Friday
October 1
2010

Scott Anderson

The Public Sector View at ANDE: “Doing More with Less”

Considering I am new to NextBillion in general and to ANDE in particular, what’s news to me may not be news to our very sophisticated readership. So I turned to the experts. I asked the dozens of loan and equity fund executives, NGO managers, BoP thought leaders and others in attendance about just what struck them as new and exciting memes percolating at ANDE this year.

Nearly all of the responses I received were some version of, as one fund manager succinctly put it, “the U.S. government finally gets it.”

By “gets it,” he meant not only the recognition by public sector representatives that results-based business practices must be considered before, during and after providing loans or grants to entrepreneurs in the developing world; but also that public-private interaction is the key to unlocking innovations for both sides of the financial fence.

Indeed, the tone was set from the first day with the opening comments from USAID Administrator Rajiv Shah. (See Heather Esper’s post on Shah’s keynote.)

Necessity being the mother of all invention, including financial invention, many leaders from public-sector affiliated economic development organizations say they are doing more with less, while looking into new models and initiatives that pull the best from the private equity world to fund BoP businesses and connect investors with them.

The following is a wrap-up of some public sector highlights, updates and news from ANDE 2010:

Nancy Lee, Deputy Assistant Secretary of the U.S. Department of Treasury, provided an update on the G20 SME Finance Challenge, which aims identify new ways to make public programs more effective and efficient in harnessing private financing. Lee noted that the challenge has received 354 entries and plans call for selecting 10-15 winners from Africa, East Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, and South Asia.

“The criteria for winning the challenge are leverage, scalability and innovation,” Lee said.

The Challenge is illustrative of broader goals among the G20 members to bring forward diverse models for financing more diverse types of SMEs, Lee said.

Steven Koltai, Senior Advisor-Global Entrepreneurship Program at the U.S. Department of State, told ANDE members his organization is an advocate and branch office within the State Department. GES grew out of President Obama’s Summit on Entrepreneurship in April 2010, and is charged with developing specific programs within U.S. government agencies and by partnering with NGOs, corporations, foundations, and universities to provide training to entrepreneurs in emerging markets.

Pieces of the program are already available in an “ala cart” fashion, Kolati said. Two weeks ago with ImagiNation Networks, the GES launched E-Mentor Corp, which is a web-based, free platform to match mentors and mentees anywhere in the world. In Egypt and Indonesia, GES also is establishing an entrepreneur in residence program, which will include a staffed office of two to four people to coordinate activities.

GEP also is attempting is to port the concept of angel capital investing to emerging markets. GEP is working with the Angel Capital Association. The effort is focused on 15 countries, and will be launching pilot programs first in Egypt and Indonesia, followed by Turkey and Mexico.

“Ninety-three percent of US startups are funded by angel groups rather than venture capitalists, (at least) initially,” Kolati said. “So we’re trying to take that concept global.”

Elizabeth Littlefield, the newly sworn in President & CEO of the Overseas Private Investment Corp. (OPIC), explained that the organization’s mission is to mobilize investment in sustainable development abroad. Essentially a U.S. government finance institution, OPIC manages a variety of investment instruments – including direct loans, guarantees, insurance and support private equity funds. But it is without any direct equity authority.

“Pound per pound you get a lot out of OPIC,” Littlefield said, considering the organization’s small workforce of about 250 employees and about US$12 billion in exposure, but it’s relatively large economic impact.

Littlefield said her team is already well on its way toward moving in the direction of some of her long-term goals, including a heightened focus on renewable resources. That includes including not only renewable energy, but also water, food, agricultural and other natural resources.

Those goals will all be within a framework of impact investments, which she defines on the larger scale. “Language is important,” she said. “We want to ensure the way we define impact investing attracts Coca-Colas of the world.”

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