The Brief: Banking Africa’s traders, Veris’ new backer, KKR’s eco-restoration, Bear Peak’s community solar, policies for private capital for public good

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Greetings, Agents of Impact! Thanks to the hundreds of subscribers who turned out for yesterday’s carbon Call. We’ll have a writeup and a replay in Friday’s Brief. 

Next Call: Policies to catalyze private capital for public good. The principles of impact investing have long captured bipartisan interest, and the past year has seen progress on several of the field’s top priorities (see Impact Voices, below). Fran Seegull of the U.S. Impact Investing Alliance; Satyam Khanna, a former senior policy advisor for climate and ESG at both the SEC and EPA; and other Agents of Impact will talk disclosure, accountability and engagement on Call No. 38, Tuesday, Feb. 22 at 10am PT / 1pm ET. RSVP today.

Africa’s biggest bank turns to fintech to extend lending to informal businesses. It may take the threat of a fintech disruption to get local commercial banks focused on lending for micro and small businesses in Africa and other emerging markets. Fintech startups and local fund managers in the past two years have made a small dent in the financing gap for such businesses, estimated to be as much as $5 trillion each year. Fintech was the hottest category for venture capital investing last year; underbanked emerging markets are prime targets of opportunity. That surge has spurred several of Africa’s largest banks to adopt fintech innovations to reduce transaction costs. Such businesses account for an estimated 40% of Africa’s GDP and more than 80% of consumer good sales. “The aim is to reposition the organization in terms of how we help our clients,” says Wendy Pienaar of Standard Bank, Africa’s largest bank. “We want to do much more to help traders and farmers.”

Standard Bank is working with South African fintech venture Nomanini to offer informal retailers inventory financing and small lines of credit. The first test of its product is with Nestlé. Through the app, retailers can secure credit from Standard Bank to cover the upfront cost of goods ordered from Nestlé and its network of local distributors. Standard Bank has also developed OneFarm, an app hosted by agtech venture HelloChoice to facilitate access to financing, inputs and markets for Africa’s smallholder farmers. “Banks and other financial incumbents are a necessary part of this ecosystem,” says Wim van der Beek of Amsterdam-based Goodwell Investments, an early backer of Nomanini. “There’s nobody who can borrow as cheaply in markets as banks.” Pan-African bank Ecobank Group hosts an annual fintech challenge and partners with African fintech ventures to help small businesses transition to e-commerce. KCB Bank Kenya has developed a range of micro-business lending products. “Fintechs give us amazing agility,” says Pienaar. “They give us an ability to get into a market fast.”

Keep reading, Africa’s biggest bank turns to fintech to extend lending to informal businesses,” by Jessica Pothering on ImpactAlpha.

Dealflow: Follow the Money

​​Rosemont takes a minority stake in Veris to secure employee ownership. Pennsylvania-based Rosemont will acquire a 24.9% equity stake in Veris Wealth Partners. The San Francisco-based wealth management firm, which manages more than $2 billion in assets, had been looking for a partner to help maintain its independence, Veris’ Stephanie Cohn Rupp told ImpactAlpha. “It was a dealbreaker to bring in someone that was going to squeeze us at the highest possible margins and not respect our commitment to impact.” The minority investment will give Veris access to long-term capital to scale its client activity in regenerative agriculture, sustainable forestry, racial and gender equity, and other impact opportunities, said Cohn Rupp.

  • Impact management. Rosemont, which recently transitioned from a private equity fund structure to a permanent capital investment model, specializes in investing in employee-owned asset and wealth management firms. “Our focus is on helping asset and wealth managers with ownership succession,” said Rosemont’s Brad Mook. Impact investing “is an area we’ve been interested in and one that we’ll continue to lean into,” he said. Rosemont invested in Boston Common Asset Management through one of its private equity funds; it sold its stake last year.
  • Dive in

KKR Global Impact backs Resource Environmental Solutions for restoration and infrastructure. Texas-based RES develops green infrastructure, including stormwater management and restoration projects for wildlife habitat, wetlands and stream mitigation. KKR, which first backed the company in 2016, made the new investment from its $1.3 billion impact fund alongside Onex Corp.’s $7.2 billion fund, Onex Partners. “Our access to additional capital will help us to continue with product line expansion into coastal resiliency, large scale water quality projects, new mitigation banks, and carbon solutions,” said RES’ Darrell Whitley. Share this post.

Dealflow overflow. Other investment news crossing our desks:

  • Lacuna Sustainable Investments backs Bear Peak Power to build solar energy and storage assets in underserved U.S. communities.
  • Entelligent secures Series A funding to help asset managers, banks and insurance firms evaluate long-term climate risks.
  • Mumbai-based EV charging-tech startup BrightBlu raises $1.6 million from Dutch clean energy conglomerate Koolen Industries.
  • USDA’s Natural Resources Conservation Service awards $690,000 to Croatan Institute and partners to develop a digital food marketplace that values the social and environmental costs and benefits of farmed foods.
  • The Off Grid Electricity Fund invests $230,000 in Alina Eneji to increase access to reliable and affordable energy in rural Haiti.

Impact Voices: Policy Corner

Progress on a dozen policies to mobilize private capital for public good. There is no shortage of challenges facing leaders in Washington, and the coming midterm elections will increasingly dominate the headlines. “Impact investors must continue to push for policies that will catalyze private capital to improve the lives of Americans and help address our ongoing social, economic and environmental crises,” U.S. Impact Investing Alliance’s Fran Seegull writes in a guest post on ImpactAlpha.

  • Priorities. One big win was the historic investment of nearly $12 billion into community development and minority deposit institutions to improve access to capital for minority entrepreneurs. Next up: Pushing the Senate’s U.S. Innovation and Competition Act, or the America COMPETES Act in the House, across the finish line. “The Biden-Harris Administration has looked to partner with the private sector to empower a whole-of-government approach to advancing inclusive economic growth,” says Seegull.
  • Policy Call. Seegull, along with Satyam Khanna, a former senior policy advisor at both the SEC and EPA, will talk disclosure, accountability and engagement on Agents of Impact Call No. 38, Tuesday, Feb. 22. RSVP today.
  • Keep reading, Progress on a dozen policies to mobilize private capital for public good,” by Fran Seegull on ImpactAlpha. Catch up on policy developments at ImpactAlpha’s Policy Corner.

Agents of Impact: Follow the Talent

Morgan Sheil, ex- of KKR, joins Energy Impact Partners as associate vice president of ESG and impact… Omidyar Network India’s Roopa Kudva joins the board of the Global Impact Investing Network… Raikes Foundation is recruiting a senior director for its conditions of racial equity initiative in Seattle… Aspen Network of Development Entrepreneurs is hiring a research manager and climate manager in Washington, D.C… ISF Advisors is looking for an associate director… Village Capital seeks a communications associate… New Markets Support Company is hiring managers and analysts to join its impact team… The Susan Thompson Buffett Foundation seeks a research and evaluation associate.

Thank you for your impact.

– Feb. 9, 2022