Press Release: Acumen Launches Expansion to Tackle Poverty in Latin America
Wednesday, May 6, 2015
Acumen announced today its expansion to support social entrepreneurship in Latin America. The pioneer in impact investing will be headquartered in Bogotá and will invest in innovative entrepreneurs and enterprises in Colombia and Peru to drive faster, sustainable solutions to poverty and create new paths forward to tackle economic inequality. While extreme poverty in Latin America has declined by half, more than 80 million people still live on $4 a day and more than 200 million are at risk of being pulled back into poverty by economic instability and climate change.
Founded in 2001 by Jacqueline Novogratz, Acumen takes a venture capital-like approach to investing in social enterprises serving low-income customers. “Our work in Latin America will build on nearly 15 years of using market-based approaches to tackle poverty. We can apply what we’ve learned through our work across more than 80 companies in Africa and South Asia in sectors ranging from energy and affordable housing to agriculture and healthcare,” said Acumen CEO Jacqueline Novogratz.
According to Acumen’s Latin America Director, Virgilio Barco, the organization’s initial investments will concentrate on rural areas where there are greater concentrations of poverty. “Acumen’s focus in Latin America will be on long-term solutions, rather than short-term interventions, that have the capability to generate predictable, sustainable incomes for households,” he said. “While short-term interventions are also needed, we are focused on creating opportunities that alleviate potential poverty for generations to come.”
The rapid growth of Colombia’s economy over the past decade has masked growing inequality between the country’s urban and rural areas with rural areas stagnating while urban areas have prospered. Raising rural incomes is one of the country’s most pressing problems. “We see a strong pipeline of investment opportunities, particularly in the agriculture sector,” Barco said. “Acumen’s investments will target two categories of opportunities: those that fundamentally address the income challenges of smallholder farmers and those that address critical issues of rural service provision, such as water and sanitation, energy and health.”
Acumen’s first investment in the region, Siembra Viva, connects Colombian smallholder farmers selling organic produce to customers in cities through a logistics, technical assistance and e-commerce platform.
About a quarter of the country’s population lives in rural areas where conflict and violence have long played a significant role in hindering progress. Whether they are small-scale farmers or involved in other agribusiness activities, these individuals and families are held back by limited access to productive assets, ranging from land and irrigation to financial services and technical assistance. A lack of infrastructure prevents them from engaging in competitive markets, further exacerbating the barriers to progress.
“By turning charitable donations into financial capital rather than rely on markets or aid alone, Acumen can enable Latin American businesses to grow and ultimately bring large-scale, sustainable solutions poverty,” said Novogratz.