 Hello everyone. We are going to go ahead and get started. My name is Lisa Hall, and I'm really pleased to be here this morning to lead this panel on Government Financing in Development. And I am still with Calvert Foundation. Some of you may have heard that I'm going to be making a transition in the coming months, but I'm here in my capacity at Calvert Foundation to be the moderator for this panel. And at Calvert Foundation, we are clear that government and impact investing is not an oxymoron, that in fact those two things do go together and that government is really important in enabling impact investing in social enterprise in many ways. And the focus of this afternoon's panel is really to talk about how the government has been innovative in supporting development finance in many ways here in the U.S., but also leveraging investment abroad through those innovations. So I'm really pleased to be joined this morning to my right by Mildred Kalir, who is Executive Vice President at the Small Enterprise Assistance Fund. And Mildred and I are colleagues as well as friends. And I can say, I might be a little biased in this, but I can say she really is one of the foremost experts on small and growing businesses and how to use successfully raise capital and then invest it in enterprises that have social impact around the world. I've also asked everybody for a fun fact and I will share with you that Mildred is so serious about sustainable agriculture that she actually is a farmer herself. And at her home, she raises sheep, she lives in a rural area of Maryland and is actually a farmer herself. She has her own sustainable ag enterprise going on at home. So I'd like to next introduce Merza, who is the president of the Aga Khan Foundation. And I've come to know him well over the last several years as a colleague in arms and impact investing. And his fun fact is actually quite impressive. Merza has been married for 30 years. And so I think that is a testament to his patience. As someone who has been married for only 13 years, I think it's a real indicator that he sees the long view in all things, not just at work. So Mark Carnes joins us from USAID, where he is a multi-sector advisor for Pakistan and Afghanistan. I think I got that full title correct. And Mark's fun fact is he started off as a hobby playing golf and learned quickly that was a very difficult endeavor. So decided to pursue the tango. And for any of you who know anything about dance, the tango is very difficult to learn. So he quickly reverted back to golf. So Richard Greenberg at the very end of the panel joins us from OPIC, overseas private investment corporation, where he is managing director for micro-enterprise and SME finance. And we've been great beneficiaries at Calvert Foundation of support from OPIC. And we've worked closely with Richard. And for any of you who know him, it will be no surprise that I did not get a fun fact. I play several instruments equally poorly. So I'm very excited to be with this quite esteemed group of impact investing and development finance professionals this morning. And we're going to start with Mildred, who's going to share a little bit about her organization and an example of the innovation in development finance that's been supported or enabled by the government. And then we're going to go right down the row and have everyone do the same. Great. Thank you so much, Lisa. And as you say, I think for those of us who have been in international development space and particularly working at the lower end of the spectrum, whether it's SMEs or micro-finance, we understand and have understood just how important the public sector is. And so for us, that has meant working with a variety of governmental institutions, many of whom have a strong investment focus, such as OPIC. And I myself spent 20 years at OPIC. So I understand this from the inside out. Just how important a partner, a governmental entity, can be when you're going into these frontier markets and trying to do some really cutting edge stuff. So CIF itself is a not-for-profit, but our role is to manage pools of capital to invest into small and medium enterprises in the emerging markets. And sometimes we do that with a traditional private equity fund, a limited life 10-year model. Sometimes we do that with financing facilities. And we have been doing it for 25 years. We're on fund number 32 at this point. We've made over 400 investments in 20-plus countries. We've returned capital. We've given returns to investors beyond the return of capital. And we found creative ways to work with various financing institutions who are involved in development. But we also have private sector investors. And we have pension funds in Columbia and Peru who have invested with us. But often it's that governmental capital that's the real catalyst to bringing that other capital in. And I'll just put up a slide here for the program that I wanted to describe a little bit to you, called Afghan Growth Finance. And this is a case where we managed to work not only with OPIC, but with also a couple of other U.S. government entities, including USAID and also USDA. We got an initial pool of grant funding that allowed us to create a permanent non-bank finance company in Afghanistan. And then we went to OPIC, and of course we hired our local team. We were on the ground making investments. We put out $30 million at this stage. People are paying back very low default rate. But we first had to capitalize the entity. We were able to do that with grant funding, which we injected as equity to create Afghan Growth Finance. And then went to OPIC to leverage that up. And so OPIC has given us credit lines. We had an initial credit line that was then expanded, now at $50 million. And on top of that, we have the ability now to participate out larger transactions with another credit facility from OPIC. And with that, we make a variety of investments across a range of sectors. So our focus is economic development. It's job creation. It's creating stable incomes, enhancing skills, and increasing the overall well-being of both workers and then the economy at large as the companies grow. So this is one example. But CIF has a long history of working with USAID, first in Central and Eastern Europe. We've worked with the Millennium Challenge Corporation to have a regional development fund in Georgia. We have another credit facility with OPIC that we were able to deploy alongside equity investments that CIF makes in other markets. And we have been in discussions with OPIC and AID about a variety of other new evolving structures to take into account some of the challenging and frontier markets that we're working in. So it's one quick example of some of the creative things that are going on. Thank you. Marisa? Great. Lisa, let me just, first of all, start by saying a little bit about the Aga Khan Development Network for those who don't know about our network. It comprises of something like 15 different institutions that take in everything from profitable organizations that look at agro-processing or airlines, hotels, banks, and has lots of nonprofit organizations that do schools and clinics, as well as a cultural arm that looks at cultural assets and preservation of historical monuments and things like that. So these 15 institutions that His Highness the Aga Khan has established over sort of decades have been doing this development work largely in Africa and Asia. About 10 or 15 years ago, His Highness the Aga Khan started to ask whether the whole development process with these institutions would be accelerated if you started to integrate the work of these institutions and coined the term multi-input area development, multiple inputs to create massive change in certain geographies. And we've got about eight geographies in Africa and Asia that we are mostly in rural areas that we are now concerned with. And so with that background, when we started to hear about impact investment in this country about four or five years ago through people like Calvert, but also Rockefeller Foundation that did a lot of the pioneering work, it sounded very familiar to us because when His Highness the Aga Khan made decisions about for-profit or for social development, he instinctively looked at the sort of complete picture of human development in those geographies. So whether it was an agriculture processing plant, he would be concerned about the prices that farmers were given in any case. When it was about school, it was about the degree to which health education was done at school. So that notion of integrating sectoral work was always there, but also this sort of what is the overall impact of the interventions that we make? So it was natural for us to come to this impact investment space. At the same time, we were also realizing that whatever resources we had to commit to development, we're obviously finite and looking for partnerships made a great deal of sense as well. And then we were fortunate enough to come across people like Mark and Richard in government agencies who were prepared to champion new ways of seeking partnerships that would augment our resources. And so the example I would just highlight very quickly is the multi-input area development in Afghanistan, which the slide sort of depicts very quickly. And it's a global development alliance with the U.S. aid, which most of you may know of. It's an alliance where private sector civil society matches the contributions from U.S. aid. And what we've been able to pull together here is a hybrid fund that we've created of $60 million. Half of it will go to social development, which is all that stuff that goes on in the green box, which we have done for decades. And it's always been time bound, because as the timeline at the bottom shows, it's a five-year program. We do our education, we do our health. And then we've always lamented the fact that these things cannot be sustained, because even though we want to do business planning in those social sectors, by inherently because it's with poor people, it is not sort of likely to be sustainable or profitable. So we wanted to create a mechanism that would allow us to sustain this in the long term, and therefore the sort of desire to create this investment vehicle, which is the top part of the chart, that looks at establishing an economic financing facility that will invest in economic drivers with our Fund for Economic Development, the Aga Khan Fund for Economic Development will own and manage that fund. But what we've agreed with them is that the portion of the profits that come out of those economic drivers, be it in hydropower stations or agro-processing or telecommunications, whatever it is that they do, whatever profits they make, a portion of those profits will go into a trust fund, because we were so concerned that we needed a fund that would enable us to sustain those social development initiatives into the long run based on our experience in many, many different parts of the world, that actually the social development work is going to be very difficult to sustain, even if you do business models, and in that green box, there will be sort of business models, particularly with the microfinance. So what we're hoping for, I mean, this has just been three months, and so it's still very early days, but we can see a lot of opportunities for connecting with investors in different parts of this sort of engine of growth, which we think it's going to be quite exciting, and look forward to talking more about it with any questions that might be there. Thank you. Mark. Thank you, Lisa. It's very nice to be here with old colleagues, Mildred from SEAF. We've worked with SEAF for many years, and we've just formed this new partnership with the Aga Khan Foundation that Mirza so ably described, and of course we work continuously with OPIC as well. Just a word about what the USAID is for those who may not know. Basically, it was an organization that was formed right after World War II to rebuild Europe. It was reorganized in 1961, and it got its current name, the US Agency for International Development. We have 100 field offices around the world. The annual budget is around $7 billion, and we work basically across all sectors, health, education, welfare, and economic growth. Economic growth is the section that I work in, and I work particularly on Afghanistan and Pakistan. Just a bit of context for those two country programs in Afghanistan. We've been there since 2001, and our annual budget in Afghanistan is going down, but it has averaged around $2 billion a year for many years. It's about slightly over $1 billion now. In Pakistan, we have a program called the Kerry Luger-Burman program, which is a five-year program, $7.5 billion, $1.5 billion per year. In both Afghanistan and in Pakistan, only a very small portion of those figures is devoted to economic growth, and economic growth is another way of saying that is private sector development. So what we have in both Afghanistan and Pakistan focused on enterprise development and increasing productivity and spurring entrepreneurship. To that end, what I'd like to talk about briefly today is our focus on investment funds in both countries. So in Pakistan, we have just signed up agreements with two existing private equity fund managers, one based in Dubai, a regional fund manager named Abraj. The other fund is called JS Management in Pakistan. We signed what we call cooperative agreements with both of these funds for $24 million each. As Mirza mentioned in his remarks, we are doing this under what we call a global development alliance. This is a mouthful of words that basically describes a public-private partnership. One of the requirements of that partnership is that the private partner to us matches or better our funds. So we have signed up these two funds in Pakistan. We have put in $24 million each. The private fund managers will put in an additional $24 million each. So right now we have two private equity funds working in Pakistan, capitalized at $48 million. And both of these fund managers are setting about to get other limited partner investors to increase the size of these funds. These funds will invest in small and medium enterprises, basically for the most part in health and health sector, education, lower level energy projects, and agribusiness. AID is a limited partner equivalent. That means that we have put in our $24 million each to both of these funds as a limited liability investment. Our funds will be co-invested with other funds that the private equity fund managers have made available in this matching I mentioned. The investment trade will be five years, followed by a five-year liquidation period, whereupon all funds will be, all of the investments will be sold off into the market for cash and money returned to the investors. So that, we call that the Pakistan Private Investment Initiative. Our development objectives are pretty simple. We want to create jobs and also we want to track additional investment into the enterprise sector. In Pakistan, only 0.04% of the GDP, the GDP is about $200 billion. Only 0.04% is formally organized in an investment fund. So our goal is to triple that to 0.12% of the GDP. Sounds like a very limited goal, but this is a pilot project for AID. It's an experiment. And again, we hope to create jobs at the SME level and also to increase investment into the sector. In Afghanistan, we have an interesting project. We have a large project that basically will start next year. We call it Promote. This is a project to basically advance the status of women in Afghanistan. The section that I'm working in is essentially on the economic growth side. We are exploring the establishment of a private equity fund in Afghanistan that will be capitalized by a $75 million amount that will be used to provide scholarships to Afghan women across a range of sectors. But we're going to be focusing mainly on entrepreneurs, business owner managers, or women that are working with firms that have ideas. Again, we want to foster the entrepreneurial spirit and then fund that. So we're looking at setting up a private equity fund in Afghanistan to manage this money. We're hoping to do it as a public-private partnership as we have with the Aga Khan Foundation. And this will provide scholarships hopefully to 10 to 30,000 Afghan women over the next five years. The final fund that we have is what we call a Clean Energy Fund for India. Basically what we're doing there is we put up a $3 million fund to guarantee debt from a wide range of debt investors. The $3 million from AID will basically leverage $100 million from debt investors that will be transformed into energy investments in the clean energy sector in India. If you know anything about India, you know that their energy sector is in huge deficit and both from carbon forms of fuel to non-carbon forms of fuel, they need investment in all areas of energy support. So we're looking at wind farms, solar farms, bio farms. And what AID will be doing is basically mobilizing this additional $100 million from debt from all sources. It's an open-tent design. We're bringing in debt from all sources that will be subsequently invested in clean energy. So those are the three types of funds we have in both India, Pakistan, and Afghanistan. And of course we are very happy to have just recently signed up our partnership agreement with the Aga Khan Foundation, where we are providing the bulk of the initial funding to provide social investments, while the Aga Khan Foundation sets up basically the investment fund structure to pursue robust investments as economic drivers, which eventually will throw off cash to finance those social investments. So that's basically a summary of where I'm at. Be happy to field any questions subsequently. Thank you. Richard? Thank you, Lisa. It's a pleasure to be here. I want to mention up front that my colleague Mitchell Strauss, who's ahead of our impact investing initiatives, was originally scheduled to speak on this panel, but unfortunately couldn't make it. Some of you may know Mitchell, but she's been a real pioneer for us and a path breaker in this impact investing area for several years already. I won't spend a lot of time explaining what OPIC is. I think probably most of you have basic understanding, but OPIC is a U.S. government agency. It was formed in 1970, and our purpose is to promote private sector investment for the purpose of promoting development in developing countries and emerging markets. OPIC is the U.S. government's development finance institution, and we operate in 140 countries. We have projects ranging from several hundred million dollars in financing for infrastructure to very small transactions of a million or two million dollars. And in addition to providing financing, we also provide political risk insurance. We have about 200 employees all based in Washington, so our business model is an interesting one because operating in this many countries with this many types of projects and sectors sometimes makes our heads spin a little bit, but I think we've managed to to do some worthwhile things. I wanted to note that OPIC in the impact investing arena is trying to be a leader and trying to be proactive in this space. And initially or throughout OPIC's history, we have made investments that nobody was calling impact investments, but that could be classified as such. But of course, now that there's a more definition around that and an effort among many different players to rally around some specific ideas, we've been trying to participate in that. And only I'd say in the last five to seven years have we now embraced that and actively started to work with organizations, both for profit and also nonprofits to participate in that arena. And I think I would just in a couple of minutes just like to highlight a few ways that we're trying to do that. A couple of years ago, we launched a call for proposals for impact funds, impact finance funds. So this is a way for us to receive from the market proposals from all kinds of fund managers who would then have the opportunity to receive an OPIC commitment of debt financing, which could help them then raise capital from private sector investors or other DFI's potentially to bring a pool of capital together and make private equity investments in that space. And we approved a number of proposals, some of them have raised funds, some of them are having difficulty doing that, given the market conditions. But that was an important initiative for us. A second thing that we're doing is trying to facilitate support for small growing businesses, some of the kinds of companies maybe that Mildred's been working with for many years. We understand that on the one hand institutionally, we probably are not going to be most effective and efficient in doing a lot of one and two and three million dollar deals just because of the nature of our setup and so on. And for the most part, we'd like to identify intermediaries, fund managers, people like SEAF and others who can take our capital and then put it to good use under good management while meeting our objectives as well in terms of policies and credit criteria. But we also are looking to build a pipeline of our own to continue to finance some of these smaller deals. On the one hand, that's an expertise that we've had and developed over, you know, decades. And also there aren't that many intermediaries out there right now to actually fund some of these kinds of projects. A big area of deal flow for us in that regard is in India where there's so much potential in health and education and agriculture, and yet a real dearth of SME financing across the board. And so we're talking to impact investors who have been coming to us and asking us if we might be able to participate in providing even smaller amounts of debt financing to help bridge some of those businesses to the degree where they can get some scale and then attract some commercial capital. And another thing that we're going to be doing is in addition to trying to support private equity funds, which we've been doing for a number of years by putting some leverage on those funds, we want to be able to accommodate other kinds of funds, whether they be smaller equity funds that generally don't fit with that program, or debt funds, debt and equity funds, any number of combinations, that again institutionally we have been able to consider but not in a really systematic way that's been that we want to going forward. In the microfinance world that I've been working in for a number of years, we have supported a lot of microfinance funds and networks by providing capital, which they then use to invest in microfinance institutions. You know, that type of model could be replicated in the impact space. Obviously, there are very big differences in terms of credit profiles and how assets would be put together. But this is another important step, I think, for us to take. And just in a couple of days that I've been here at Socap, I can see how that would be a product that would be valuable and important to this market that's trying to link deals in the impact space with sources of financing. It's just one piece of the solution. And at the end of the day, we're only going to be effective in working with partners like the Aga Khan Foundation, with USAID, with Steve Calvert. That's at the end of the day what we need to be focused on. But we're trying to be proactive and develop products that meet the demand in the market. Thank you. Those were great overviews. And I want to encourage a dialogue with the panel and also to bring it back to the theme of the conference, Accelerating the Good Economy. And so I know, Merza, that you have given a lot of thought to the connection between investment and project finance and development finance and what that means for communities on the ground. And I'm hoping you can speak a little bit about that relationship, which in the past, I think the US has focused much more on aid as a way to deliver social good throughout the world. And part of what we're talking about at this conference is really how do you invest for good? And so could you talk a little bit about that relationship? Yes, I think, and I'll use the diagram again, I could talk about other parts of what the Agra Card Network does. I mean, as a philosophy, wherever we work in whatever sector, it's always very much bottom up and listening to people and empowering people. But I think this diagram and the sort of way in which you want to create the investment vehicle is very much about connecting on economic drivers, which are meaningful for the particular region in which we are operating to undertake agro processing or electrification programs that first and foremost have a local impact in the local economy. To the extent that we are able to do that, we very much want to do that, but we are not going in blindly to think to ourselves that's the end all of everything. What we want to make sure is that we do generate profits. So there is a little bit of a tension, to be honest, between those people who want to do community-orientated programs and those who really say, well, actually we've got to make the profit in order to serve the community. And I think that where we marry those two sort of dilemmas is within that trust fund, which is going to be very much governed by the communities themselves as to what they want in the future. So in a way what we've created is a perpetual mechanism of using USA dollars now to create long-term resources for these communities. And if our projections are correct and profitability goes in the direction we want it to go, we see a really huge resource base for these communities to be able to sustain their own development. I think that's the other sort of principle upon which we do our work, which is that we stay for the long term and that the institutions that we will build as a result or the companies that we build as a result of these investments are there for the very long term. So and the final point I would make in order to address the point about how do you connect with the community is that each of those companies that are going to be supported out of that impact investment fund where you know we will have other investors coming in also. We want those companies to be a lot more orientated towards almost an inherent corporate social responsibility dimension. Not from the point of view of saying well you do a great big mine and then you put up a school and you pack yourself on the back. What we are doing with investors if you're saying upfront if you want to engage with us we want to understand what part of your profits you are prepared to forego in order so that the community develops as part and parcel of your business. And I think that's creating a fascinating conversation. It's not without controversy as you can imagine but I think that for this community if they're interested in impact investment it's precisely the conversation that we need to have. Lisa I have something else I might add in that respect. We've also had a history of taking USAID grant funding and making sure that it's not a one-time disbursement that doesn't come back and so you know starting back you know 20 plus years ago we had grants from USAID in the central and eastern European context where they became the catalytic funding to develop SME funds and so aid grant money went in as equity capital into these funds and much as Mirza is describing when those funds were successful in investing and exiting those flows came back and we sat down with USAID at that point and said what is the most productive use of this money. Now at that point in time perhaps some of the aid folks were not as far thinking as the ones you're dealing with today sitting up here Mirza and their their basic point was well you know this was already a 10-year program we'd really not like to have administrative responsibilities for another 10 years could you perhaps find another way to use that money going forward rather than investing in improprietuity and so what we agreed with them is that is we had made many many SME investments one of the common concerns was the lack of capacity within those enterprises they needed they didn't have management depth and they needed you know to build skills in a variety of capacities and so we agreed with USAID then to start use that capital that was coming back to start centers for entrepreneurship and executive development and and today we're in 14 countries where we have teams on the ground doing a variety of mentoring network learning entrepreneurs teaching each other you know connecting them to markets connecting them to sources of capital and we have created this kind of sustaining institution because now they have a revenue model that will you know hopefully then you know enable these individual centers to continue on in the future and to to grow as a broader network and to link up with other like network so I think it's another example of how you can take donor or charitable contributions use an investment approach and serve multiple objectives at the end of the day and I think it's an excellent way for people who have been involved in philanthropy to make that transition and also not to get caught up in the idea that the goal is to to maximize the financial return I mean as Mirza is pointing out you don't have to to maximize the financial return in order to assure a sustainable flow of funds to do good things in the future so this is a related question for Mark and Richard this administration has been very focused on economic development being part of diplomacy and I like your thoughts on how is that made practical and real on the ground in terms of your programs at each of the the agencies that you represent and also do you think that that's an issue that will persist or a philosophy that will persist beyond this administration is that something that's really bipartisan I can start off on that let me just say that I'd like my comments really build upon what Mildred and Mirza said we share USAID shares all of their all of their philosophies shall I say in Afghanistan and Pakistan very specifically we are pursuing impact investments again in Afghanistan to promote the cause of women specifically we want women to become more educated in Afghanistan we're focusing on university education to help women become enter the professional sphere to enter the the economy in meaningful ways especially we want women to we want to support women who have entrepreneurial spirit and require money for startups so the we're talking about a 75 million dollar investment fund in Afghanistan which essentially promotes women and this is an administration initiative in fact I was working with one of Hillary Clinton's best friends a woman named Milan Verveer she was the ambassador at large for women in development around the world and basically the idea there was after after much conversation we settled upon this idea of promoting scholarships university scholarships for women so the idea is that this fund will be much as we're doing with the aga con foundation in Afghanistan this this 75 million dollar fund will invest in Afghanistan and the surrounding region to throw off cash which will then support the the scholarships so the idea is that this fund will not be a one-off deal whereby over time the 75 million depletes and becomes goes down to zero we're hoping that there will be very little capital impairment and that the investments that that are made by this fund will actually again generate sufficient profits to fund the scholarships in the case of pakistan i mentioned the the fund the fund concept we have there it's called the pakistan private investment initiative basically we're looking at financing small and medium enterprises that work in the health sector the education sector the off-grid power generation sector and the agribusiness sector firms in those particular sectors basically by their very nature by their very nature of their operations they undertake impact operations so again again in afghanis in pakistan we are focused on our investment funds achieving high profitability while investing in those sectors and serendipitously in in pakistan this appears to be the case that we can pull off this dilemma between social investing versus not quite commercial rate of return investing so we're we're hopeful that that that this will work out as i mentioned before this is a pilot project and an experiment but again this is another initiative of the of the of the administration in africa we are basically right now working to replicate the pakistan investment initiative design in south sudan and in haydee and in south africa and perhaps in uh kenya again the idea there will be to work with small and medium enterprises working in sectors that benefit and that impact on larger segments of the population in various communities thank you richard do you uh i'm sure um i would dare not attempt to predict which way the political winds will blow in terms of administration's policy and such but i don't think there is hardly much disagreement i would in my view around the notion that economic diplomacy if you will is really has to be fundamental part of uh you know our strategy and and opic specifically you know is is a part of that in that and um mark's been referring to afghanistan and pakistan we are also making efforts in participating as as referred to by mildern and the afghan finance company uh to to find transactions to work with companies to promote investment in in those countries in other um conflict or post-conflict countries we've been um very uh uh proactive in working in the middle east in in in the wake of the arab spring and trying to bring capital to facilities that can make loans to to sms in places like jordan and egypt and tunisia so this is fundamentally important to to the administration and opic has some tools that we can use to to help uh address some of those issues and then just otherwise of course in all parts of the world and developing world in particular i think you know investment private investment and economic development is is going to be the driver for political success in democracy so i have just one last question before we open it up to the audience because i'm sure there are questions um out there that you would like to address to the panelists uh and and it's about the role of government in measuring social impact and tracking and monitoring the outcomes you know we hear a lot of talk about impact investing and metrics and measurement and so do you have thoughts as panelists and i'll open this up to anyone who wants to respond um about how the government can help enable better measurement of social outcomes i can start and i'm sure everyone's got a view on this i mean i think all of us in this space understand the importance of that um you know this is something that that that cp has been uh doing for you know more than a really for our entire history in terms of some of the metrics and i think within the last uh ten years we've become much more uh engaged in the global efforts that are going on to to set these uh you know common taxonomies and with the iris system and so on and and have you know allowed the teams working on that to pick our brains in terms of the experience that we've had and you know how do you measure a job and you know seasonal versus part-time and all of those very technical aspects but then i think at the end of the day you know when this data is gathered and and it's out there you know all it's incumbent on all of us to make sure that decisions actually um flow from that and that those those metrics the non-financial metrics really become a critical part of that decision-making process about whether to do a particular uh type of intervention and i think we're still getting there because i think you know richard can speak to this and probably mark as well um you know the when you take what has been a donor or philanthropic model and put it into an investment framework suddenly um you know the people whose job it is to worry about credit risk or you know general risk come out of the woodwork in great numbers who never were interested in the philanthropic activities before but now that it's been put into an investment frame um everything is about the risk and not taking into account necessarily all of these non-financial metrics so i think you know you all can speak to how that gets managed internally but i think it's a real challenge in this space there's some really creative cutting-edge things going on but internally within the various organizations who've been used to a grant approach once you put that investment frame on it a whole set of new issues arises and we have to all jointly figure out how do we work together because ultimately a grant is a hundred percent risk if you're using an investment approach you're mitigating risk in my view but i don't think that's necessarily the way that the credit risk people look at it and all i would say in terms of government's role in sort of measuring things in many of the countries where we operate the capacity of government is such that it's an aspiration i mean i think we've embraced the idea that governments ought to be much more responsible of you know development in their own communities and ought to measure the the variety of things that would give us a sense of where things are going i mean i think in some countries like Pakistan and Kenya there's a strong movement i mean there are institutions actually that we don't use often enough called government statistical offices that do collect data on things like educational attainment rates or at least enrollment rates immunization rates maternal child mortality rates they're also organizations like the world bank and unicef and others that do that so there is there is data available for you to be able to get a sense at least of the you know to travel of direction in terms of what you're doing in the areas that you're working in but at the aga car network we've got a step further in these sort of five or eight geographies when we created a sort of a our own quality of life measurement that has sort of 12 indicators ranging from health and education to voice and accountability and income levels that gives a sense of what is happening in those geographies and because we've got the luxury of his highness's support we are able to do a longitudinal study and to ensure that these data are collected every other year so we're able to sort of say you know what has happened i mean the point that i would say on measurement of course is that attribution is always going to be a problem but at least you know where what changes are taking place so but it's a very very important point that we are to do more from the USAID standpoint i would say that as mildred mentioned i believe there's this inherent tension between investing and then doing social development there is a rate of return expectation for investing and this is what actually mitigates the risk as she said there is a hundred percent risk when you give a grant because the grant is gone and you sign it over to the recipient or as an investing you retain some measure of control i would say that overall in pakistan for example we're taking the long view in terms of metrics what we measure and what are the the outcomes that we're expecting you may recall i mentioned that our two development objectives for our pakistan funds are creating jobs and increasing are attracting more investment into the private equity sphere in pakistan so the question is well how do you do that well basically what we're going to do is we're going to sign nondisclosure agreements with our fund managers which will give us access to balance sheets cash flow statements and profit and loss statements both at the fund level and in their end of their investees the companies that they invest in and then at the company level we're going to track both the backward and forward linkages the firms that they deal with to actually quantify jobs created the wage bill that is generated the returns to capital at the fund level we're going to quantify all of these these figures from actual balance sheet information that eventually will be audited audited and number it's we're going to publish a paper once the term of the nondisclosure agreement is over we're going to track all this we're actually going to quantify the the the quantify the i was going to say quantify the metrics which is the duplication but we're using quantified information to actually show that we're making movement toward our development objectives uh that's a great question uh lisa first thing i just want to make clear is from opix point of view there needs to be there are credit standards and we're a development bank we're a self-sustaining organization we have to return capital every year to the treasury and show that we we can sustain ourselves so there are credit standards that have to be met if a project came in that you know was going to change the world in fundamental ways but it wasn't going to pay us back then we would have to turn to somebody else to try to to support that project um the impact measurement piece of course is critically important to all of this we're we're really trying to embrace and interact with all the different players in that i mean i think there's a lot of debate and it's useful around how that should be approached let a thousand flowers bloom and have all kinds of different ways of looking at it or have a standard and and i think there's room sort of for both and some in between at the end of the day i i believe that there's it's important to try to develop certain standards in order to tap into the institutional investing market and it's really you know build to scale if that's what people think is is the right way to go to have access to capital for for impact investing because you know i think without that it's it's going to be difficult to to attract that capital what i've heard from some others during the conference here is that from the standpoint of the family offices and you all probably have experience with some of this maybe they're a little bit less demanding and they can live with a good story to tell about that this will create impact and this is how we're going to measure it but not so much for the institutional investors and so if those those are those parties are going to be brought into the sector i think the initiatives around creating certain standards from my point of view are very important can i just make a plea very quickly of the audience and everybody else is that what i'm sort of noticing and i don't know whether this resonates with others is that because financial matrices are easier to calculate there is a debate there is a leaning towards those matrices then the social development matrices and i worry that impact investment has become more investment than impact and i think it's just natural even in our own organization rates of return are very easy to calculate what is the rate of return and are we going to make a profit but you know when he says well our children are going to learn better at schools who are they going to be better citizens oh my god you know so and and because it's it's that sort of reaction we sort of tend to say well you know we just let's talk about how many kids go to school right and i think that's that's my plea that clever people out there ought to spend some time on is there a way of measuring this and as some of my colleagues were saying the other day you know the financial industry has invested huge amounts of money over decades to create things like accounting standards but we don't have similar social development standards and you know it'd be great if in the next decade something emerges i know people are working at it but i thought i would just say that yeah that's that's great so are there questions in the audience i see one back there oh there's one here and then we'll get to you at the back hi thanks a lot i was a fascinating talk my name is on ramon i'm i used to be with the acumen fund to run the pakistan office first of all i just want to comment on mirza's point which i completely agree with as as impact investors there's always that pressure because we can we can measure the the finance side more than the impact side and that that is really a challenge for the industry my question is for mark it's wonderful to see that you've you've launched these two funds and partnered with two very respected funds in in in pakistan what is your expectations on on financial returns and exits and then what's what kind of entrepreneurs would you be looking to work with in terms of the sophistication of those enterprises given the objectives of the funds well with respect to rates of return as i mentioned before the one of the two development objectives we have for pakistan is to attract additional institutional investment or angel investment into the country to work to invest in the enterprise sector so if we really are serious about that that means that we have to pursue high returns high commercial returns by our investment funds again this is this this particular design that we did again it's a pilot project experiment for us but it's very pakistan centric pakistan has a very low amount of institutional investment going into the enterprise sector so our goal is to attract more investment to do that we have to show that these investment funds that we have catalyzed in a way we're bringing in money from the sidelines this money was not invest was was not planning to be invested in pakistan we came in as a first mover and then we basically brought in this additional money from the general partners that we signed agreements with so again our one of one of our two objectives is to attract additional investment so we want our funds to show profits and we want them to show returns to their investors we want the investors to get their money back and we want the investors to have a rate of return that satisfies their hurdle rates with respect to the the impact side of it as i mentioned before we the funds uh serendipitously we we we competitively selected these fund managers and so we didn't tell them we want you to invest in sector x y or z but serendipitously they basically came in with proposals that said we're going to focus on private education we're going to focus on non-grid energy we're going to focus on agribusiness and we're going to focus on the health sector so looking at the types of investments that these funds would make they will have tremendous impacts across the society they're going to be investing in health clinics hospitals are going to be investing in all sorts of agribusiness uh concepts throughout the value chain throughout various value chains in the education sector in pakistan there's a big movement to uh to invest in what we would call charter schools in the u.s private schools huge demand for that serving both the lower economic and the middle economic classes in pakistan so there's a tremendous impact to be made while at the same time these funds come up with attractive returns that we hope will attract additional institutional investment into the space thank you the question back here hi julian zimmerman with vodia ventures um thank you for touching on so many facets in such a short time you you've all talked about the tensions between um grant making and and profit making and community and business and all of the rest and i'm i'm curious about one particular area you did not touch on and i really love to hear your thoughts on how are you thinking currently about developing the capacity of community or municipal um services like potable water for example which are not typically part of the education health energy uh entrepreneurship kinds of focus areas but which are nonetheless foundational to all of them thank you so richard i could just start by mentioning thanks for the question uh there are business models out there you may be well aware of to supply clean water for example and i've been working specifically on a transaction with a company called e-healthpoint in india which has set up kiosks across villages in punjab and is going to be expanding to other states to supply water clean water at a monthly fee which is very attractive as a tremendous demand for and you know the the the just the access to clean water is important the health benefits there are a number of benefits and also they view that as a as a as a kind of community uh vehicle for providing other services in fact their model includes providing you know health kinds of services as well but there are different economics associated with the water and sort of the health types of services so they set up the health as kind of a foundation for the time being in the water is is a business model that can be sustainable that we could underwrite and provide financing to it so that's that's just one particular example i'm sure you know sure there are many many but we'd be looking for more opportunities in that nature yeah i mean i i do think that that's one of the remarkable um aspects of this work that we're doing accelerating a good economy is that almost almost not all but almost all all social challenges and issues have solutions that can be based around a business model or economic model and we were also an investor at calbert foundation in e-help uh point and uh it is a very viable model and so i think whether it's potable water whether it's energy access for the poor um that there are many solutions using business tools and economic models um to get at the heart of those matters as well as education and health which we've talked a lot about today other questions there's one here is the mic already someplace else thank you um i have a question uh just generally you know um you mentioned about the government statistics office and all the data that's available but for my experience that a big barrier is just general information about investment and benchmarking opportunities i'm wondering what government initiatives are out there to help build the information access for the public around development financing i mean i can answer that as a as a old uh diffid person i used to work for the british government's department for international development and we did quite a lot of projects with governments to try i mean in central asia where i was working uh in kyrgyzstan and tajikistan to get the government statistical office not only to collect the data which they love doing as former servic republics but they actually make that more available through websites and things like that um but it is a challenge i think the other thing i would say about government statistical offices is that their information gets politicized very quickly in many different countries and um you know if they're if the government is finding out information that he doesn't want to share or doesn't like then the reports simply don't get published so there is a challenge there is a challenge out there but i think there are a wealth of information and i think those people that have you know the sort of aptitude and desire to understand i mean country like india good god they collect all sorts of things um but it you know it's that who's who's going to be there to do the analysis and and and uh and understand them better but it is it is uh it is a wealth of information yeah and i think that there is an opportunity out there um i was in a meeting yesterday actually with jim price who just joined us who's the new new CEO and president at calbert foundation where they were talking about the ga panel that's being pulled together coming out of the leadership of the uk and and prime minister cameron and i think there is an opportunity with this new panel that's being created on impact investing to offer up ideas and thinking and problem solving and and one of the issues that came up in yesterday's conversation was how do we get the government to coordinate so that the same data that usa id is asking for matches the data that opic is asking for that's that's being asked for across agencies and so there may be a real live opportunity to propose some type of cross agency or multi agency collaboration around data collection other questions we have probably time for just one last one or we can end early up one last one over here thank you my name is benji williams i'm with amal academy a startup education venture in pakistan and i had a question uh for uh mark extending on on's question about sort of um essentially the type of support that you're providing to entrepreneurs and i was curious about your vision for how the impact investment fund would collaborate with the grant funding that you're providing and what type of opportunities there are for entrepreneurs who are getting set up in pakistan what type of tension do you see if any between the impact investing in the grants that you provide through the small grant program and the ambassador fund program in pakistan thank you well i would say in in pakistan or this pakistan private investment initiative is first of all it's not directly aimed at entrepreneurs with a good idea or a great idea where the funds are aimed at second stage third stage investing so there the funds will be in looking at companies that are already up and running that are going concerns but have plans for expansion or other plans to expand their business to enter new markets to do new things for which they need funding and time so we're we're not directly supporting entrepreneurs in the sense that somebody comes in the door with an idea so it's not that it's complementary to other programs we have in pakistan i mentioned in my opening remarks the the annual program in pakistan is 1.5 billion dollars which is a huge amount of money the lion's share of that by the way goes to the energy and water sectors in response to the other question that was made earlier but we do have small programs that provide technical assistance to entrepreneurs we had a program that is just recently ended that's that provided support to women entrepreneurs these are basically micro and small enterprises we hope to do some of that in the future so we have other programs that are doing the types of of investing impact investing that i think you're you're you're referring to the program that i'm mentioning is a little bit different because it's aiming aimed at a higher size bracket of the sme space and again the development objectives are to create jobs and to attract more investment into the country for the enterprise sector this program then is complementary to other programs that are currently ongoing one program that we have is a small technical assistance facility it's already an existing project that we redirected to these two investment funds that we signed up basically if the investment fund puts up half of the money for a technical assistance activity we will match their their funds and that will provide technical assistance mainly to their potential investors so again our program is slightly different from what i think you were referring to but we have a range of programs that work at the lower levels in terms of size that that work with entrepreneurs mainly women so i want to thank the panel this has been a robust discussion i i was joking with someone earlier that uh this the government finance and and government and development finances maybe not the most exciting topic on the agenda uh but i think it's a very useful set of information that our panelists have provided today uh that hopefully can enable the audience to go out and accelerate the good economy thank you for coming and uh if you would join me in a round of applause for our panelists