The Brief | August 22, 2018

Challenging financial exclusion, Finance in Motion’s sustainable forestry fund, UBS’ development-bank bond fund, the Fortune 56

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Featured: Impact Voices

Extending invitations to the financial system means challenging the roots of exclusion. For all the talk about the value of bringing individuals into the fold of the formal financial system, there is little awareness of how financial exclusion makes the lives of the working poor more insecure, costly, and constricted. In a guest post on ImpactAlpha, Lexi Doolittle of the international nonprofit S3IDF paints a picture of a waste worker in India, who barely survived the government’s 2016 demonetization policy, which disproportionately impacted informal workers reliant on cash.

“Picture for a moment one of these waste workers who made it through demonetization and begins to expand her business,” Doolittle writes. Identifying streets where she can expand her service, she seeks to buy a truck. The dealer wants to sell her the truck. The bank wants to extend a new loan to a hard-working entrepreneur. The community wants more effective trash collection. Plastics and metal recyclers want more materials. And the entrepreneur wants to make more money to provide for herself and her family. But because she lacks skills, networks, and even paperwork, she is not seen as creditworthy. “None of these positive benefits can materialize,” Doolittle writes. Proven interventions include: guarantees for bank loans before a credit history is established; technology buy-back agreements in case of default; and in-depth trainings for loan officers and entrepreneurs.

Read, “Extending invitations to the financial system means challenging the roots of exclusion,” by S3IDF’s Lexi Doolittle on ImpactAlpha.

Dealflow: Follow the Money

Leapfrog Ventures backs Rwandan microcredit startup Exuus. Exuus is a Rwanda-based startup trying to help unbanked rural Rwandans get access to credit by digitizing community savings groups. Leapfrog Ventures, not to be confused with the billion-dollar impact investor LeapFrog Investments, is a $4.5 million venture fund out of Japan. Its seed-stage investment in Exuus is part of a strategy to back 80 early-stage African startups. Check it out.

Finance in Motion and Unique raise $60 million for sustainable forestry fund. The German impact investment firm and the timber advisory firm are partnering on an investment fund to back sustainable forestry projects in high-risk deforestation areas in Latin America and Africa. Fundraising for the Arbaro Fund has been slow. The fund announced in 2016, has reached a first close towards a target $200 million total raise. Here’s what we know.

UBS offers development-bank bond fund as a fixed-income alternative. The Swiss bank, which has pledged $5 billion (of its clients’ money) to SDG-aligned investing, has offered private clients access to big-name impact funds like TPG Growth’s Rise Fund. New options include the UBS Sustainable Development Bank Bond Fund, a fixed-income fund invested in development bank bonds from the World Bank and multilateral banks such as the Asian Development Bank. Another, the UBS Engage For Impact Fund, will invest in companies with “a clearly identified potential for additional impact that the advisor intends to drive through engagement,” according to SEC filings. Here’s more.

Signals: Ahead of the Curve

India’s Reliance Jio tops Fortune’s list of companies changing the world. The Indian telecom has jumpstarted India’s digital economy by connecting 212 million customers to speedy, dirt-cheap internet in less than two years. Fortune’s annual list of 56 companies “using the profit motive to help the planet and tackle social problems” come from 19 countries. Multi-billion-dollar firm Xylem, in Rye Brook, N.Y., ranked No. 7 for its water efficiency and treatment solutions, including the pumping system that helped free the Thai youth soccer team from the flooded cave. The Swiss industrial tech firm ABB, No. 8, has installed 7,000 fast-charging stations for electric vehicle worldwide, with plans to install hundreds in the U.S. next year.

  • Companies with under $1 billion in revenues. The 200 million customers of fintech firm Wari in Dakar, Senegal have exchanged more than $5 billion through 500,000 outlets in banks, shops, and freestanding kiosks. Aucma in Qingdao, China, produces the Arktek portable cooler than helped curb the Ebola epidemic in the DR Congo this summer by transporting vaccines to areas where the power grid is unreliable. Mapping the changemakers.

Agents of Impact: Follow the Talent

There’s still time to register for TriLinc Global’s webinar today at 10am PT / 1pm ET on women and impact investing, featuring TriLinc’s Gloria Nelund and impact investing consultant Sonya Dreizler… Blended-finance platform Convergence is looking for a managing director for Latin America, the Caribbean and Asia… “There is no wrong side of the tracks” says Bronze Investments’ Stephen DeBerry in a seven-minute TED Talk. Wind may blow pollution eastward, says DeBerry, but “The human design decisions we make to separate ourselves are not natural.”

— August 22, 2018.