USAID and Acumen Partner to Spur Private Debt Capital for Social Enterprises in Developing Countries
Friday, September 28, 2012
New York – Today the U.S. Agency for International Development (USAID) and Acumen Fund, a nonprofit global venture fund addressing poverty across Africa and South Asia, announced a collaboration to facilitate the flow of up to $15 million in private debt capital to social enterprises working to provide critical goods and services to the underserved across these regions.
Under this agreement, USAID’s Development Credit Authority will partially guarantee loans made from banks or nontraditional capital providers to approved social enterprises within Acumen’s portfolio. Acumen will leverage its investment expertise and global networks to aid its investees in sourcing and securing loans that will qualify under the terms of this agreement.
“Our work has shown us that in order for these local enterprises to be transformational and sustainable, access to different types of capital is essential,” said Raj Kundra, Deputy Chief Investment Officer at Acumen Fund. “We are excited by this new way to support enterprise development and look forward to facilitating this additional access to financing alongside USAID.”
Motivated by both financial and social returns, social enterprises can fuel vital progress in the poorest countries in sectors ranging from health to education. However, due to both real and perceived risks in the markets in which they operate, these companies often struggle to attract growth capital needed to expand and reach scale. Furthermore, local financial markets are often under-developed, often resulting in a limited number of affordable financing options for social enterprises.
Source: Acumen Fund Blog (link opens in a new window)
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