The Brief | March 26, 2020

The Brief: Call No. 14: Recovery capital, resilience dividend, impact-linked debt forgiveness, local mobilization, GPIF’s new chief

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Greetings, Agents of Impacts!

Agents of Impact Call No. 14: Resolve and resilience capital for small and growing businesses. Innovative and intrepid entrepreneurs in emerging markets already were on the front lines of climate change, urbanization and access to basic services. Now, they’re on the front lines of COVID-19 recovery. Local capital providers are working to expand financing for small and growing businesses, or SGBs, in Africa, Asia and Latin America. Join ImpactAlpha, the Collaborative for Frontier Finance and local fund managers who are mobilizing an SGB stabilization and liquidity fund. RSVP for The CallThursday, April 2 at 9am PT / noon ET / 5pm London /  9:30pm Delhi.

Featured: ImpactAlpha Original

Investments in resilience pay dividends in combating the corona pandemic. Cities and countries have scrambled to contain the COVID-19 virus – with widely varied success. How have Singapore, Hong Kong and Seoul succeeded in tamping down the pandemic, while Italy and the U.S. have struggled? Chalk it up to the resilience dividend. “Cities that have taken a resilience approach are better prepared,” Global Resilient Cities Network’s Lauren Sorkin told ImpactAlpha. The network has been sharing best practices from cities for responding to COVID-19. The emerging playbook for effective COVID response includes tactical measures such as setting up systems to communicate information to citizens, and mapping and prioritizing resources to vulnerable communities. In Singapore, where Sorkin lives, kampong villages have given way to development, she says, but “social cohesion is very strong.”

Pandemics don’t require the same sort of physical rebuilding as a natural disaster does, but they do require the same resilience. “Resiliency and sustainability – meaning the economy, environment and equity – need to be part of a continuum of action,” says Los Angeles Cleantech Incubator’s Matt Petersen. In Washington, D.C., street vendors were given COVID-specific health training and paid to act as “health ambassadors” in their neighborhoods, distributing hand sanitizer and health information. In China, officials identified and mapped local businesses that could help with logistics and partner with city governments to deliver supplies. Says Sorkin, “This crisis is an enormous opportunity to look at our local economies and what we can strengthen.”

Keep reading, “Investments in resilience pay dividends in combating the corona pandemic,” by Amy Cortese in ImpactAlpha.

Dealflow: Follow the Money

Veritas Finance clinches $46 million to support India’s micro and small businesses. The Chennai-based financial services firm has supported nearly 50,000 informal and financially-underserved businesses from 200 branches across India. Its loan book has grown to 13 billion rupees ($172.5 million). The Series E equity round was backed by Kedaara Capital and existing investors Norwest Venture Partners, Lok Capital and an angel investor.

mPower Technology closes $4.4 million funding round for solar ‘scales.’ The Albuquerque, N.M.-based company is developing flexible and lightweight micro solar panels. It raised $2.5 million in October and has secured an additional $1.9 million for its Series A round.

Aktiia raises €5.6 million for wearable blood pressure monitor. High blood pressure is the “leading preventable cause of premature death worldwide,” with 65% of affected patients living in emerging markets. Switzerland-based Aktiia secured funding from Redalpine to get its wearable wrist monitor through the regulatory clearance process in Europe and the U.S.

Canadian ride-hailing company Facedrive acquires peer HiRide Share. Toronto-based Facedrive touts itself as an eco-friendly and socially responsible ride-sharing network that pays drivers better wages than larger competitors and reduces its carbon footprint through offsets and electric vehicles. It acquired HiRide, a peer platform that caters to long-distance commuters.

Signals: Revaluing Resilience

Pay back with your impact. A radical version of impact-linked loans can help enterprises that serve the poor bridge liquidity gaps and stay focused on customers and communities that need their solutions to cope with the coronavirus crisis. A pay-back-with-your-impact loan would provide “debt forgiveness as a reward for achievement of pre-defined impact performance,” says Roots of Impact’s Bjoern Struewer, who has pioneered Social Impact Incentives (see, Social impact incentives aim to tilt businesses toward the needs of the poor). Such a contract can be signed in a matter of days. Resilience and disruption.

Local resource mobilization. A grassroots response is moving quickly to bridge gaps even before the U.S. coronavirus relief bill reaches families and businesses (see, Strengthening collective bonds across the social distance). Cities, states and associations are distributing grants, loans and other relief. Living Cities is keeping a list of city-level commitments to small businesses, including efforts targeted for businesses owned by people of color or that predominantly employ people of color. National League of Cities and Bloomberg Philanthropies are collecting actions taken by local leaders in response to the COVID-19 pandemic.

Agents of Impact: Follow the Talent

Masataka Miyazono will head Japan’s $1.6 trillion Government Pension Investment Fund… Responsible investment proponent Eloy Lindeijer steps down as chief of investment management at PGGM… Power for All is hosting a webinar on the role of renewable energy minigrids in agricultural productivity and food security in Africa, Tuesday, March 31.

Thank you for reading.

–Mar. 26, 2020