The Brief: Organic finance, internet in Nepal, disaster resilience, graduate-level income sharing, true impact alpha



Greetings, Agents of Impact!

Agents of Impact Call No. 11: Faith and investing. Attorney Umar Moghul is helping financial institutions design Islamic-aligned products for financial inclusion in Muslim communities. Moghul and other faith-based Agents of Impact will share their experiences on Call No. 11, Thurs. Oct. 31 at 10:00am PT / 1pm ETRSVP today.

Dealflow: Follow the Money

Rabo AgriFinance will finance farmers to transition to organic. It takes farmers in the U.S. three years to transition from conventional practice and become certified as organic. That exacts a financial toll as yields often drop, at least initially, but farmers cannot yet command premium pricing. Rabo AgriFinance is rolling out a loan product to support farmers going through the organic transition. The U.S. division of the Dutch bank Rabobank found unmet and rising U.S. demand for organic crops. “Demand has grown faster than domestic production,” said Rabo AgriFinance’s Stephen Nicholson. Loan payments are deferred until farmers begin selling certified organic produce. Rabo AgriFinance is partnering with Pipeline Foods to provide advisory support to farmers and de-risk the loan. Dig in.

CDC Group invests $12 million in WorldLink’s internet service in Nepal. Nearly 80% of the 28 million people in Nepal have access to the internet. But internet penetration in rural areas remains low. The U.K. development finance institution invested in WorldLink, Nepal’s largest private internet service provider, to expand in remote parts of the country. CDC said its investment is meant to foster Nepal’s advancement on U.N. Sustainable Development Goal  No. 9 (inclusive and resilient infrastructure and industry). “We firmly believe in the power of connectivity to help bring communities out of poverty,” CDC’s Srini Nagarajan said in a statement. The commitment is CDC’s second in Nepal this year, following a $15 million loan to commercial bank NMB Bank. Check it out.

Stride Funding secures $2.2 million to enable graduate-level income share agreements. Slow Ventures, GSV Ventures, Strada Education and Sinai Ventures backed the company’s efforts to help students mitigate the risk of high-cost graduate programs. Stride’s loan payback is capped at 2.5x the borrowed amount, and students earning below $40,000 pay nothing. (For more on the rise of income share agreements and how they work, check out, “Income-share funds expand college finance options for low-income students.”)

BAG Innovation raises seed funding to ready Rwandan students for work. The Kigali-based edtech startup is trying to bridge Africa’s workforce readiness gap with “virtual internships” and soft skills submitted by BAG’s company partners. BAG raised a small $150,000 funding round to build out its platform and expand outside of Rwanda.

Log 9 raises $3.5 million for aluminum-based battery alternatives. Sequoia India’s Surge scale-up program and Exfinity Venture Partners invested in the Bangalore-based startup to help it develop a fully recyclable fuel cell for electric vehicles. Founder Akshay Singhal said Log 9’s mission is to accelerate the clean energy transition.

Impact Voices: Pass the Mic

Agents of Impact are spilling digital ink on topics ranging from investing in disaster resilience in the Caribbean to stakeholder capitalism. We rounded up the latest:

Investing in disaster resilience. Investing in “debt-for-resilience swaps,” in which countries exchange their debts for climate mitigation and adaptation funds, is one way impact investors can strengthen disaster preparedness in the Caribbean, write Crystal Romeo Upperman of the Global Commission On Adaptation, Gillian Marcelle of Resilience Capital Ventures and Carole Excell of Environmental Democracy Practice for the World Resources InstituteMore.

Real impact, not ESG performance, delivers true alpha. “Shared-value companies make a different set of choices than their competitors, building a distinctive social impact into their business models,” write Harvard Business School’s Michael Porter and George Serafeim, and FSG’s Mark Kramer in Institutional Investor. “As a result, they deliver different returns to their shareholders.” More.

Rules for stakeholder capitalism. Build the evidence. Value the impact. Measure to improve. In the Financial TimesMaryanne Hancock of Y Analytics, the impact measurement arm of TPG and the Rise Fund, offers advice for corporate chief executives seeking to implement the Business Roundtable’s pledge to respect multiple stakeholders. More.

Agents of Impact: Follow the Talent

Lauren Booker Allen of Jordan Park joins the board at ImpactAssets… LeapFrog Investments is looking for a head of brand and communications… Harvard Business School seeks a research associate on its “impact weighted accounts” project (see, “Weighting accounts for impact”)… Capria has $15 million to invest in its next cohort of three to five emerging-market fund managers. Applications are open.

Thank you for reading. 

– Oct. 28, 2019

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