Renew Capital joined USAID’s Women Economic Empowerment Fund and members of the 2X Collaborative to develop and launch the SG2X Playbook: a gender-smart investment toolkit for fund managers and SMEs operating in Africa.

<h1 style="text-align:center;">What is the SG2X Playbook?</h1><a href="https://sg2x.squarespace.com/entrepreneurs" target="_blank" rel="noopener noreferrer">Download the SG2X Playbook Now!</a>Small- and medium-sized enterprises (SMEs) are the largest segment of the African economy and yet &nbsp;African SMEs as a business and investment class are under-performing and are rarely gender smart. They do not currently perform well enough to justify the associated transaction and portfolio management costs that would be incurred by investors, and they do not have the resources or capacity to fully support women’s economic empowerment. So, what are SME investors to do? To address the need for improved portfolio and impact results, USAID, RENEW, and a consortium of leading gender lens investing (GLI) initiatives, including members of the 2X Challenge, set out to support the creation of GLI success stories in Africa.The underlying assumptions for the 18-month project supported by the USAID Gender Equality and Women’s Economic Empowerment Hub were threefold: 1) Gender-balanced executive teams deliver superior performance than single-gender dominated teams; 2) fund managers need quick and simple tools to share with SME managers to help them run successful companies; and 3) these tools can be gender sensitized to drive gender equality and SME performance.<figure class="image"><img src="/uploads/image_1_e9531f7199.png"></figure>Keeping these assumptions in mind, the project team created the SME Gender Growth Acceleration (SG2X) Playbook, a gender-smart investment toolkit for fund managers and SMEs operating in Africa, designed to help them build gender-smart SMEs with gender-balanced executive teams that deliver attractive financial and impact results.Now, we understand and fully recognize that there is a lot of great activity already occurring within the GLI space. The internet is full of amazing reports, case studies, and tools for GLI investing, some even targeted specifically for SMEs.Unfortunately, most SME fund managers do not have a lot of time or resources to search, read, extract, and use these tools, which can be hundreds of pages in length and difficult to parse out. SME fund managers and the managers in their portfolio companies need quick, easy to access tools designed to achieve dual objectives: financial and impact results.So, how is the SG2X Playbook different from other GLI resources? The SG2X Playbook builds on these existing resources (i.e., we don’t want to reinvent the wheel, but rather strengthen it) and provides a systematic, replicable, and tested approach in the form of a “Playbook” designed to help grow SMEs into gender-smart success stories that deliver competitive financial and impact results and demand attention from larger private sector investors. In short, the SG2X Playbook outlines a fund manager’s investment game plan, including gender-smart policies, tools, trainings, and best practices to maximize portfolio results. The SG2X Playbook is comprised of the following components:Policies: The Playbook includes a comprehensive Employee Handbook that presents SME entrepreneurs, executives, and managers with standardized, gender-smart policy templates and language they can tailor to the needs and reality of their business.Materials &amp; Standard Operating Procedures: The Playbook includes a module-based narrative outlining the key subject areas of the Playbook, providing best practices for execution and overall instruction on how to use the Playbook through Standard Operating Procedures (SOPs).Gender-Smart Exec’s Training Program: The Playbook includes a curriculum, instructional videos, and presentation materials of the Gender-Smart Exec’s Program — a module-based executive capacity building training program that helps SME executives broaden their skill sets across nine critical topics. This program serves as the main training for Playbook implementation within SMEs.Tools, Resources, Templates, etc.: The Playbook includes a suite of more than 45 practical tools that will aid in the execution of the Gender-Smart Exec’s Program and implementation of the Playbook’s guidance. These resources include, but are not limited to, HR tools (e.g., interview templates, performance review templates, etc.), financial tools (e.g., budget templates, cash flow management templates, accounting and finance manuals, etc.), and management planning tools (e.g. annual management plan; mission, vision, and long-term statements, impact thesis).&nbsp;&nbsp;&nbsp;<a href="https://sg2x.squarespace.com/entrepreneurs" target="_blank" rel="noopener noreferrer">Get your free copy of the Playbook now.</a>

RENEW breaks down the various components of the SG2X Playbook and explains how it is unique from other Gender Lens Investing resources.


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What is the SG2X Playbook?

<h1 style="text-align:center;">Creating a Gender-Smart Workspace&nbsp;</h1>An Interview with Yemsrach Chanyalew, Deliver Addis’s HR and Admin Manager&nbsp; In celebration of International Women’s Day and RENEW’s commitment to gender equality in our organization and throughout the work we do, we recently spent time with Yemsrach Chanyalew, who works for Deliver Addis, one of our portfolio companies. Yemsrach is the company’s HR and administration manager, and she spoke to us about her journey to become an executive and the gender biases she’s encountered along the way.<figure class="image image_resized image-style-align-center" style="width:624px;"><img src="https://lh4.googleusercontent.com/gJgERPhWYPY6dAJX0XKAFN2W9AvnRIyxVqrCH4kvZMZHGfGddXT2HHblejfT0iGOjBuQvZDlQ_ap22vQaRKuFPaLqxAg9vYcqEKazC6yFIAT0c_qfOVP8wcgWyMPnaqcdbyEpET3"></figure>This is what Yemsrach shared about her journey.&nbsp;“I graduated with a degree in theatrical art from Addis Ababa University, and though I had an interest in theatrical art, I did not pursue it professionally. To survive, I pledged to myself I would enroll in different sectors to survive and get a job that pays well. I was a full-time sales representative for 11 months at a trade and advertisement company. As time passed I wasn’t able to continue due to health issues. In that role, I spent the day outside in the sun and I found the tasks to be difficult as a female. After that, I joined other companies and worked as a secretary and office manager and then as an office coordinator and HR coordinator at a restaurant.&nbsp;I then decided to become self-employed and to start my own business. I opened a mini-market. I took a risk starting a business when neither I nor my family had any background in the business world. I invested my all. I didn't have a plan B and in the end, I was left empty-handed two years later. But I didn't give up. After closing my business, I joined a new company as an HR assistant and administrator and worked there for almost a year. This was around the time when the pandemic hit. While I was doing market research I landed at Deliver Addis.”Moving deeper in the interview Yemsrach shared what she enjoys the most in her work and her inspirations to work harder. She also shared her future plans and visions for the ecosystem. “I enjoy tasks that are challenging. I love how challenging my work is at Deliver Addis. I'm strict by nature and in a way that makes me enjoy what I do, and I know I can execute it well. I always had an interest in art when I was younger but as I grew throughout my journey in many different work environments I grew more interested in HR. It matched really well with my personality, and it inspired me to pursue it more at greater heights. I'm now doing my second degree in business management and I will graduate this year and then I plan to do my MBA in HR. I have a big vision to open my own training center, where people can practically learn and practice the skills that can help them become professionals in a gender-smart ecosystem.”<figure class="image"><img src="/uploads/097_A2791_970ace6fc4.jpg"></figure>She shared her perspective on why gender equality issues are often overlooked in the workspace.&nbsp;“I think we don’t openly discuss gender equality and its underlying issues openly as a community, and I believe the reason is often culture. The way we were raised or the culture we were raised in has a major contribution to how gender biases are handled in the community. We need to have open and honest discussions on the issues. It would be great if there were associations or specific departments in companies or organizations that mainly focus on issues surrounding gender biases in the workspace.”Stay tuned in the next few months to learn more about resources RENEW has been developing to help companies like Deliver Addis on the journey to becoming gender-smart. Photo by Imran Mazar | <a href="https://www.pexels.com/@timmossholder?utm_content=attributionCopyText&amp;utm_medium=referral&amp;utm_source=pexels">Tim Mossholder</a> from <a href="https://www.pexels.com/photo/male-and-female-signage-on-wall-1722196/?utm_content=attributionCopyText&amp;utm_medium=referral&amp;utm_source=pexels">Pexels</a>

An Interview with Yemsrach Chanyalew, Deliver Addis’ HR and Admin Manager.

Gender Equality

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Creating a Gender-Smart Workspace 

<h1 style="text-align:center;">Lets #BreakTheBias for International Women’s Day</h1><a href="https://www.internationalwomensday.com/theme">International Women’s Day</a> (IWD) is fast approaching on March 8, 2022, and this year's theme is “Break the Bias” (#breakthebias). The goal for this year’s campaign aims to turn a spotlight on the gender biases people carry around with them, and to actively move forward to collectively create a world free of bias, stereotypes and discrimination.&nbsp;At RENEW, we aim to encourage ourselves and those around us to examine and change our biases. Below is a video we’ve been sharing during <a href="https://www.renewcapital.com/what-we-do/market-building">The Exec’s Program</a> to help highlight the biases many tend to have. Watch the video, answer the riddle and consider sharing it in your community.&nbsp;<div class="raw-html-embed"><iframe src="https://www.facebook.com/plugins/video.php?height=314&amp;href=https%3A%2F%2Fwww.facebook.com%2Fmindspace.me%2Fvideos%2F550888202442564%2F&amp;show_text=false&amp;width=560&amp;t=0" width="1000" height="562" style="border:none;overflow:hidden" scrolling="no" frameborder="0" allowfullscreen="true" allow="autoplay; clipboard-write; encrypted-media; picture-in-picture; web-share"></iframe></div>&nbsp;

International Women’s Day (IWD) is fast approaching on March 8, 2022, and this year's theme is “Break the Bias” (#breakthebias)

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Lets #BreakTheBias for International Women’s Day

<h1 style="text-align:center;">ANDE Helps RENEW-Backed Company Become Gender-Smart</h1>&nbsp;On December 15, 2021, ANDE announced the winners of the Gender-Smart Investing Capacity Building Facility funds, an activity under the ANDE Gender Equality Initiative (AGEI). RENEW, along with four other organizations, were picked to advance their gender lens investing strategies. The funds, provided by the United States Agency for International Development (USAID), targets investors who are committed to advancing gender equality through investments into SGBs. Each of the five organizations are slated to receive up to $30,000 and support SGBs operating in India, Brazil or the East and Southeast Asia, Andean or Eastern African regions.&nbsp;Learn more about this announcement in ANDE’s recent press release: <a href="https://www.aspeninstitute.org/news/press-release/ande-gender-smart-investing/">ANDE Announces Winners of the Gender-Smart Investing Capacity Building Facility</a>.<figure class="image image_resized" style="width:100%;"><img src="/uploads/desta_713214ebe3.jpeg"></figure>

On December 15, 2021, ANDE announced the winners of the Gender-Smart Investing Capacity Building Facility

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ANDE Helps RENEW-Backed Company Become Gender-Smart

<h1 style="text-align:center;">A Blended Finance Project in Ethiopia, Start to Finish: What Did We Learn?</h1>We recently published a <a href="https://drive.google.com/file/d/1h3dztXbnlp1dIQRDVsC3reLXBN3fXVUr/view?usp=sharing">program summary</a> for the Global Affairs Canada Accelerating Business Growth (ABG) project, which ran in Ethiopia from May 30, 2016 to May 31, 2021. The summary provides a high-level overview of the program’s objectives, results, case studies, and more.&nbsp;&nbsp;<figure class="image image_resized" style="width:59.73%;"><a href="https://drive.google.com/file/d/1h3dztXbnlp1dIQRDVsC3reLXBN3fXVUr/view?usp=sharing"><img src="https://lh3.googleusercontent.com/k3xVoFDyjTbOc-7jFpZP-8v0bs8LinAK7w-jrCdzMMoBaaVE9nvN6q5VPUKXE8He7sltAn27Uz0wrsiQqSPWeTr13BlAanRCA7dHzNtQkQIyzAu16R6_B8Xedh8LIXeUvoBg3fog=s1600"></a></figure> In partnership with Global Affairs Canada, the ABG program helped mobilize $79.6M CAD of capital for and supported 6,744 jobs in SMEs that were a part of the program. Of the 6,744 jobs supported (60% of which were for women), 2,632 jobs were created over the life of the program.Five years of implementation of ABG in Ethiopia was a meaningful journey and a significant learning experience. What is clearer now more than ever is the importance of the private sector and development sector working together to implement blended finance solutions such as ABG that address the constraint of SMEs, and of persisting through challenges, no matter the scale.We invite you to <a href="https://teams.microsoft.com/registration/22T3OmbKiEGoDHvv7nBQpg,WaMFc_bLZ0-fk4_df0G0Mg,IybsuXl5mEWes-lNfFW3lQ,xwQfs94gCE-9BGlHA8zMnQ,iEXNRl_Sv0iyyGUSNJsmfA,PAUQ1sVH3U-2xzl31lFCzA?mode=read&amp;tenantId=3af764db-ca66-4188-a80c-7befee7050a6&amp;skipauthstrap=1">join us virtually</a> on Tuesday, October 26 from 9 to 10:30 AM EST (4 to 5:30 PM EAT) for a learning session hosted by GAC and RENEW to:<ul><li>Recognize the role that GAC played in shaping Ethiopia’s investment landscape and SME ecosystem;</li><li>Hear from ABG project beneficiaries and stakeholders about their experience and gain further lessons learned and ideas for future blended finance projects; and</li><li>Share lessons learned and discuss best practices to advance blended finance models to develop SME ecosystems in SSA.&nbsp;</li></ul>Be sure to <a href="https://teams.microsoft.com/registration/22T3OmbKiEGoDHvv7nBQpg,WaMFc_bLZ0-fk4_df0G0Mg,IybsuXl5mEWes-lNfFW3lQ,xwQfs94gCE-9BGlHA8zMnQ,iEXNRl_Sv0iyyGUSNJsmfA,PAUQ1sVH3U-2xzl31lFCzA?mode=read&amp;tenantId=3af764db-ca66-4188-a80c-7befee7050a6&amp;skipauthstrap=1">register today</a> to secure your spot for next week’s learning event.&nbsp; &nbsp;

Download a project summary and join us Oct. 26 to learn more

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A Blended Finance Project in Ethiopia, Start to Finish: What Did We Learn?

<h1 style="text-align:center;">Results from a 5-year, innovative finance project in Ethiopia</h1>In 2016, Global Affairs Canada’s (GAC’s) Accelerating Business Growth (ABG) program set out to do something innovative and challenging: Develop Ethiopia’s capital markets and accelerate the formation of its private sector by supporting investments and the growth of small and medium enterprises (SMEs). A number of private sector projects were already focusing on building the “demand-side” through startup incubators, accelerators and technical assistance. But ABG focused on building the “supply-side” by organizing, mobilizing and managing innovative pools of finance for SMEs. Using blended finance, ABG lowered the risks for investors and mobilized new sources of capital for SMEs.&nbsp;The ultimate outcome of the ABG program was “stronger and more sustainable job creation, including those for low-skilled workers, men, women and young adults, through a dynamic and growing small and medium business sector in Ethiopia” with the target of supporting Ethiopian women- and men-owned SMEs in attracting more than $52M CAD of capital to scale their businesses and supporting 5,000 jobs for low-skilled workers, including men, women and young adults.Interested in learning more? Join us on Tuesday, October 26, 2021 at 9AM Eastern (4PM East Africa) to unpack lessons learned from this blended finance project. <a href="https://teams.microsoft.com/registration/22T3OmbKiEGoDHvv7nBQpg,WaMFc_bLZ0-fk4_df0G0Mg,IybsuXl5mEWes-lNfFW3lQ,xwQfs94gCE-9BGlHA8zMnQ,iEXNRl_Sv0iyyGUSNJsmfA,PAUQ1sVH3U-2xzl31lFCzA?mode=read&amp;tenantId=3af764db-ca66-4188-a80c-7befee7050a6&amp;skipauthstrap=1">REGISTER HERE</a>.<figure class="image"><img src="/uploads/097_A2825_0131b43ee9_67f1305f8d.jpg"></figure>Where most private sector interventions focus on the “demand-side” of the private sector through initiatives that support microenterprises, incubators and accelerators, ABG focused on developing the “supply-side” or capital formation side of the private sector. Where most interventions have struggled to organize and mobilize additional sources of capital for creating impact, ABG built and expanded new sources of capital for SMEs, including global and local angel networks and the formation of new blended finance vehicles. ABG also focused on SMEs because SMEs are the greatest contributor of new job growth in frontier markets like Ethiopia.&nbsp;By focusing on capital formation and mobilization for SMEs, the project addressed a systemic issue in Africa known as the “missing middle” - a gap in the capital markets between microfinance and formal investment funds and banks where few sources of capital exist. The ABG project built a stronger supply-side of capital for Ethiopian SMEs, or “rungs” in the capital market to fill the missing middle. ABG then trained SME owners and executives on business skills to attract and improve performance once they received capital.&nbsp;After five years of implementing the project, ABG helped mobilize $79.6M CAD of capital for SMEs, supported 6,744 jobs, including 2,632 created jobs, of which 60% or 4,069 were for women.&nbsp;<figure class="image"><img src="/uploads/abg1_256718a170.png"></figure><figure class="image"><img src="/uploads/abg2_7faea8945d.png"></figure>The ABG team is proud to have impacted Ethiopia’s private sector and achieved numerous stated project targets and complementary indirect outcomes. The project also helped influence policies, trained over a thousand companies, created a local angel network, and launched awareness programs that we believe will generate impact for years to come. A detailed summary of these ABG project results is provided below.&nbsp;<hr>SUMMARY OF RESULTS ACHIEVED BY THE PROJECT:<ul><li style="text-align:justify;">Reached and surpassed the project’s ultimate outcome indicator by supporting 6,744 jobs over the course of the project, on the target of 5,000, of which 4,070 or 60% are held by women.</li><li style="text-align:justify;">Realized a financing leverage ratio of 9.7x by supporting Ethiopian SMEs in attracting $79.6M CAD of financing, exceeding the project target of $52.5M. Of this, $19.1M or 24% was attracted by women-led businesses.</li><li style="text-align:justify;">Designed and developed the Women-Owned Business Investment Fund (Women’s Fund) specifically for investing in women-owned SMEs, trapped in Ethiopia’s financing missing middle. The fund invested in Queen of Sheba, a partner of Travel Ethiopia; an eco-minded tour and safari operator that has a deep commitment to Ethiopia’s environment, wildlife and community development.</li><li style="text-align:justify;">Successfully trained and graduated:<ul><li style="text-align:justify;">Five cohorts of The Exec’s Program, graduating 93 executives, of which 44 (47%) are women. 93 exceeds the project target of 75.</li><li style="text-align:justify;">Five cohorts of The CFO100 Program, graduating 130 finance professionals, of which 50 (39%) are women, exceeding the project target of 100.</li><li style="text-align:justify;">Facilitated in-person and online private equity investment seminar incubator training sessions, attended by 1,238 SME business owners and representatives, of which 433, or 35% are women. This result exceeds the project target of 650 by nearly double.</li></ul></li><li style="text-align:justify;">Expanded the Impact Angel Network (IAN) into Canada by training potential investors on the opportunities of investing in Ethiopian SMEs, engaging with local angel groups and ultimately registering an additional 93 members over the course of the project, of which 19 are Canadian (20%).</li><li style="text-align:justify;">Due to an increased focus on gender equality, the team developed the Women in Finance (WIF) peer to peer support series during the second year of the project, aimed at energizing and empowering women finance professionals and executives in Ethiopia who face cultural and professional barriers. 10 total events were facilitated, in various formats and settings, and were attended by 328 women.</li><li style="text-align:justify;">Launched an edutainment platform known as Chigign, aimed at raising awareness of and building interest in entrepreneurship and angel investing in Ethiopia. The TV series was broadcast on national television (FANA TV), and involves entrepreneurs looking to raise seed capital pitching their ideas to a panel that includes RENEW’s Laura Davis and other local angel investors. This program, which started as a concept under ABG, has reportedly been viewed by 40 million watchers. RENEW recently partnered with the World Bank’s Gender Innovation Lab to design a research program to measure Chigign’s content to optimize it and increase female participation in the entrepreneurial ecosystem.</li></ul>

Outcomes from our project with Global Affairs Canada (GAC)

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Results from a 5-year, innovative finance project in Ethiopia

<figure class="image image-style-align-center"><img src="/uploads/mftc_logo_tm_1_0104e07f41.png"></figure><h1 style="text-align:center;">Mama Fresh: Baking Injera and Creating Impact in Ethiopia</h1>It was a cool and dewy morning in August when I made my way over to <a href="http://www.mama-fresh.com/">Mama Fresh Injera PLC’s</a> new manufacturing and export facility to speak with members of the baking team. Clouds were off in the distance, threatening the rain that comes so often to Ethiopia during the summer months, but neither the early hour nor threatening weather dampened my spirits - I was getting an in-depth look at how Mama Fresh not only makes injera, but positive impact as well.Mama Fresh is Ethiopia’s largest commercial manufacturer and exporter of fresh-baked injera. The Impact Angel Network’s investment in Mama Fresh in January 2014 helped finance the modern facility that I visited on this particular morning. The investment is also expected to enable Mama Fresh to increase its production capacity, create jobs in the local economy and explore new market opportunities for injera, including the growing gluten-free markets in the U.S. and Europe. While this investment’s expected social impact for the local community and greater Ethiopian economy is significant and important in this company’s story, my interest that day was actually on a smaller scale. I wanted to find out how Mama Fresh, through this investment, was achieving impact at the individual level, specifically for underprivileged women. Injera baking is considered “women’s work” in Ethiopia because most household baking is done by female family members or female hired help, so Mama Fresh has had the opportunity to provide work as injera bakers for many women in Addis Ababa.Mama Fresh gave me the wonderful opportunity to speak with several of its diligent and hard-working injera bakers. When I arrived at Mama Fresh to meet with these bakers, the facility was buzzing with activity – the morning shift employees were completing preparations to start the injera baking for the day. Out of the many bakers that I was introduced to, one baker stood out amongst the rest for her reputation of being one of the most diligent and hard-working employees in the company - Belaynesh Millkiyas. Belaynesh kindly shared her personal story with me, which I believe shows how Mama Fresh is creating impact across the spectrum, from the country level all the way down to the individual.Belaynesh was born in Hossana and moved to Addis Ababa in 2004. Like many people, she came to the capital looking for work, and after a series of events, found her way working for Mama Fresh.<figure class="image"><img src="/uploads/belaynesh_collage_2_98dcbc0ae8.jpg"></figure>When did you start working with Mama Fresh, and how did you hear about the company? I started working at Mama Fresh in November 2010; it has been five year since I started working here. I have a relative who used to work at Mama Fresh as a supervisor in the dough room, and she recommended me to MF management. But she [has since] left MF and is currently working at another company.How did you become an injera baker? I have been baking injera since I was a little girl. We had a family business [local café] at Hossana, and I used to bake injera there. I wanted to go and work in the Middle East, and that is why I [initially] came to the city [Addis Ababa], but after realizing this is not a good choice for me, I stopped and began searching for work here. After changing several jobs I started working at Mama Fresh as injera baker.How does Mama Fresh injera compare to the injera you make at home, or you grew up eating? Mama Fresh injera compared to the injera I make at home is much healthier because it is made from pure teff. I usually mix other grains with teff to make injera at home and so do other households. The process here is also much cleaner because we are using clean utensils; the workers are very efficient and the process is much more modernized than baking injera at home. Overall, the production process is safe, clean and dough processing is different from what I do at home. Besides, the teff we use is quality teff and not mixed with other grains - I know because the teff is ground here at the facility - I prefer eating Mama Fresh injera than any other injera, even from what I make at home.How has working for Mama Fresh changed your life? Before joining Mama Fresh I used to work at a carpet-manufacturing factory as an operator. While I was working there, I had my first child and took a maternity leave, but this didn’t make my bosses happy so they had to let me go! I started looking for other job, but I was required to work on night shifts, which was impossible for me because I had to take care of my baby. That is when I heard about Mama Fresh from one of my relatives who was working here. Although I haven’t seen that much growth in my salary, working at Mama Fresh has made my life stable, so I can raise my kid. He is now seven years old and is in first grade. The management team is very understanding about my problem[s], they are good people, and I feel like they are my family. They help me out when I have money problems by lending me money to pay for my kid’s school.What is your favorite part about working for Mama Fresh as an injera baker? I like baking injera because it a quiet job, and I can focus on baking for a long time.Your reputation at Mama Fresh is that you are one of the most productive / quickest injera bakers in the company – how did you come to be so skilled? I have been baking injera since I was a child, so it came from experience. And the incentive given to us if we bake more injera we will [then] get paid more money. Currently the quota is to bake 350 injera per shift, but on a good day I usually bake from 450 to 600 injera per day, using four to five metads [ovens]. But it all depends on the power available and time I have. Once I get in the facility I am very focused, I just want to bake injera.Has your job at Mama Fresh made you feel empowered as a woman? Yes, I earn my own money and raise my child so it has made me feel empowered as a woman. Since I am a single mom, I am required to support my child and his needs. It has inspired me to be an entrepreneur – I want to start my own business.

RENEW has a Q&A session with a Mama Fresh baker to talk about injera and impact.

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Mama Fresh: Baking Injera and Creating Impact in Ethiopia

<h1 style="text-align:center;">RENEW at Women in Agribusiness Conference</h1>RENEW’s Laura Davis recently attended and spoke at a conference in Ethiopia, hosted by The Women in Agribusiness Leadership Network (WALN) in conjunction with the U.S. Agency for International Development (USAID). &nbsp;<figure class="image image-style-align-right image_resized" style="width:24.52%;"><img src="/uploads/dsc00069_fb97ed64bd.jpg"></figure>U.S. Ambassador to Ethiopia, Patricia Haslach and Ethiopia’s First Lady Roman Tesfaye opened the event, which focused on celebrating more than 100 women entrepreneurs and leaders from across Ethiopia who had a positive impact in the field of agribusiness. The women attendees were able to share experiences, best practices, and many other things related to owning and operating agricultural businesses.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During this event, Laura sat on a panel that discussed private equity and the field of agribusiness. She was able to share some of RENEW’s hard earned insights on the relationship between small-medium enterprises (SMEs), access to capital and angel investing. &nbsp;<figure class="image image-style-align-left image_resized" style="width:21.34%;"><img src="/uploads/dsc_0630_6ee7fbe2c6.jpg"></figure>In the words of Ambassador Haslach, “women make up nearly half of the agriculture workforce in Ethiopia, but unfortunately face a number of disadvantages, including limited access to training, market information, and other resources, and problems in accessing markets and credit.”**Unfortunately, many entrepreneurs in Ethiopia fall into the category of the “missing middle”, enterprises that are considered to be too large or established for micro-institutional investors, and too small and risky for traditional financing. But, this is where impact investment firms like RENEW come in to play – by providing SMEs access to the “missing” capital they need in order to scale and become attractive to larger private equity and institutional investors. This is all accomplished through RENEW’s wonderful Impact Angel Network, one of the largest U.S. based angel networks for Africa.&nbsp;All in all, it was an enlightening and inspiring conference that RENEW was happy to be a part of.

RENEW's Laura Davis attends and speaks at conference hosted by WALN and USAID

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RENEW at Women in Agribusiness Conference

<h1 style="text-align:center;">Blended Finance 101</h1>MINDING THE GAP:In 2015, the United Nations released a multi-faceted plan of action for the world to meet 17 Sustainable Development Goals (SDG) and 169 targets by the year 2030. These goals range from clean water and sanitation to gender equality and quality education, with one of the more ambitious goals being the complete eradication of poverty, in all of its forms. It will require an enormous undertaking to achieve all 17 SDGs, and part of the challenge lies with the funding gap that is present in most developing countries, which is estimated to be “between $1.9 trillion and $3.1 trillion each year between now and 2030.”* The development community at large recognizes that significant additional financial resources will need to be mobilized over the coming 15 years. However, current political climates across many developed countries hint at foreign aid cuts instead of increases, raising the question “where will this needed capital come from?”<figure class="image"><img src="/uploads/un_sdg_0_51da451f50.png"></figure>CUE THE PRIVATE SECTOR:It is the belief of many that private sector investment will play an important role in assisting frontier economies address the development funding gap that they are currently facing. The reason is that many private investors (from equity funds to investment bankers) are increasingly looking to developing countries for their next investment opportunity. Emerging markets have historically offered strong investment returns, something that has not been ignored by savvy investors. “Private equity investment in emerging markets reached $57 billion in 2014, with increased interest from LPs resulting in fundraising totals far exceeding previous years.”**Emerging markets are truly on the cusp of a “perfect storm” for economic growth - young demographics, a growing middle class and increasing incomes - which will likely continue to translate to spectacular economic growth, even in the double digits for some countries. In fact, overall growth rates in frontier markets are exceeding that of developed, “with projections of market growth of 4.0% in 2015 and 4.5% in 2016, compared to 2.0% and 2.2% for advanced economies over the same period.”**So, let’s recap: we have a development funding gap, a need for traditional aid needs to be delivered in more effective ways, and a private sector that is increasingly becoming a major player in economic growth for frontier markets. What happens next?THE BLENDING OF TWO FINANCES:Development funders and private sector actors are joining forces under what is commonly being referred to as blended finance. You’re probably saying to yourself, “Great! Another buzzword I have to memorize” and wondering how the substance and meaning behind this phrase differs from others like “venture philanthropy” or “impact investing”? <a href="https://www.linkedin.com/in/joanmlarrea">Joan Larrea</a>, CEO of Convergence, does a great job in defining this relatively new term in her publication in <a href="http://impactalpha.com/sizing-up-blended-finance-a-guide-to-a-new-financing-approach-to-fuel-sustainable-development/">Impact Alpha</a>, Sizing Up ‘Blended Finance’: A Guide to a New Financing Approach to Fuel Sustainable Development:“Boiled down, blended finance simply encourages more private sector investment by being strategic with the money already at work from official development assistance and philanthropic sources. Blended finance transactions combine funding from development institutions, philanthropic entities, and profit-seeking investors and puts that capital to work in a way that is aligned with the UN’s Sustainable Development Goals (SDGs).”Joan goes on to elaborate that there are three defining characteristics in any blended finance activity, including 1) the deal is intended to yield a financial return, 2) the transaction contributes towards achieving SDGs in a frontier economy, and 3) the development funders are the catalytic force behind the deal.It is this third point where a lot of the magic happens. Investment opportunities that normally be passed over by large venture capital firms (for being too small), or passed over by microfinance institutions (for being too large), are now seeing the light of day. What’s painfully obvious but often overlooked is that these small- to medium-sized enterprises (SMEs) represent the backbone of any developing or developed economy, and without them, a missing middle in the economic pyramid is created, resulting in unstable or stagnant growth. Finally, with the assistance of governments, foundations, donor agencies, development and commercial banks, and private investors, these SMEs are given access to much-needed capital, which in turn allows them to scale operations, create sustainable jobs, grow into market leaders and attract additional sources of financing.KEY STAKEHOLDERS &amp; PLAYERS:There are several key stakeholders in the blended finance field. Governments agencies, such as USAID, GAC or DFID, and philanthropic institutions, such as the Bill &amp; Melinda Gates Foundation or The Rockefeller Foundation, play an important role given their higher tolerance for investment risk and lower return expectations (relative to commercial or investment banks). These institutions deploy their capital using a range of investment instruments and securities, accounting for $135.2 billion in OECD Official Development Assistance in 2014.**Blended finance provides private sector investors and lenders the opportunity to reduce the uncertainty and costs related to high-risk investments in an emerging market by leveraging the financial support, project administration, and local expertise that development funders can provide, allowing for a wider range of investment activities to take place.**This relationship between the private sector and public sector can also be categorized under a public-private partnership model, which RENEW and the Impact Angel Network currently use in Ethiopia. By working with development funders who cover the high transactions costs of operating in an emerging market, RENEW is able to manage a diverse portfolio of companies, be our investors eyes and ears on the ground in-country, source an exciting pipeline of investment opportunities and connect U.S. angel investors with driven entrepreneurs, all without charging a management fee.If you’re interested in learning more about RENEW, the Impact Angel Network or our unique business model, then be sure to stay tuned for an upcoming announcement of a new partnership between RENEW that pretty perfectly exhibits the power of blended finance.

How the “blending” of development funding and private sector investments could lead to sustainable economic growth.