facilitate collaboration and lever innovation to maximize and accelerate the field s aggregate impact. Harji and Jackson (2012) the lack of data prohibits the follow of capital, with too much reliance on anecdotes and case studies. Simon and Barmeier (2010) This is a very ambitious research project, but there is a gap here. Not many are looking at the ecosystem more broadly. (interviewee) There isn t a lot of data out there to show what s happening in this space we still don t know where the white spaces are...it would be a great service to the industry to have the kind of data you re intending to collect (interviewee) 6

7 Why? Literature review 1. Research presenting relevant primary data 12 reports Interviews and possible collaborations (next phase) 2. Research which informed our approach 17 reports Used to inform survey questions, definitions and overall research approach 3. Other research 40 reports Reviewed no action taken 7

8 Why? Stakeholder Interviews Ashoka Aspen Network of Development Entrepreneurs (ANDE) Centre for Global Development (CDG) Citi Microfinance and Citi Foundation Dalberg Group UK Department for International Development (DFID) European Venture Philanthropy Association (EVPA) Global Impact Investing Network (GIIN) infodev JP Morgan Social Finance Monitor Inclusive Markets (Monitor Deloitte) Pacific Community Ventures Insight (PCV Insight) Shell Foundation (and investee social enterprises: Grofin, Envirofit and MKopa) 8

9 Why? The aim of the project was to develop and test a methodology that we believe over the longer term will allow us to: provide a comprehensive picture of support (both financial and non-financial) to social enterprises, and to the market infrastructure within which they operate; support assessments of current activities and help identify opportunities for new interventions and partnerships; and determine potential for an annual / bi-annual mapping of support to social enterprises in emerging markets. 9

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11 Existing T data sets 200

12 Discussion Points Existing data and gaps On-going or planned research overlapping with this study Maximising collaboration with other data collectors Questions or comments on goals of research

13 2. How did we develop and test our methodology?

14 How? PILOT SURVEY to determine if we could Collect data on actual investment and support to: 1. social enterprises at different stages of their development, and 2. market building activities and market infrastructure. Map the type of investment and support provided, in terms of: 1. instruments used (financial and non-financial), 2. actors involved (public and private), 3. sectors supported, and 4. regions targeted (in emerging markets). 14

15 How? Definitions The Study: Sought to review support to social enterprise specifically as opposed to the wider field of SMEs and BOP businesses. Recognises an important distinction between job creating businesses in poorer areas of the world, and enterprises which use business approaches to tackle social and environmental issues. Chose not to confine the definition to social enterprises which re-invest all profits in either their own business or in socially and environmentally beneficial external activities. 15

16 Social Enterprise Growth Path* (SEGP) *Adaptation of stages of pioneer firm development From Blueprint to Scale, Monitor Inclusive Markets

17 17 Social Enterprise Market Infrastructure (SEMI)

18 How? Definitions - Actors 18 N.B. Diaspora organisations were also recommended as a category, but not included in this pilot phase

19 19 How? Definitions - Instruments

20 Discussion Points Questions and Comments on: Social Enterprise definition SEGP framework SEMI framework Actor definitions Instrument definitions

21 3. What did we learn?

22 What? Respondents Actor categories Contacted NGOs and charities 1 Foundations (corporate and private) 6 Aid agencies 1 Development Finance Institutions (DFI) 4 Investment fund 9 Commercial bank 2 Specialist bank 1 Knowledge 1 organization TOTAL 25 Actor categories (aggregated) NGOs, charities and foundations (corporate and private) Aid agencies and DFIs 3 Investment funds 4 Commercial banks Specialist banks Knowledge organizations TOTAL 10 Responded 8 provided a full set of data. 2 organisations provided a partial data set as only specific regional offices / programmes within the organisation were able to respond

23 What? Financial years 7 organisations provided 2 years of data 3 organizations provided 1 year of data % 47% 41% Given the small sample size, data has not been disaggregated by year in these findings findings include total data provided between financial years

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27 Support by actor: SEGP

28 Support by instrument: SEGP

29 Support by actor: SEMI

30 Support by instrument: SEMI

31 Expected returns by actor

32 Duration of support by actor

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36 Discussion Point: Survey Findings Feedback and Comments on pilot survey findings: Small proportion of support to market infrastructure and through intermediaries Support at Grow stage of the SEGP Grant support to SEGP and SEMI Expected returns limited concessional Duration of support support for less than 5 years Sector split and categories Regions and countries by income

37 Discussion Point: Survey Feedback Response rate and time to complete Actor categories Social enterprise data SEGP and SEMI frameworks Data bysector, income level, region

38 Universe of actors Phase 2 Actors identified supporting social enterprises 511 Total organisations categorised (by actor type) 398 COUNT % OF TOTAL CATEGORISED Investment Firm or Fund (inc. advisors) % Foundation 68 17% Others (inc. SE consultants and intermediaries) 57 15% DFI, Aid Agency, Development Bank 43 11% Charity or NGO 31 8% Specialist or Commerical Bank 22 6% TOTAL % 38

39 Next steps Your inputs: Additional research questions Partnerships Data Networks

40 ODI is the UK s leading independent think tank on international development and humanitarian issues. We aim to inspire and inform policy and practice to reduce poverty by locking together high-quality applied research and practical policy advice. Overseas Development Institute 203 Blackfriars Road, London, SE1 8NJ T: e.darko@odi.org.uk s.whitley@odi.org.uk

41 Support to SEGP actors and instruments NGO, Charity, Corporate or Private Foundation Investment Fund Aid Agency or DFI Grants 71,642, ,124,400 Debt 4,967, ,430,120 13,661,600 Equity 61,998,000 11,438,000 0 Guarantee Non financial 2,842,461 16,979,880 2,852,770 Third Party Service Contracts 1,360, ,000 TOTAL 142,811, ,848,000 24,788,770 41

42 Support to SEMI actors and instruments NGO, Charity, Corporate or Private Foundation Investment Fund Aid Agency or DFI Grants 36,043,492 10,000 5,600,000 Debt 0 4,145,780 0 Equity Guarantee Non financial 956, ,220 1,209,430 Third Party Service Contracts 2,100, ,000 TOTAL 39,100,560 4,544,000 7,159,430 42