 Good morning everyone. Can everyone can everyone hear me? Okay Good morning and welcome to What's going to be a fairly intimate content conversation on opportunities for impact investors in South Asia and East Africa we have we have a great panel this morning of three investors each of whom has significant experience Investing in either one or both of these regions. And so if you're an investor Who's considering these markets? This is your opportunity to hear from active investors what they think Are the exciting prospects and that you're an entrepreneur, you know This is your chance to hear from investors what they think is exciting and potentially what they Don't think is as exciting and so Before we get started just a little bit of a little bit of background Just right there Just a little bit of background before we get started, you know, one of the things that the gym Does a lot of work on is research on the market opportunities and market trends in impact investing and while there's a growing body of research on impact investing at the global level There's still a lack of research detailed research at on impact investing at the regional or the country level And so we thought it would be valuable to take a closer look At that and so for the past One and a half years we've been working on conducting landscaping studies of the impact investing markets in South Asia and Sub-Saharan Africa specifically different the UK Department for international development is Has been a great partner of the gym for several years and it's thanks to their Generous support that we've been able to conduct this research in both of these markets So far we've completed studies in East Africa and South Asia, and that's what we're going to be talking about today We've got reports focused on West Africa and Southern Africa coming up in the next couple of months We work with two excellent research partners in these regions in South Asia We work with the Dalberg office in India to map the industry in six countries in South Asia And in East Africa we work with the open capital advisors team Based in Nairobi to map the industry across 11 countries in East Africa Both of these reports including detailed country chapters are actually available for Individual download on the JIN website If anyone's interested in printed copies of the executive summary of both of these reports I have several up here, and you can come and get one from me at the conclusion of this Before I've handed over to the to the panelists I'll just wanted to provide a couple of brief highlights from the research that we conducted So what do we find? I think the first thing to note is that you know We found robust and growing impact investing markets in both South Asia in East Africa. We worked with Slides of switching We worked with our research partners to build very detailed databases of impact investing transactions In both of these regions We went back as far as 10 years to try and capture all the impact investing transactions that have taken place We may not have got all of them, but I think we got a significant proportion and What we found is that you know, there are At least 130 investors impact investors have deployed capital in South Asia over the past decade and about a little over 150 in East Africa In terms of volume 830 million dollars approximately has been deployed in South Asia And one point four million dollars four billion dollars approximately in East Africa It should be noted that these figures exclude the investments made by development finance institutions or DFI's DFI's On their own have invested roughly eight billion in each region and you know We separate the two of course because DFI investments are naturally quite quite different in nature Typically tend to be large projects and more mature Companies that they put that they invest in DFI's own also play a very critical role in both regions supporting the ecosystem Advocating for policy changes Regulation to support investment and they've also actually acted as anchor investors in a lot of impact investment funds operating in both South Asia and East Africa if we look at it by country in South Asia, not surprisingly India's the largest market those sizable volumes of capital have been deployed in Pakistan and Bangladesh and Sri Lanka in East Africa Kenya is the largest market and then significant volumes of capital in Tanzania and Uganda as well We also took a look at how this capital has been deployed by sector and again perhaps not surprisingly Apologies for the slides moving around Again, perhaps not surprisingly financial services was the most popular sector though Impact investors have also been active in energy health care housing and other sectors DFI's for their part have also focused on financial services and energy though The approach that they've taken has been has been different So for example in the financial services space DFI's have often invested in commercial banks and then encourage them to online to SMEs So to tackle the financial inclusion problem top-down Whereas other impact investors have focused on startups and microfinance institutions To address the financial inclusion challenge bottom up and similarly in the energy space DFI's have focused on large-scale energy projects Other impact investors are focused on startups that are providing off-grid solutions renewable energy solutions to those populations that don't have access to access to the grid and so While we've seen obviously significant activity and growth in these markets the need remains significant both South Asia and East Africa have large populations Very significant social economic challenges and the opportunities for impact investing and social enterprise to play a role remains Remains huge and so that's what's going to be the focus of today's discussion with these panelists is really to talk about What are the opportunities for impact investors and social enterprises in these regions in the interest of time? I'm not going to provide lengthy introductions, but just very quickly. We have Maya Porengo who is one of the four founding partners of Lovar equity Lovar is One of them, you know well known and more successful impact investing funds Operating in India. They also invest in various Latin American markets We have Kaleen Alvarez from Indigo social finance and Kaleen has many years of experience 10-15 years of experience Helping SMEs in emerging markets raise capital from from impact investors And then we have the class Raj who's director of investments at Axion Venture Lab And the class has significant experience in the financial inclusion space In India and emerging markets more broadly And so the way we're going to where we're going to start to the session today initially I'll have each of the panelists spend a few minutes Describing for you there They're fun and their strategy and approach so that the audience gets a better sense for For their approach and what they think are the opportunities in their markets I'll then ask a few questions just to dig into Things in a little bit more detail and then we'll open it up to the audience for any questions that that you might have For for the panelists as well. So without further ado, let me Ask Maya to kick things off. Sure. Good morning, everyone And a little known fact might be that Abilash was one of the earliest members of the Elevar team before he decided to bring his considerable strength to the gin after After his his stint at the Kennedy School, but so a lot of what I'll talk about Abilash was responsible for for laying the seeds for when he was with us in Bangalore Elevar is an early-stage venture investor in Companies in Latin America and in India. I'll direct my comments primarily to India, but they Are resident in in our Latin American investing as well We are predominantly a financial services investor, but we also invest in housing health care and education We take our cue really from what we see as the largest needs of the low-income communities that My partners and I and and our team spends a lot of time with on the ground and in our first fund We are we're now investing out of our third fund our first fund was a microfinance fund the second fund invested Predominantly in what I'll call financial inclusion 2.0, which is low-income housing payments small business lending and in our third iteration we are doing things like education finance some fintech companies Basically moving with with the trends that we see in the market We make investments that are generally in the million to five million dollar range at the outset in India We do invest in startups, but our startups are founded generally by extremely well respected Executives from the education space from the financial services space ex-city bank senior people ex-unilever types Who are? Dedicating their energies to building a substantial business that Fundamentally serves the need of a very large customer base whose needs are not being met by the market or even by government So we do complete startups in India. We have taken companies through IPO We have seen all of the challenges along the way and we really see ourselves as backers of great entrepreneurs Who are extremely customer-focused delivering essential services to communities that are highly underserved? Yeah, so my name is Kayleen and my perspective is sort of as I've always mentioned I've been working in emerging markets and microfinance and with SME banking for almost 20 years now As a consultant and in the field I started as a Peace Corps volunteer in microfinance and then ended up on Wall Street So I've sort of covered the whole spectrum and so our investment thesis and our and our business model in fact is Focused on meeting in the middle meeting where development and finance meet to move the needle So our approach is providing debt funding for SME small and medium enterprises in the supply chain and ethical Textiles in fashion and South and Southeast Asia that sounds very focused, but that's huge 70% of the world's textiles go through South and Southeast Asia at some point We're also looking at micro supply chains in East Africa Latin America and Central America as we see ethical textiles and fashion growing globally Our approach is debt funding. We're not focusing on exits. We are in these markets to win these markets Businesses are built from the ground up not from the top down and that's our approach We're partnering with small entrepreneurs so that in three years or five years or ten years or 20 years The conversation about exits and pipelines will no longer be relevant They will be there for impact investors, but more importantly, it will just be good investment. It won't be impact investment Like I said, I come from a development background So our approach is very much trying to solve the problem from the inside out and I'm happy to see at this conference this year There's a whole track on supply chain financing our approach with supply chain financing is that for art from our perspective It gives us transparency into the supply chain Which helps with creditworthiness for clients and it helps us build stickiness not from a contractual perspective Because the contract says or the collateral says that you have to repay the loan But because we're first in line and we have stickiness with the client They want to work with us not only do we provide financial capital But we also provide this connective capital that we've been talking about Making sure that the companies that we lend to are cleaning and greening their supply chain And we're hooking them up with other suppliers and buyers that are trying to do the same thing What we're trying to do is promote An alternative to the Chinese race to the bottom model where inputs and labor is really what it's all about Is that picture gonna stay up this entire So I work for for venture lab axion venture lab and venture lab is a venture fund that invests in and Supports seed stage financial inclusion focused companies around the world as a bit of context for those of you that don't know axion axion is a 50-year-old plus Microfinance investor technical assistance provider manager, and it's really been a part of the kind of Commercialization of the microfinance model and really the financial inclusion World over the over the past decades venture lab started much more recently. We started in 2012 With really the goal of unleashing startup led innovation in the financial services space to improve financial access The quality of financial services and the scale of financial access our core hypothesis is that startups Properly funded and enabled are primed to drive innovation in the financial services world So we are supporting those startups in the markets where we invest in India in East Africa It is still the case that these ecosystems are not quite developed a lot of businesses At the at the really early stage are seen as pre investable By conventional kind of commercial investors. That's where venture lab steps in we invest a hundred to five hundred thousand dollars Usually in equity or hybrid equity in these businesses We come in like I said very early. These are businesses that usually have a product in market Some evidence that customers actually want the product some kind of revenue But but usually not a lot and a full-time highly credible team in place But that's about it. Our companies are not profitable They usually don't have very much revenue what they do have is a big idea for how to change financial services In there in their market or around the world We come in we provide capital. We also provide management support. We tend to sit on boards. We provide guidance around fundraising Expansion scale We also connect our businesses to the axion network this kind of global network of financial services providers We also have our own in-house management consulting group that spends anywhere between a couple weeks and a couple months With our companies helping them on kind of core strategic issues In terms of sectors, I think we'll we'll talk more specifically about what we've invested in in Africa and India in terms of sectors We start with the thesis that there are big kind of fundamental Shifts and emerging technologies that are changing the way that that the underserved can access financial services things like cloud computing social media mobile Can be catalytic in in in being kind of infrastructure upon which new financial services products are offered So we look at those kinds of forces at work And then we think of themes that are really utilizing those forces So things like marketplace lending that uses the internet social media to connect new sources of capital with underserved borrowers Digital SME lending kind of kind of all online acquisition vetting of borrowers new data new forms of customer engagement and credit empowerment since these trends tend to have an outsized impact on Developing markets where there isn't necessarily a vested existing technology or infrastructure We tend to focus on those markets. So we we spend most of our time focused on India and Asia East Africa in in Africa Mexico and Latin America and the US And we're about split evenly amongst those four geographies. Why don't I pause there and we can go into diversity of investment strategies and approaches just just on this panel itself, you know, we've got a mix of equity investors debt investors those investing in I guess the 50,000 plus range close to the half million range and then 1 million to 5 million and Those that are I guess focusing on having an impact through reaching customers those that are focused on having an impact through supplier focused model and so you know, I think what I'd like to Do is have a conversation that digs a little bit deeper Into some of these opportunities in these regions and and the approaches that these investors are taking and then leave plenty of time For you to have your ask your questions Towards the end of the panel as well. Maybe I'll stop with you because your Your fund focuses on both East Africa and South Asia India in particular How do you in your experience compare and contrast these two these two markets and how do you see the opportunities being similar or different Yeah, I mean it there's a lot of similarities between these markets, obviously a lot of differences as well In both markets, we've gotten we've we've spent a lot of time thinking about how We can either support Lenders that are providing services to small medium-sized businesses In invest directly in those lenders. So we've invested in technologies that help lenders make better credit decisions acquire Potential borrowers cheaper more efficiently. We've also supported actual balance sheet lending businesses The difference I think is that in in Kenya in East Africa Given mobile money the kind of ubiquity of mobile money a lot of that kind of privileged insight that that that additional bit of information that allows a borrower to go from a potential Real loan to or from a from not alone to a loan comes from mobile money So in in East Africa, we've invested in companies like first access That is using credit scoring models based on mobile phone data We've invested in a company called umati capital that provides invoice discounting to agri value chains using mobile money We've invested in a company called copo copo, which was the first Mobile money merchant acquirer for M. Pesa that is now using that information by being kind of a part of these payment flows To actually provide merchant cash advance financing products So it's solving this this problem of a lack of information an inability to kind of access and then Build trust around these borrowers. It's often using it using mobile money to do that in some shape or form in India It's it we've we've been a little bit more broad. I think with how we've How we've approached that same problem? so We have a couple investments one of them with with L of R in direct lending businesses that instead of using necessarily high Technology or new mobile money data or anything are using just a kind of industry sector focused approach to gain that kind of acquisition and and and underwriting advantage so Varthana for instance Is a lending business based in Bangalore that does nothing but lend to affordable private schools? And they know that customer better than anybody else so they can develop kind of a Sector-based shorthand that makes them much better at Identifying who the best credits are within that market Bringing them on board much more quickly. We have a similar investment in a business called. I finance in Delhi They use a sector-based approach as well around industry clusters in North India I'll just point quickly to Another way that we are looking at SME finance in India, which is a business called SME corner SME corner is a is a Bombay based Marketplace platform that connects SMEs to to lending institutions and they play that role of adding Insight and information to the SME so that they're more palatable and and and and make more sense to a potential lender My I'm maybe moving on to you Elevator is now in its third fund Close to 10 years now since the first fund started investing and so how have you seen the market evolve over time and and how is your strategy changed? And I guess what does that mean for what you know? You're going to be focused on in this third fund going forward. Absolutely. I think there are several overarching trends Back in the 2005-ish era when we started our first fund The big opportunity and need was really about access and this was at a time when There were really really really what I'll call dark spaces in terms of customers who just Weren't served at all and so microfinance was probably the most efficient way to get access to have that last-mile connectivity and the provision of you know very often a first the first formal financial service a Low-income household might have so our emphasis back then was in microfinance because my team and I are really energized and believe in Innovation Once the landscape was set and it started to happen very quickly in India with the number of microfinance institutions that were funded in That middle mid-2000s timeframe We started to look at what I'll call deeper needs and the Migration from microfinance into small business lending into low-income housing into starting to see how payment systems or different Technologies could enhance the delivery of products and services and reduce transaction cost became more of the focus area I think if you fast forward and look at what is happening today the regulators have also Tried to keep pace with the way that the industry is changing the the landscape in India has been reset even within recent weeks with the awarding of different types of payment bank licenses small finance bank licenses and It's very natural that axion and ourselves would look to what are the new technologies that can further deliver value Not just access, but can we understand what customers really need and where we can provide true value at a deeper level How can we use technology to continue to lower costs by ten times continued up to increase outreach Outreach by ten times and how do we serve new sectors that are not necessarily the individual? Iconic microfinance entrepreneur, but the small businesses that are really the engines of the economy that still operate in the informal sectors So if I look at the wave of our investing in financial services, that's how it's gone Beyond that what financial services business models have has done is to inform opportunities in healthcare in Education in agriculture and so we've started to venture beyond Core financial services and look at how the learnings of how unit economics works for financial services companies in serving the poor with Small ticket sizes, but the need for high volume. How can we adapt that and use those kinds of findings for? perhaps more difficult sectors to to address health care education and others Almost sort of avoiding certain avoiding the path that say other countries have gone through and you know coming up with technology They're a little bit more advanced or sophisticated to reach the unbanked populations Haley you're focused on on a sector. I guess Textiles and ethical textiles, which we don't often hear of as being associated with Impact investors and at least in our research we didn't find too many examples of investments in that space And so I think it'd be helpful for us all to learn about you know How you see The attractive business models in this space from both the financial perspective and I Think for us it goes back to this middle MSMEs have always been in the middle and we're trying to tackle that in middle We're trying to bring cohesion around financing in an industry and the textile and fashion industry is huge And arguably probably one of the most outdated Supply chains and industries you've got all kinds of labor issues environmental issues and that kind of thing but I think for us really what we saw is that Supply chain financing is an underutilized tool and in using finance to provide leverage in a supply chain Root capital has done an amazing job of doing that in the agricultural space We're not trying to reinvent the wheel or work harder just work smarter And we see so many parallels in the supply chain for textiles and fashion and it's such a large supply chain We're applying a model and one of the interesting things about the fashion and textile supply chains is that it is so bifurcated It's artisanal and it's craft and it's cottage or it's these huge conglomerates So again for us, we're just trying to meet in the middle We've seen some fantastic innovations in the last two or three years or even longer. You've got indigenous with With Scott is he here? I don't know and my aunt is an ethical fashion brand out of New York City And even in the investing space, you've got town investments now That's looking at equity and tackling some of the labor issues and we're really just seeing it come together There's this the shift away from fast fashion and all the NPR reports on the $5 t-shirt and stuff like that And and awareness is happening, you know Patagon is made Patagonia has made a commitment to clean and green their supply chain through shareholder advocacy retailers are being forced to have a transparency in their supply chains and We're even seeing some of the retailers now doing their own supply chain financing So for us, perhaps it's new to the impact space, but like I said earlier in 20 years, I hope we're not having a conversation around impact investing It's just good investing building sustainable businesses that do the right thing Socially and in terms of gender justice and in terms of environmental issues are just good investment decisions and Jens done a lot of research on that and I think that hopefully That's a trend that's going to continue You alluded to this in your in your response Your website and Speaks about the missing middle as a focus for your respective firms We often hear about the missing middle and how it's a bit of a Bermuda triangle for for impact investors And so you know love to hear a little bit more about what both of you think Takes to you know to make investing work In the missing middle is it certain types of business models or is it more of a structuring issue or is it something else? Maybe Kaylene will stop with you and then move to the cost sure in my experience in working with entrepreneurs and in working with financiers whether they be microfinance institutions or SME banks and and now as an entrepreneur myself Entrepreneurs building businesses, especially smaller businesses are looking for partners And our approach is to be a partner and helping them build their business And I think that's kind of what's missing in the middle so many entrepreneurs don't understand fancy debt and equity structures and You know convertible structures and all that kind of thing They're just trying to run a business and so we're trying to approach them as as a partner in that as a financier and not as a bank and I think again, that's why we're Working through debt because for us a good underwriting process is an objective look at the business and our Underwriting is very transparent and we're working with the business owners to understand the risks in their business so that they can grow good businesses Yeah we invest in a lot of a lot of missing middle lending businesses and I Talked a little bit about what makes those businesses interesting to us as investors and it's If you think about we talk a lot about Matt Harris's three-legged stool what what makes a Lender kind of interesting from an investor's perspective is some kind of advantage around Acquisition around underwriting or around kind of access to to debt capital Finding companies that are doing a really good job on the first two Is is is is difficult but but but but those those business models are out there all of our companies Even if they are really exciting in terms of an acquisition advantage an underwriting advantage have trouble accessing debt capital early on This is a particular problem in India and East Africa I think our Latin America lending businesses have a slightly easier time of this And it's something that we look at very very closely when we're looking at a potential investment The same way that our businesses our are trying to meet this Missing middle gap. They are themselves Missing middle businesses to some extent, you know, they are they are startups They don't have two or three years of a track record. They're not break even they don't necessarily have long Established relationships with lending instead local lending institutions. So banks ignore them those are the same way the those banks ignore Their potential customers So so when we're evaluating a new lender, we look for Extremely credible entrepreneurs That have proven in some way or another that they are going to be able they have the grit and Hopefully some of the relationships to at least access some debt capital early on in markets like India There's this kind of growing group. It's still very small but a growing group of of kind of impact oriented venture debt players Entities like IntelliGrow and IFMR It's important that our business our businesses or our potential businesses have relationships organizations like that that comes from to Maya's point earlier that comes from Making sure that our entrepreneurs frankly are sophisticated They are They they they are senior they have banking experience themselves And they can kind of get through that two to three year Challenging period once you're break-even and you're doing well. It's a totally different story and and the capital is a lot easier to access How do you Maya you might have other thoughts on that? An axion you know working with venture debt providers as co-investors to get that get that debt into into those portfolio companies Changing tack a little bit. Maybe this is a question that might be of interest to the entrepreneurs in this in this room My fellow I was invested in I think 20 22 companies over the three funds and In that process you must have evaluated at least 10 times as as many more and so What are some you know common or critical mistakes that you've seen that entrepreneurs make that might be just you know An immediate deal breaker for an investor sure Picking up on what what because was talking about management teams that are Long on vision and short on execution So what we have seen a lot is that there are some brilliant ideas out there for Different kinds of you know products and solutions and interventions that can serve a community But the individuals putting forth that vision have never run a business Don't know the market haven't come from the market can't amass resources and for us the immediate immediate Need and we learn this the hard way is that the management teams that we back have to be Excellent execution oriented entrepreneurs. We we have we are very afraid of young global leaders and People who have done lots of speaking engagements and won lots of awards because we find that means that they're spending more time on Stage and less time running their business and figuring out their business plans So it's a big no-no for us if you know, somebody has 20 accolades to their name and they're you know 27 years old usually that's a red flag I would say a second thing is authenticity about the experience of the customer It is very important for us to get an immediate sense that the management teams that we're backing have have spent Real time in the field to understand the pain points of the customers that they're trying to serve that it's not just an Ivory tower idea of how to solve poverty, but they've spent time in the rural villages or among the artisan communities or when with the urban poor and have really developed an ability to talk to and understand The challenges that are being faced by the customers that they want to serve Perhaps the last one all that I'll mention is entrepreneurs who are not Disciplined about the amount of capital that they think they need to address an issue a lot of the times We find that entrepreneurs come and they have huge fund rates Ask you know it's sort of a first-time company and they want you know $10 million to start off and they haven't really sought thought through what is a disciplined approach to capital allocation? What's the right amount of capital that I need to test out a model and prove certain milestones before I go to that next step? So we're big fans We're you invested the series a at the series B at the series C companies doing well by the series D or E we're we're getting out of the business but Raising wanting to raise too much money upfront and not being thoughtful about okay for the next 18 months I want to prove out these five sites with my product I need you know three million dollars for that as opposed to a ten million dollar ask So those are those are some big picture items Keep your accomplishments off your CV Yeah Kayleen you've been prior to indigo you spent a lot of time helping SMEs around the world race capital and a common theme that came up in our research a lot is Investors telling us that SMEs in these markets are not quote-unquote investment ready You know that could mean that they don't have formal financial records or well thought through business or strategic plans And so I'd love to hear from you from your experience What does it take for an SME manager to raise capital and I think in your case if I'm not mistaken indigo even lens? Without collateral with minimal collateral and so what gives you that comfort and what does it say? Thanks for reminding me to say that yes, we are completely Uncollateralized lending and we are finance first Meaning that you know our rates are not subsidized and it's not grant money This is real money because for us sustainable businesses are at market rate because Providing a business a subsidy just kicks the can and so they can work for a few years and then they can't suddenly and I think It's sort of a supply and demand issue what I've seen with entrepreneurs Because it's it's really easy for an American or European to go into Africa or South Asia and say they're not investment ready But a lot of it is that that entrepreneur Has humility which a lot of Americans lack and they're not just leading with these are my numbers These are my profits. This is my vision. I need money. I need debt. I need equity needs to convert This is my ROI and entrepreneurs in these emerging markets don't necessarily think of their businesses that way a lot of the smaller ones In particular don't understand debt and equity structures their family businesses They bootstrap everything and they don't understand leverage And in particular in our case a lot of the businesses that we've worked with have never had debt before And so we have to help them understand all of our lending is cash flow based lending So we have to help them understand what their cash flows do look like and that they actually can afford A loan and a loan repayment and the opportunity cost of capital of not taking that loan Is that the business stays micro or small and that leverage not over leverage But leverage can be a tool to help you build your business a lot of the entrepreneurs just don't they're looking to feed their families We're talking about businesses that are really low on Pavlov's hierarchy of needs So helping them understand how to build an empire is not something that culturally they've ever had a context for Maybe I'll ask one more question to all the panelists and then we'll open it up to the floor I think what would be interesting for entrepreneurs in this room is to try and get a sense for you know post-investment what's the type of support or or level of interaction that you have with the Enterprises that you that you invest in and so maybe you can stop with my end go this way Just provide some color on how you engage with entrepreneurs We do not have technical assistance We are members of the boards of the companies that we sit on I think one of the biggest value ads that we bring is that We have seen the evolution of a lot of companies at this point from start to finish So as outside of the board meetings we have regular sit-downs and strategy sessions with the companies where they say okay You've had five other companies who were in our shoes and what happened to them in month six What happened to them in month 12? How do you know? How did you articulate? You know the success so that they could get to their series B. So it's really a lot of strategy work It's a lot of working on Fundraising rounds the timing of them who are the best investors to bring to the table often. That's what our entrepreneurs Don't really have is a network of mainstream as well as impact investors that they can reach out to who would be the best investors for the Company and also I think having a shoulder to lean on for the management teams because this is very challenging and very hard work And we know the communities that they're trying to serve so just having those kinds of open conversations where Whenever there's something that's going wrong. We want to be the first person that they call We want our CEOs to pick up the phone and say this happened It's terrible. What do I do? And that's the kind of interaction that we have I think for us is the answers we're still kind of figuring it out Our businesses are nascent and the answer is probably we're really involved in what they're doing because we're helping them build a business And we're also still trying to figure it out a lot of our businesses need some sort of Technical assistance or business advisory for lack of a better word in terms of monitoring and evaluation and the impact metrics But also on ISO standards and becoming export ready because that opens them up to other markets Which actually helps diversify their revenue and helps make sure that we get repaid So I think we're still trying to figure out what it exactly it is that we can provide to our entrepreneurs That help them build better businesses and not just not just money, but that connective capital piece Yeah, and I talked about this a little bit before but thank you for the opportunity to talk about it again the the so we Start by sitting on boards as well Kind of helping at the board level advise on fundraising and strategy and path to scale We also try to plug our businesses many of whom are our lenders are working with lenders Into the global axion network of 60-plus microfinance institutions around the world We also have our own in-house TA TA facility and we have 22 companies in our portfolio We've done TA projects with 16 of them And and these can be projects anywhere between a couple weeks and a couple months and it's getting in and really helping on core Kind of strategic issues that management while they're probably able to do it Just don't have time to do so we've helped on things like customer segmentation on product strategy That's increasingly becoming a really fundamental part of how we even think about our investing work We we get our portfolio engagement TA team involved at the kind of in vet during the investment process to identify specific ways that we can help out as soon as we invest and then we get in there and Really kind of help help our management teams deal with these these these important issues and it's been quite helpful so far It's all in-house and and that's intentional I mean the our startups are dealing with a million things and and don't and and and if we Work the way I think a lot of the TA world works, which is Spending six months figuring out exactly what the project looks like and looking at timelines deadlines and pricing it and everything like that By the time the TA person goes and sits with the company. It's a completely different company We try to have a really nimble and and kind of responsive TA function Where we're able to identify a need and then the next week have somebody on the ground with the company helping Any questions from the audience you could just identify your name and which organization you're with sure I'm George Scharfenberger with the University of Berkeley Master of Development Practice program. My question is looking to the future about five years from now Kaleen Suggested that this is not a something special. It's really just business as business Where do you see this going five years from now in our are the products you're Providing and the way you're operating is this a transitional Solution to something else a stopgap or is this going to be a permanent fixture of these economies? Okay, so the question is where do you see these markets five years from now? Sure, I mean just from the Indra India perspective a lot of what's happening is I what I'd call the Formalization of the informal economy. So the business is especially on the financial services side That a lot of us are backing are really engaged in bringing into the formal sector lending credit history Savings and insurance products etc. So I feel like it's a bit of a cliche to say it's it's an extension of the same But the overarching trend is bringing the informal economy into into the formal landscape in my mind And that's happening in financial services. It's happening in health care. It's happening in agriculture It will happen in education as well Honestly, it's funny because we're certainly using technology to help in credit risk management and underwriting and that kind of thing But honestly, we're kicking it old-school Lending the products that we're doing. It's working capital. It's equipment lending It's super simple and so we're really kind of taking it back and that resonates with their entrepreneurs We don't come in and and preach some fancy structure to them. They get it So I think for us, we're sort of Trying to get back to the basics Hi Sorry sub mesha also a colleague of obelish is from the global impact investing network I was curious in this conversation about East Africa and South Asia That much of the South Asian dialogue is focused on India And I was curious if any of the three of you have looked at Pakistan or Bangladesh Or I guess some of the other markets in that region and if not, I guess why not? And if so maybe what's sort of preventing more more capital deployment in those countries? Sure. Yeah We we have not looked at Bangladesh closely. We've looked at some businesses in Sri Lanka and we've looked actually at Pakistan quite closely so The we actually had a consultant in partnership with CGAP on the ground in Pakistan for six months exploring the market for us what we found was that Frankly, we weren't seeing a lot of of Fundable business models and and ready to go entrepreneurs even at our stage and we're you know We're really seed stage investors There's there's a lot of interesting things happening there But the conclusion we came through was that it would be it actually might be best for us to be part of more of a kind of incubator model in Pakistan Versus Supporting kind of business models that are already there and entrepreneurs that are already really ready to manage them Yeah, sure. I'm probably one of the most pro-Pakistan people in the room I have done a lot of work in Pakistan and love it and also Sri Lanka I think for us it's a supply chain play But our lowest hanging fruit is at the end of the supply chain right now in terms of risk management So we're probably focusing on Southeast Asia a little bit more right now And then when you get to Sri Lanka and Pakistan and India We're at the at the base of the supply chain with the ag stuff and quite honestly right now There's huge regulatory hurdles for us in terms of being able to lend and get money out And also that's where you've got the stake conglomerates coming in and fixing the price of cotton and stuff like that So it's a little bit more challenging and to be honest We haven't yet found the right partner that's going to help us be able to go in and navigate that network right now Yeah, I think the challenge is that Those are the markets where really high risk capital or potentially Philanthropic or aid capital have to go because the macro political risk the lack of liquidity the challenge of getting exits Is what keeps what I'll call? Commercial return-oriented investors who who have Western LPs from going into those markets It's their phenomenal vibrant vibrant markets And they you know from a ground up are just you just want to do stuff in Pakistan because it's so awesome But it's the macro makes it very tough Yeah, hi, good morning Roland Pearson managing director from include I have pretty much the parallel question for East Africa Which is you know briefly Kenya lovely a bit of an anomaly even in East Africa Much less the rest of the continent. So I wanted to find out your view for the rest of East Africa To you know kind of get a sense of what you see the opportunities are and and perhaps Somewhat begging the question what the challenges are and how how they may be overcome I'll keep it brief, but you know a couple of the other couple of the sectors that really came up in our research agriculture came up a lot Agriculture as a share of GDP has fallen drastically across East Africa and South Asia for that matter over the last couple of decades, but agriculture remains the largest employer of People in these regions and so on the significant opportunity for productivity improvements in the agricultural Value chain was something that came up a lot in our research Off-grid energy was the other one that was highlighted a lot large segments of the population in both of these regions Do not have access to the grid And so off-grid Renewable energy solutions was something that emphasized a lot in markets such as Tanzania Uganda Rwanda, etc Sure. Yeah, well, so actually we have two investments in Tanzania. So two in Kenya two in Tanzania in East Africa I think With you know Kenya has obviously become kind of this hotbed of entrepreneurial activity in East Africa Largely because I think of M of M Pesa Tanzania with recent moves towards interoperability amongst all of the different MNOs Is essentially building a different kind of ubiquitous mobile money ecosystem, which means that there should be ultimately opportunities Of the same ilk as as what we've seen in Kenya opportunities to build more kind of cash light systems Like Copacopo Opportunities to provide additional financial services on top of mobile money like we've seen in Kenya with things like umati and first access We haven't seen a ton of new business models there yet But we're keeping our eyes open and we're really excited about that There's also other markets outside of East Africa in Africa that we're getting more and more excited about Nigeria in particular has a really exciting entrepreneurial ecosystem a Bank-led model instead of a kind of M&O led model in terms of mobile money But one that is increasingly that is gaining traction So we kind of have our eyes open in Nigeria Ghana and other parts of Africa as well Hi, I'm still Vanessa and I just wanted to follow up on the question that was asked about South Asia as well I'm actually a Bangladeshi entrepreneur I'm raising money for a health care fund right now and I have to tell you I found it fairly shocking how much easier it is to raise money for Pakistan than Bangladesh and that Certain investors that I approach actually tell me they won't invest in Bangladesh because of political risk When Pakistan is actually a failed state. So what can I do to overcome that? I can't I couldn't Sorry, my question Kiss the mic Hello, oh, sorry My question is as a Bangladesh entrepreneur trying to raise money when people tell me they won't invest in Bangladesh because of political risk How do I respond to that when Pakistan is actually a failed state? And I think it's a lot easier to raise money for Pakistan actually So the question is Entrepreneur in Bangladesh wants to raise capital but the response she gives is there's a lot of political risk in the market and so How does she get around that? Yeah My answer is simple. Look when you're looking for investors whether they're debt or equity You're looking for partners and if they don't understand the context of Bangladesh then move on Build your business and you don't need to teach them about how great Bangladesh is in the market. I Think I think the other thing you could do is Have your one-page list of here are the seven successful recent examples of You know, there there are some in the Grameen universe There there are others where where companies have been invested in and exits have happened, but realistically in our space People are pretty focused on what they're investing in and in my mandate the way my fun docs are written I can only do India so you also have to be real realistic about who are the investors out there that might do Bangladesh and You'll waste your time if you're trying to convince somebody who's not focused on the country to focus on that because it's just a We are limited and we are we're still a small group. Yeah Yes Bangladesh has a marketing challenge is what you're saying and and I think the best the best antidote to that is being loud and clear about the Successes that have come out of the country. So that when when you know when people say I you know, it's too risky So well here here here examples here live examples Hi, my name is Kalpana I'm from Delhi, India And my question is a little different. I'm actually Working I've recently become an entrepreneur looking at you speak up a bit looking at Urban safety and issues of violence against women in cities in India So I was just wondering because a lot of the I mean you talked about mostly microfinance education health Textiles and the more traditional conventional spaces of investing But what about new social problems which are coming up? Are you looking at investing in things? It's very difficult to develop a business model for us in these kind of areas But we need to and we're looking for help and there it's just not us It's not just me where there are many people who are looking at social problems such as youth unemployment You know attitudes of men in India and Pakistan and Bangladesh and violence against women creating safer urban spaces I mean the STGs have recently brought in safe and inclusive urban spaces as one of the main STGs out of the 17 so it's an area that you're looking at at all into expanding of new social problems in urban areas specifically Because the growth of urbanization is taking place in Asia and Africa So we're going to have many many more cities in these countries with huge populations Really millions of 10 15 20 million people I think the biggest challenge is not all problems can be addressed commercially and you have to draw a Very strong line between what's appropriate because if you set up a business approach to a problem That does not have a commercial end to it You're setting up for failure and so the question is may perhaps there is a hybrid model there It may not have to live squarely in the nonprofit sector, but you have to be absolutely clear that Impact investing is not you know a tool for all of all of the important social problems and you know Violations against women is a is a huge issue urban safety is a huge issue I frankly haven't seen a commercial response to it I've seen a social impact bond response to it here in the United States So perhaps that's a model that could be followed in India That's very difficult to articulate and pull together But that you know, that's probably just you know top of mind for me as a response We're past time, so thank you everyone and a big thank you to all our panelists You