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Portfolio for Impact: How OPIC assembled a collection of small, high-impact projects

In Mumbai, India, a small business supported by OPIC partner Intellegrow, prepares fresh fish for local distribution.
In Mumbai, India, a small business supported by OPIC partner Intellegrow, prepares fresh fish for local distribution.

 

In multiple African countries from Mali to Togo, small rural farmers have been able to increase food production over an extended growing season because they obtained microfinance loans to buy irrigation equipment. In India, where almost half the student population attends private schools, one company is providing loans to make these schools affordable to more low-income students. And in emerging markets around the world, where access to financial services poses severe restrictions on economic growth and wellbeing, a technology company delivers small credits to prepaid mobile phone users to support more seamless commerce and bill payment transactions.

All these businesses have received OPIC financing under OPIC’s pilot Portfolio for Impact (PI) program, launched in 2014 to focus on supporting high-impact projects that might be particularly challenged to obtain financing. Almost two years later, the success of the PI program has helped establish that small businesses can achieve a powerful positive social impact, and small amounts of financing can go a long way to supporting their mission. Earlier this year OPIC extended the PI pilot for five years and committed to financing up to $200 million in projects.

“Small players often focus on markets, regions or client groups that are being overlooked,” explains Dia Martin, director on OPIC’s social enterprise finance team and manager of the PI program. “And some of the most transformative ideas are developed by highly innovative, early stage ventures that could have a significant development impact if provided with the necessary capital and resources to reach a commercially sustainable scale. At OPIC, we challenged ourselves to support more of these smaller, highly developmental projects in a resource efficient manner.”

After committing financing to the first PI project in 2014, OPIC approved six additional commitments in 2015, all in high-impact sectors such as agriculture, education, and renewable energy. The projects committed to date include:

Microfinance lending to rural farmers in Sub-Saharan Africa. A $4.75 million loan to PAMIGA Finance S.A. will support lending to small rural farmers for investments in household water, micro-irrigation, and home solar power.

“Nanocredits” to mobile phone users worldwide. OPIC committed a $5 million loan to Tiaxa, which provides credits as small as two cents to prepaid mobile phone users who lack access to financial services to support more seamless bill payment and commerce.

Clean cookstoves throughout the developing world. OPIC committed a $4 million loan to Envirofit, which makes clean cookstoves that help reduce the indoor air pollution that results from cooking over an open fire.

Lending to small businesses in India. OPIC committed a $5 million investment guaranty to Calvert Foundation to enable it to provide a $8,000,000 loan to Intellegrow, which specializes in lending to small and medium enterprises working in India in impact sectors such as water, health, education, and clean energy.

Off-grid solar lighting worldwide. OPIC committed a $5 million loan to Greenlight Planet, which provides off-grid solar lighting systems millions of off-grid homes around the world.

Affordable education in India. OPIC committed a $5 million investment guaranty to Calvert Foundation to enable it to provide a $8,000,000 loan to Varthana, which provides financing to affordable schools in India, where almost half of all enrolled students attend private school and where millions of students are not enrolled in a school.

At OPIC, we challenged ourselves to support more of these smaller, highly developmental projects in a resource efficient manner.

Sustainable agriculture in Indonesia. OPIC committed a $3.7 million loan to Big Tree Farms, a vertically integrated agriculture company that works with coconut farmers in Indonesia to produce a variety of coconut products like coconut sweetener that generate higher profit margins and help farmers earn more income.

In each case, OPIC financing will help these projects reach more people, ultimately educating more students, producing more food, lighting more homes and giving more small businesses the tools to expand and flourish.

To learn more about OPIC’s PI program, see
Small loans, big impact
Partner spotlight: Envirofit’s scalable solution to indoor air pollution

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