<h1 style="text-align:center;">Recent U.S./Uganda Investment Forum in Chicago</h1>There is an ever-increasing voice within the African Diasporas to find common strategies to financially engage their home countries. The Ugandan Consulate in Chicago, Ugandan Embassy in D.C. and the Ugandan Investment Authority recently responded by hosting the first annual U.S./Uganda Trade and Investment Forum this September.For a first-time effort, the response was powerful. The Office of the Mayor of Chicago, the Ambassador of Uganda, the Governor of Illinois and State Department representatives were among the voices supporting a pro-active investment strategy. Additionally, six members of Parliament flew in for the event and shared their support from all reaches of Uganda. The room was committed to creating an enabling environment for trade and investment opportunities between businesses and government agencies located in the United States and their counterparts based in Uganda.There was also a significant private sector presence as the Bank of Uganda director, Ugandan investment bankers and fund managers mingled with dozens of small- and medium-sized entrepreneurs from both the U.S. and Uganda. Some were just getting the lay of the land while others were agreeing on specific action items between the parties.I was surprised by the frank, yet polished discussion and clear desire by the participants to stop simply talking about the potential and start doing something. The group heard from a variety of entrepreneurs who provide services or products and need linkages to build their business to the next level. Both the private sector and public officials were able to provide real value-add feedback to these business owners in terms of relationships, tax ideas, AGOA strategies, and further marketing. The government speakers outlined public benefits and programs that would enable investment or jump start current businesses.Although I didn’t see any contract signed in the room, it was clear that a wave of energy had inspired the parties. As I said goodbye and collected contact information I couldn’t help but note a real sense of excitement and hope for the path forward. The presence and meaningful participation from high level decision makers from both the public and private sector gave confidence to the men and woman from both the U.S. and Uganda who will be putting their money on the line to open the door for a vibrant trade relationship between the two countries.

There is an ever-increasing voice within the African Diasporas...

Uganda

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Recent U.S./Uganda Investment Forum in Chicago

<h1 style="text-align:center;">Application for Online Marketplace</h1>By completing RENEW’s application, business owners and managers can activate eligibility to be represented in RENEW’s virtual marketplace. The application should only take a few minutes to complete, and will provide potential investors with relevant information on your company.UPDATE (December 2011): This application is no longer available. To be considered for RENEW's portfolio, please <a href="https://www.renewcapital.com/contact">contact us.</a>

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Application for Online Marketplace

<h1 style="text-align:center;">Uncertainty in Africa</h1>To those wondering what will become of nascent capital markets in emerging and frontier economies in the wake of last year’s financial upheaval, I recommend a fascinating <a href="http://www.nytimes.com/2009/05/17/magazine/17wwln-lede-t.html?_r=2&amp;ref=magazine">piece by Niall Ferguson</a> in this Sunday’s New York Times Magazine; read it not for a prediction of what will happen but rather as a warning against overreaction. In it, Ferguson examines the human reflexes that drive reactions to financial crisis:"For reasons to do with human psychology and the failure of most educational institutions to teach financial history, we are always more amazed when such things happen than we should be. As a result, 9 times out of 10 we overreact. The usual response is to introduce a raft of new laws and regulations designed to prevent the crisis from repeating itself. In the months ahead, the world will reverberate to the sound of stable doors being shut long after the horses have bolted, and history suggests that many of the new measures will do more harm than good."Ferguson elaborates on the positive impact of financial innovation in the U.S. and abroad, dangers notwithstanding. For instance, the securitization of credit lowered costs for consumers in the U.S., while the globalization of finance drove huge growth improvements in emerging economies, particularly Asia. Now investors are pulling back and regulators are swooping in - both healthy reactions so long as they aren’t overdone.Yet it’s difficult to know where the crisis and the reactions that follow will leave Africa’s markets. A recent paper, titled <a href="http://www.cgdev.org/content/publications/detail/1422072">How the Economic Crisis Is Hurting Africa–And What to Do About It</a> by Todd Moss of the Center for Global Development, examines the effect of recent economic turmoil on capital flows to Africa as the continent struggles to steady itself amidst second and third-order financial sector aftershocks. For instance:"One unfortunate outcome of the crisis may be the strangling of the nascent and potentially very sizeable private equity sector. The Emerging Markets Private Equity Association reports that the number of its member funds targeting Africa rose from 16 to 21 in 2008 and new funds jumped by 37 percent to $3.2 billion. But it also expects a very difficult fundraising environment in 2009–10. Most of the private equity raised in recent years to invest in Africa (much of it with some official component, such as the multiple funds started by the Overseas Private Investment Corporation or the African Development Bank) should be locked up for the long term and is unlikely (or unable) to exit quickly. However, this asset class was just beginning to establish itself and the many funds that had not yet completed fundraising or were still being formed may find their plans delayed until the global situation stabilizes and appetite for frontier emerging markets returns."The effects on Africa’s private equity market are still uncertain. Much depends on whether investors see more risk in Africa these days than they did before financial crisis hit developed markets, says Moss:"The other unknown is how investors will interpret risk in Africa over the medium term. Many of the large institutional investors had begun to look seriously at frontier emerging markets such as Africa. Whether they will now recoil because of the perceived risk or view Africa as a potential diversification play in a turbulent world is still far from clear."The risks to business in Africa are real, but by no means should they prohibit investors from expanding their portfolios into one of the few regions of the world that is maintaining growth despite the present economic climate. There is also the fact that growth in Africa is driven by the formalization of a huge amount of economic activity that has until recently remained too disorganized to tap. It turns out we’ve all got some learning to do, and the lessons the developed world is re-learning about solid business practices are the same ones African businesses are starting to absorb. The recent economic experience should draw investors and stable businesses together, wherever in the world they are.

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Uncertainty in Africa

<h1 style="text-align:center;">When People are in Need, Charity is Tempting</h1>Charity is tempting, but ultimately unproductive. Today’s Washington Post has a story titled, “World Bank Cuts Growth Forecast for Developing Nations” (some regions, like Sub-Saharan Africa, are still growing though, unlike the West). A headline like this sends people immediately into a scramble for foreign aid and charitable giving to offset the pain these countries are feeling. Not so fast, writes the Post:“The assumption is that just mechanically pouring money and credits into poor countries makes them have higher growth,” [William Easterly] said. “We have 60 years of evidence against this proposition — lots of money pouring in without discernible growth effects.”"Perhaps the best way for wealthy countries to help the rest of the world is to get their own economies back in gear," said Harry Broadman, a former World Bank official and now managing director of the Albright Group.“First and foremost, the engine of growth is not going to be aid,” he said. “It’s going to be the boost in external demand from growth occurring in the industrialized countries.”All the better if that growth in rich countries is directly fueled by the success of businesses in developing countries. Concerned individuals in the US and other Western countries need to approach the need in developing countries as a business problem, not a charity problem.

Charity is tempting, but ultimately unproductive.

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When People are in Need, Charity is Tempting

<h1 style="text-align:center;">A Case for Impact Investing, Cont.</h1>What if the solution to global poverty didn’t rest in the hands of a few Harvard economists, or executives from the World Bank, or some leading development experts on retainer in Ghana? Not in a massive government building, nor within the ivy-laden walls of a university, nor at the podium of the United Nations. What if the solution is in the mind of a Ugandan seed producer and a business-savvy American? RENEW believes that a significant piece of the poverty puzzle can be solved when such a tourist meets a passionate, hard-working entrepreneur — particularly when this happens 100,000 times over.In our January 23, 2009 post, we met the Ugandan entrepreneur. Now let’s meet our tourist. Keep in mind, it may be you or someone you know. They’re your neighbor down the road, your friend Tom. The one that just took that safari last summer. If you were traveling with him, this is what you may have seen…After an amazing journey through some of the most rugged and beautiful land on the planet, and seeing a spectacular range of wildlife, Tom was convinced that he and his family had truly experienced Africa. On his way back from the reserve, his kids got thirsty, so Tom stopped by a small store on the roadside to get some drinks. Stepping out of the Land Rover, he was immediately surrounded by a group of children begging for money. Because Tom’s a compassionate person, and because he just spent $5,000 on a safari, guilt causes him to hand over some spare change from his pocket. The four children scuffle to divvy up the loot.As he walked into the store, three vendors immediately surrounded him trying to get Tom to buy from them – “all the stores are the same,” Tom thought. Trying his best to drown out their pleas, he finally found what seemed acceptable and bought four warm Cokes. After he handed off a few bills from his wallet to the lucky vendor, he noticed the other two peacefully turn away and return to their respective perches, waiting for the next tourist to come by. As Tom climbed back into his SUV and headed for the airport, he was noticeably distant, gripped with cognitive dissonance — Africa is beautiful and full of potential, and yet gripped in poverty.You watch Tom contemplate this dilemma in his head, idly staring out the window at the distant city skyline. You notice that Tom seemed troubled during the entire flight home. After what seemed to be hours of squirming in his seat, Tom leaned over to his wife and started with his famous “what if.” You’ve seen this before — Tom starts in: “What if those were our kids on the street?” “What if I was that vendor and that was my business?” “What if I hadn’t been raised on Elm Street, but in a back ally of Nairobi?” “What if I didn’t get an education, or have that amazing teacher?” He asks these, not expecting an answer, but searching for resolution.His thoughts wander back to what it was like growing up in America. He went to high school, fell in love and graduated from college. He worked for a good company, and after a few years of making a name for himself, he and some friends had an idea. They wrote out a business plan, moonlighted for a few months, scrounged up some money from friends and family, and went full-time to work on their dream. They got the business going, and then got a loan from a local bank. Ten years later they sold the company, made a few million and went their separate ways. Tom was now trying to spend some much deserved time with his family. His kids had been talking about Africa ever since they saw some movie in school about the civil war in Sudan, and they pleaded with him to take them on an adventure. Just excited to see his children interested in something other than Xbox or American Idol, Tom jumped at the opportunity; he was ready for an adventure too. So he contacted his travel agent, booked a flight and there they were in Africa…Now we get to ask “what if.” What if Tom had a way to deal with his dilemma? What if he were able to shift his association of Africa with poverty to Africa with opportunity? What if he were able to zoom out, and see the economic development that could occur if provided the right support? What if Tom had not gotten out of his Land Rover, and instead, driven to the industrial park on the outskirts of the city? What if Tom would have met the business owner in need of capital and support (<a href="company-profile-case-impact-investment.html">Read that story</a>)? After all, she had employed the mothers of the children Tom had met that day. What if they had a conversation, and the owner told a story of a vision she had to start a company that employed women and supported a growing industry in her country, one that would provide seeds and jobs to thousands of small farmers?But instead: she sadly explains that she had to let some of her workers go last month. The interest rates on the bank loan she had to take to meet the demand of a contract that didn’t yield the profit she needed to keep the employees on once the contract was over.Here’s the secret that the scholars, economists and experts haven’t grasped: The solution to poverty will become clear when Tom, and the thousands of others who have had similar experiences, meet the business owner and begin a business relationship; one that unlocks the vision and potential within the entrepreneur, and addresses the dilemma within Tom. The interaction, and thousands like it, will shift the way that we in the West see Africa. But first, Tom must encounter the entrepreneur.Stay tuned…

What if the solution is in the mind of a Ugandan seed producer and a business-savvy American?

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A Case for Impact Investing, Cont.

<h1 style="text-align:center;">How Does Africa Look Now?</h1>When we first launched this blog about 9 months ago, the first piece we put together - while the global economic situation was still fairly optimistic, mind you - made the case for “Investing in unfamiliar territory” by listing <a href="../../renew/blog/2008/investing-unfamiliar-territory.html">10 compelling reasons</a> that investors should consider Africa much more seriously. Then in September, I blogged about an IMF report that compared the economic prospects of a group of Sub-Saharan African (SSA) countries (largely the same group in which RENEW currently does business) to the position of East Asian economies in the 1980’s, just before their growth took off. The comparison was striking - but does it still hold? The financial sector has undergone major shocks since last summer. What are we to make of Africa as a destination for investment dollars, these days?Well, this is not a light and heady time for African economies - or businesses - to be sure. Almost a decade of consistently strong GDP growth in SSA has been snatched away by the global downturn; credit is tight and leaders in all sectors feel the pressure.But financial crises have a funny way of upsetting conventional wisdom in ways that periods of growth and prosperity cannot. Many SSA countries may have been posting impressive year-on-year growth, but that didn’t seem to be enough to catch Western investors’ attention while other options closer to home beckoned - with ultimately illusory returns. Now that Western markets are in upheaval, business analysts are taking a more serious look at Africa.On the heels of fresh, powerful critiques that question the long-term value of foreign aid to Africa and champion a business approach (see former Goldman Sachs economist Dambisa Moyo’s compelling new book, “Dead Aid,” and her Wall Street Journal summary article, the Harvard Business Review included a piece titled Now’s the Time to Invest in Africa in its Breakthrough Ideas for 2009. Just this week, Time ran its “What’s Next 2009″ feature; sure enough, it includes a strong case for investment growth in Africa titled Africa, Business Destination.The conclusion these articles draw is not that while Western markets languish in uncertainty, Africa has become the new safe-haven. The continent still struggles in many areas. But global economic crisis has cast in stark relief just how much African economies will grow during the next decade, even in the face of worldwide recession. That doesn’t fit with typical Western expectations of Africa. Time quotes IMF senior advisor David Nellor:“The private sector is the key driver,” wrote Nellor, “and financial markets are opening up.” War is down. Democracy is up. Inflation and interest rates are in single digits. Terms of trade have improved. "Crucially,"* said Nellor, “growth is taking off.” The IMF puts Africa’s average annual growth for 2004 to ‘08 at more than 6% — better than any developed economy — and predicts the continent will buck the global recessionary trend to grow nearly 3.3% this year.The Time article, as well as Dambisa Moyo’s article in the WSJ, outline a host of other reasons to take a truly business-led approach to Africa, not least because of the social and civic dividends in accountability, dignity and long-term sustainability that business-led grow will yield. But for our purposes, let’s take a step back and be clear: Africa’s economies, driven by the growth of private businesses, are still growing at a time when Western economies are shrinking. Imagine what these businesses are capable of achieving once capital markets and consumers around the world come out from hiding.

What are we to make of Africa as a destination for investment dollars, these days?

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How Does Africa Look Now?

<h1 style="text-align:center;">Never Waste a Good Crisis</h1>This entry is cross-posted on <a href="http://www.nextbillion.net/blog/2009/03/17/never-waste-a-good-crisis">NextBillion.net</a>.President Obama and Secretary of State Hillary Clinton are fond of <a href="http://www.reuters.com/article/environmentNews/idUSTRE5251VN20090306">reminding</a> the press that leaders should “never waste a good crisis.” During times of upheaval, people are scared, but they’re also willing to try something different. That applies in both the political and <a href="http://hbr.harvardbusiness.org/2009/02/seize-advantage-in-a-downturn/ar/1">business worlds</a>.RENEW was launched in the midst of upheaval. Incorporated two years ago because we saw an opportunity to grow small businesses in developing markets, RENEW was designed to implement a set of new ideas about what investors who rethink their model can accomplish in markets largely “hidden” by their lack of structure.Of course, another sort of upheaval quickly followed. Just as RENEW launched its on-the-ground operations in East Africa in November, global markets fell into disarray. The fallout is still falling out. In the meantime, RENEW, one company among many in the burgeoning BOP/double bottom-line/social enterprise/pick-your-descriptor marketplace, is determined not to “waste” the present financial crisis.First, the basics: RENEW is a social investment intermediary that sources SMEs for U.S.-based investors, conducts due diligence, manages the investment, and provides life of the investment consulting to support business growth and gauge social impact. In the strictest sense, those are its service offerings. But during the two years that the company has been working with investors and entrepreneurs, we’ve come to envision more than the addition of an investment intermediary to the marketplace.We see an opportunity to create a new set of expectations between capital and the entrepreneurs and managers who shape investment capital into enterprises that create value and generate return. We believe investors should be able to generate meaningful financial return and see sound governance at work when they deploy capital to SMEs in developing countries. And we believe that managers of these SMEs should hold themselves and their employees to the sort of ethical and operational standards that will allow them to compete globally in the 21st century.We’re not the only ones. Last summer, a group of 35 scholars and business executives assembled to lay out a road map for reinventing management to make it more relevant to a volatile world. (These findings comprise a February 2009 Harvard Business Review article titled <a href="http://hbr.harvardbusiness.org/2009/02/moon-shots-for-management/ar/1">Moon Shots for Management</a>.) The group, which included luminaries like C.K. Prahalad and others familiar to NextBillion.net readers, was inspired by a collective desire to help managers overcome what they call “ambition-deficit disorder. What, we asked ourselves, was management’s equivalent to unpacking the human genome, inventing a cure for AIDS, or reversing global warming?”The group synthesized its discussions into a list of 25 grand challenges for managers in the 21st century. At least half of these will make immediate sense to many NextBillion regulars. (For example: "#1 Ensure that the work of management serves a higher purpose; #2 Fully embed the ideas of community and citizenship in management systems; #13 Develop holistic performance measures; #22 Enable communities of passion; #23 Retool management for an open world.”)Similarly, throughout the course of RENEW’s initial market research on investors in the United States and managers in the developing world, we saw “ambition-deficit disorder.” To be sure, in some areas investors exhibited <a href="http://www.wired.com/techbiz/it/magazine/17-03/wp_quant">too much ambition</a>; financial markets are undergoing severe corrections as a result. But when it comes to the fundamentals of finding, investing in and building ethical, well-managed businesses, capital markets have not been keeping up with what’s going on in developing countries. To a large degree, illusory returns in developed capital markets obscured real opportunities in new markets. Take this growing business in Kampala, for instance. In fact, the same February 2009 issue of the Harvard Business Review cited above featured an article titled <a href="http://hbr.harvardbusiness.org/web/2009/hbr-list/now-the-time-to-invest-in-africa">Now’s the Time to Invest in Africa</a> as one of HBR’s “Breakthrough Ideas for 2009.” The managing director of the International Monetary Fund, speaking this week at a conference in Tanzania to examine the effect of the financial crisis on low-income countries, <a href="http://www.imf.org/external/np/speeches/2009/031009.htm">said</a> much the same thing.There is opportunity aplenty in the midst of this crisis. The “Moon Shots” group and others working to create a shared code of conduct for managers, taken together with recent studies on the prospect of a true impact investing marketplace (see the Monitor Group’s excellent report) offer an alternative to the myopic view that investors and managers tend to suffer from as they evaluate investment opportunities and craft strategies for business growth. Renew aims with its services to provide a template — and real-life examples — of how impact investing meets better management in practice. But we are one small part of a large marketplace. No one with similar goals should waste this crisis.

During times of upheaval, people are scared, but they’re also willing to try something different.

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Never Waste a Good Crisis

<h1 style="text-align:center;">Company Profile: A Case for Impact Investment</h1>It’s no wonder there’s an air of helplessness that lingers over the streets of Kampala, Uganda. Negative messages abound. One source of these messages comes from an unexpected and unintentional place. At any moment a pedestrian walking along the street can read names like “Save the Children”, “Food for the Hungry” or “Mercy Corps” bannered across the side of white sport utility vehicles as they speed by. These vehicles roam the city and town centers of the roughest parts of the world, carrying people who deliver services to those in dire need. Pedestrians walking to work, teens hawking goods or students waiting patiently for their bus may see these vehicles and think “the people sitting inside are here because we, Africans, need help.” I wonder if these rolling billboards tell them “there’s a problem here, and foreigners have come in to fix it.”The words jump out at you. “Save”, “Feed” and “Mercy.” It’s clear these words originate from a legitimate need for NGOs to ensure that donors in the U.S. and other developed countries know that what they are doing is critical. These donors, and the NGOs they support, are making a difference. No one would argue that. Read through their annual reports and you’ll be happy to learn about the tons of food that have been distributed with their help. Or the thousands of vaccinations that have been given to children. Or, even the number of lives that have been saved from the streets. It is truly impressive. What these donors and NGOs may not realize is that on the other side of the world, there’s another side to this story that isn’t being told. A story that warrants not only our attention, but also an innovative response.The story begins by asking some questions. What impact is this NGO having on the rest of the population who does not receive direct benefits? What does the street peddler, the university student, or the local business owner feel when they see “Save” and “Feed” drive by them day-in and day-out? Do these names empower people to be agents of change?Let’s follow one such pedestrian. She is on her way to work at a small business situated tightly on a small plot of land in the industrial area of Kampala, just over the railroad tracks. Her company–let’s call it “Up and Coming”–has been in business eight years, but lately times have been hard. Employees receive decent salaries and most of the employees are doing their best to live out their dreams of educating their children and owning homes. The business pays taxes, and now employs about 20 men and women who work ten hours a day.When Up and Coming started there were only seven employees, and it achieved impressive year over year growth of 35 to 50%. But now things have slowed. The business has graduated from micro status and is at the threshold between a small and medium size enterprise. To pay Up and Coming’s staff and keep its margins, the company must bid on bigger projects. In order to meet the demands of these contracts, they need to buy the supplies, and because Up and Coming does business in a cash economy, it is forced to take out short-term loans from a local bank. The rates from the bank are 28%. The business targets a 33% margin and must now make a decision: not to compete and lose the contract, or take the loan and pray all of the other factors that impact their cost (electricity, gas prices, grain costs, a riot in Kenya) don’t strike. Up and Coming has 5% wiggle room.Management decides to take out the loan and satisfy the obligations of the contract. But because of the bureaucracy, red tape and forms, the customer [an international organization] takes four weeks to pay. Time is expensive due to the bank’s terms, and the business nearly goes under. Up and Coming must hold off on paying its employees, and a few (the more talented) get frustrated. One even leaves.After that, Up and Coming can’t compete on a number of government contracts because it can’t handle the size or the intense requirements that are embedded at the bottom of the request for proposal (RFP). So, the enterprise see a modest 5% growth.Now let’s follow Up and Coming for the next two years. Growth remains tiny in comparison to the early years. But the business has saved enough to buy another machine that will increase production to a point where Up and Coming can finally compete on something bigger. Up and Coming changed how it packages product, and the business achieves certification from the International Organization for Standardization (ISO). Management keeps accurate books so that they can offer audited financial statements—a definite badge of honor. They play by the rules and work hard to pay employees on time. Things start looking up.Finally, the day comes when they get a break. A government request for proposal (RFP) has been released asking for help with some development work financed by an international government grant. It’s perfect, and appears to be written to Up and Coming’s strengths; there is no question that it can meet the terms of the contract. Up and Coming has significant inventory, it’s hired 30 more staff, and established itself as a quality company with a good brand. Management prepares a sales pitch and gets ready for a chance to present.As they arrive at the meeting, the sales team finds out that a few other companies are competing on the same RFP. Two of the companies are known competitors which Up and Coming is positioned to beat. The other, however, is a newer company that has a government minister “consulting” for them. The company has some impressive marketing tools but no real track record. The minister, who is with the new company’s team, walks out of the room just as Up and Coming is entering to give its pitch. He’s laughing and shaking hands with the members on the panel. The sales team’s sprits begin to flag; they fear this sale won’t have much to do with their ability to deliver.The team does its best though, and they can confidently propose the lowest price among the bidders. As the team from Up and Coming leaves the building, it’s a bit more hopeful. But they call a week later to find out that, sure enough, the company with the minister on board was awarded the contract.Within another year the business is experiencing severe financial problems. Up and Coming is on the verge of going under because of the high cost of capital on their remaining loans.This is when I meet with them. I go to their office, on a hot day in January. I find their managing director waiting for me. She’s strong and proud, yet clearly veneered with a layer of bitterness and doubt. I can see it in her body language, and I’m mentally preparing myself for a battle. Business awards and pictures of her with the President of Uganda are hung around the office. Samples of her product are neatly displayed on a rack, and the table is tightly kept.“So. What are you looking to do?” she asks as we sit down. I can sense that she knows (she later told me she read through our web site), but wants to hear it from me. I ease into my story that I have given at least a hundred times. I speak for about five minutes and she listens patiently. I reach the end of my introduction and finish by saying that what we really look for, most of all, is good, ethical leaders that our company can support as they grow their business (I’ve already done some background checking on her and she comes highly recommended).My closing line must have finally done it, because she starts shaking her head and laughing. “I don’t believe that leadership is what a business needs anymore.”“I’m sorry - What?” I ask. I really thought I had misheard her.“I’ve tried ethics. I believed in leadership,” she continues. “I don’t think LEADERSHIP is what is required for a business to succeed here. You don’t win with ethics. People that cheat are the ones that get contracts.”I cautiously sympathize with her, and she goes on. “The U.S. doesn’t want to see Africa improve. You’re here to have jobs. The U.S. has been in Africa a long time. So, tell me. Why just now do you want to invest? What are your motives? Is this some ‘out of the box’ thinking that has resulted from your poor economy?” I was intrigued by her logic.I reassure her that we are trying to lay the groundwork for a new model: market-driven development. I tell her that there are groups in the U.S. that have slowly been organizing–that are trying to find new ways to partner with the businesses in developing economies. People that want to support small and medium-sized businesses. People who understand that it’s time for a change; the African business world must catch up. I closely manage my tone as not to imply too much hope.She nods her head, like she’s heard this all before. “Are you just going to talk about changes like you always do? Or are you serious, and want to have a real discussion?”I’ve heard this under the breath of many of the business owners I’ve been meeting with for the past two years, but she was one of the few that came right out with it. I have begun to realize that RENEW is at an interesting place, sitting between two skeptical players that want to work together, but don’t know how. The idea sounds great, but instead of business, we’re playing poker—each side wondering if the other is lying or really has a hand worth playing.A strong part of me believes that we can successfully broker a relationship between these players. Another part of me fears she’s right. That our work may not play out, that this idea might be too early or that excuses will always come up—a down economy, not quite enough information, or “just a little more time.”Having had to set clear expectations with everyone that I meet with, I’ve practiced my answer to her question more than once. This time however, I feel a bit more convicted. I look her in the eyes and say, as honestly as I can “I don’t know the answer to that. I don’t know if I can do anything for you. I’d actually ask you to expect that I can’t. We have a long way to go and a lot to learn.” But I tighten my grip on my chair, lean in and deliver a line that every member of our team has said at some point when things get rough: “All that I can ask is that you let us try. Change has to start somewhere.”She studies me for about ten seconds (felt like two hours), and then seemingly satisfied with my answer, slowly straightens up in her chair and lets a warm smile creep across her face. Pushing back her hair, she shifts focus to her laptop and says, “Would you like a presentation on our company?”Relieved, I smile and politely nod with a soft “Yes.”She delivered an impressive PowerPoint presentation; an honest display of her company’s business model (with flow charts), their financials, there strategy for the future, and the challenges they are up against. I am impressed, and we agree to have RENEW represent Up and Coming in the U.S.“I’ll keep you posted” I say, and desperately hope that I am able to come back with good news. As I pull out of the plot, I take notice of the cars on the road. There are large, beat up flat-bed trucks creeping slowly around massive pot holes. There are smaller cars running goods back and forth between warehouse and supplier. There a boda bodas weighed down by large steel rods, wood, and boxes. But, in this industrial area I don’t see any white SUVs around. As I played our conversation back in my head I wondered if the words on the sides of those SUVs had finally gotten to her. I went back to her question. I truly hope we are not just talking...

It’s no wonder there’s an air of helplessness...

Company Profile: A Case for Impact Investment

<h1 style="text-align:center;">Financial Services Over the Longhaul: Lessons from Recessions</h1>There’s no question that portfolios managed by financial services and wealth management firms have taken a nearly unrelenting beating in the past six months. That bodes ill for everyone, from retirees to entrepreneurs just starting out. In some ways, all the red ink can make impact investing seem like an indulgence–an idea only fit for flush times. But as Kevin Jones at <a href="http://www.goodcap.net/">Good Capital</a> writes, “When the existing system is at risk, people are willing to ask a new set of questions and take a look at new ways of doing things. For the people who believe you never could divorce economic from social value, the new reality creates a window of opportunity.”As social value becomes more “real” to investors, RENEW sees a window of opportunity opening for wealth managers, who can now offer to capture and present social returns as part the portfolios they build for clients. The prospect of capturing social value in client portfolios provides a distinct competitive edge at a time when wealth managers are reeling from losses and defending their value to clients. Social value, approached with the same thoughtful, measured method that financial firms are now re-emphasizing in their portfolios, amounts to a new service offering that can help investors capture and enjoy all the value their investments are creating.Not only is the economic crisis forcing investors to consider the social impact–positive and negative–of finance; we’re also learning that a range of investments, particularly those outside of sectors and regions traditionally regarded as “safe,” can actually insulate investors against downturns. This was one of three findings in a study published in the December 2008 Harvard Business Review, titled “Lessons from the Past for Financial Services.”Authors Matthew Sebag-Montefiore and Nuno Monteiro analyzed seven downturns affecting 600 North American and Western European companies in banking, asset management, consumer finance, insurance, investment, and specialty finance over the past 28 years. Among the recommendations that emerge from this research: “Banks that were high performers in the early phases of the current downturn drew, on average, nearly 10% of their revenues from outside North America and Western Europe prior to the softening. That’s compared with 4% for low performers.”Investments in small and medium-sized businesses in emerging economies certainly come with their own set of risks. But if the recent financial collapse is teaching us anything, it’s clear that creatively diversified portfolios are more valuable than ever.

There’s no question that portfolios have taken beating in the past six months.