Greetings, Agents of Impact!
Featured: ImpactAlpha Original
Native-led financial institutions tackle challenges of lending to businesses in Indian Country. Native business owners operating on tribal lands are among the most financially underserved groups in the U.S. Only one out of every six Native communities has access to a financial institution. Bureaucratic, administrative and transactional hurdles deter even mission-driven lenders and impact investors – but not Akiptan. Akiptan, in Eagle Butte, S.D., is Indian Country’s first Native-run, agriculture-focused community development financial institution, or CDFI. In two years, the nonprofit Akiptan has originated nearly $3.5 million in loans to 57 agribusinesses across more than a dozen tribal nations. “We got tired of seeing Native farmers get rejected for financing from the U.S. Department of Agriculture, or getting predatory financing that just wasn’t setting farmers up for success,” says Skya Duchenaux, who grew up on a ranch on the Cheyenne River Sioux Tribe Reservation and helped launch Akiptan in 2018. “We’re going to put our money where our mouth is and fill the gap ourselves.”
Akiptan’s borrowers are small-scale ranchers, sustainable farmers and Native-led food companies like Sakari Farms in Oregon, and Morning Light Kombucha in Kansas. The need for small business support has been amplified by the COVID-19 pandemic, which has hit Indian Country especially hard. In Anchorage, Alaska, the Cook Inlet Lending Center had just launched its small business loan program when businesses shut down. The lender quickly received 700 applications for business relief grants. It’s now designing flexible, low-cost loan products to help businesses recover. “It’s not a model that’s ever been tested for these small businesses,” says Cook Inlet’s Jeff Tickle. Akiptan’s seven-year loans include five years of interest-only payments to enable agricultural businesses to establish revenue flows. “If traditional financing was working, we wouldn’t need CDFIs,” Duchenaux says. “In the world we’re in right now, we’re starting to see all of the weak links in our broken systems. Those can only be fixed with patient, sustainable and innovative financing.”
Keep reading, “Native-led financial institutions tackle challenges of lending to businesses in Indian Country,” by Jessica Pothering and Roodgally Senatus in ImpactAlpha.
Dealflow: Follow the Money
Secha Capital invests in a pair of green businesses in South Africa. The Johannesburg-based impact investor backed green energy startup iG3N and Cultura Fresh, a hydroponic farm. iG3N makes battery storage systems for residential up to grid-scale renewable energy projects in South and Southern Africa. Cultura Fresh’s farms recycle water to produce iceberg lettuce year-round.
- Operator-investors. Secha operates as a holding company that takes equity stakes and active operating roles in its portfolio companies. The deals were led by Secha’s Yusuf Shaikh, Seema Lalloo and Khule Mnisi (see, “Agents’ of Impact: Wukina’s Maureen Sibanda and Secha Capital’s Kuhle Mnisi”).
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Rise of the Rest backs Black-led startups. Three Black-led, U.S.-based companies landed a combined $2 million in investment capital and other commitments through Revolution’s Rise of the Rest pitch competition for Black founders last week. The competition was part of its Rise of the Rest Seed Fund, a vehicle that invests startups outside of California, New York and Massachusetts. Revolution is raising its fourth fund.
- The winners. Chicago’s Rheaply helps organizations recycle unused items. Dallas-based Zirtue’s digital lending platform simplifies lending between friends and family. Also in Dallas, software-as-a-service platform Kanarys helps companies advance diversity, equity and inclusion in the workplace.
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United Healthcare backs Maycomb Capital’s pay-for-success fund. The world’s largest healthcare company by revenue made a multi-million-dollar investment in Maycomb Capital’s Community Outcomes Fund to finance pre-K education in Memphis and surrounding Shelby County, Tenn. Under the pay-for-success arrangement, Memphis and Shelby County will repay investors if milestones are met for attendance, pre-literacy skills and kindergarten readiness. The fund, in its second year, is financing 1,000 seats of high-quality preschool in the region, where only a third of four-year-olds are enrolled in pre-K.
- The backstory. Prudential Financial and former Microsoft CEO Steve Ballmer and his wife Connie, committed $30 million to Maycomb’s fund in 2018. “Pay-for-success financing enables government to target resources to programs that work,” Ballmer said at the time. Kresge Foundation provided $10 million in credit protection (see, “Prudential, Kresge and Steve Ballmer back Maycomb Capital’s pay-for-success fund”).
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City of Hampton issues environmental impact bond. Environmental impact bonds reward investors for backing green infrastructure projects that achieve positive environmental outcomes (see, “Atlanta raises $14 million environmental impact bond from public”). The City of Hampton, in Virginia, is funding $12 million in nature-based solutions to minimize flooding and polluted stormwater runoff in the nearby Newmarket Creek watershed. The deal is Virginia’s first environmental impact bond.
- Stormwater. The bond will finance more than 8.6 million gallons of storage capacity for stormwater runoff. The Chesapeake Bay Foundation and Quantified Ventures helped develop the project.
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Duke Energy to spur electric vehicle adoption in North Carolina. The $25 million pilot program from the Charlotte-based utility will add 280 electric-vehicle charging stations in the state. The plan approved by the state’s utilities commission is smaller than Duke’s original plan. The program also includes switching 30 diesel-powered school buses to zero-emission models.
Agents of Impact: Follow the Talent
i(x) investments’ Trevor Neilson is moving from CEO to chairman of the board. Steve Oyer takes over as interim CEO… Mark Malloch-Brown, a former top U.N. official, takes over from Patrick Gaspard as head of Open Society Foundations… Confluence Philanthropy is looking for a senior program manager of its climate solutions collaborative and development and communications director/staff writer in New York, New Jersey, or Connecticut… Reinvestment Fund is hiring a senior director in Philadelphia, Baltimore or Atlanta.
Emerson Collective is looking for an education portfolio director in Palo Alto, Calif.… Align Capital is recruiting a catalytic capital analyst in Santa Monica, Calif… Donors of Color seeks a communications manager… Village Capital is seeking applications for Finance Forward Southeast Asia (with MetLife Foundation and PayPal) and Future of Work Africa 2021 (with the International Finance Corp.)… Impact Management Project’s Olivia Prentice, B Lab’s Dan Osusky, World Benchmarking Alliance’s Pauliina Murphy and 60 Decibels’ Tom Adams present “Getting better through benchmarks,” Wednesday, Dec. 9.
Thank you for reading.
– Dec. 7, 2020
