Annual Aspen Network Of Development Entrepreneurs

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ENGINES OF
PROSPERITY
02 Engines of Prosperity
CONTENTS
ANDE Impact Report 2012 03
Introduction ................................ 07
State of the Sector ...................... 13
Three Areas for Action ............... 18
ANDE in 2012 .............................. 25
Appendices ................................. 31
Endnotes ..................................... 37
04 Engines of Prosperity
ANDE Impact Report 2012 05
Dear ANDE Friends and Colleagues,
I am pleased to present the fourth annual
Aspen Network of Development Entrepreneurs
(ANDE) Impact Report. ANDE members
are united in the belief that supporting small
and growing businesses in emerging markets
can create lasting, positive change. By the end
of 2012, more than 170 ANDE members had
collectively supported tens of thousands of
small business entrepreneurs in more than
150 countries. ANDE exists to strengthen
this work and to promote entrepreneurship
as a mechanism for prosperity creation in
developing countries.
In 2012, ANDE redoubled our commitment to
supporting our members in emerging markets.
We know that we cannot build a movement
from our headquarters in Washington, DC; it
is the innovative work that ANDE members do
on the ground that will build momentum for
small business entrepreneurship. Our regional
chapters are at the core of ANDE’s mission.
Over the past year, we hired four regional
chapter coordinators based in Brazil, Central
America/Mexico, East Africa, and South
Africa to facilitate stronger collaborations
on the ground in those regions. Our members
launched the West Africa chapter, and the India
chapter continued to strengthen.
2012 also was a year of expanded emphasis on
research. ANDE believes strongly in building
a robust evidence base to demonstrate the
impact of small and growing businesses, and
in ?nding the most efective ways to support
them. Our research in 2012 spanned a range of
topics, including funding impact evaluations,
mapping the landscape of accelerator programs,
and collecting IRIS-aligned social and
environmental performance indicators. We
invested in expanding the breadth and depth of
data on the sector to generate new insights. We
are excited to share initial ?ndings in this report.
Throughout this report we have highlighted
examples of the work that our members
have done in the past year. These stories of
collaboration represent a small fraction of
the exciting initiatives that ANDE members
undertook in 2012. We are pleased to have seen
the growth in our sector, with an ever increasing
number of actors joining the movement to
support small and growing businesses. We are
con?dent that this trend will continue as ANDE
enters its ?fth year.
Sincerely,
Randall Kempner
Executive Director
Aspen Network of Development Entrepreneurs
(ANDE)
06 Engines of Prosperity
INTRODUCTION
ANDE Impact Report 2012 07
The Aspen Network of Development Entrepreneurs (ANDE)
is a global network of organizations that propel entrepreneurship
in emerging markets. Our members provide critical ?nancial,
educational, and business support services to small and growing
businesses (SGBs) based on the conviction that SGBs will
create jobs, stimulate long-term economic growth, and produce
environmental and social bene?ts. Ultimately, we believe that
SGBs can help lift developing countries out of poverty.
Small and growing businesses have the potential to make large-
scale, sustainable change in their communities, but they face
significant challenges. SGBs often contend with a lack of three
key elements—human capital, financial capital, and market
access—that constrain their growth. ANDE was founded on
the premise that organizations must collaborate to help SGBs
reach their full potential and grow the entire ecosystem of
support for entrepreneurs.
Growth of a Movement
The ANDE concept is catching on. ANDE launched in 2009
with 34 members. At the end of 2012, ANDE had more than 170
active members working in every emerging market in the world
and supporting tens of thousands of small business entrepreneurs.
ANDE members include investment funds, capacity development
providers, research and academic institutions, philanthropic
foundations, development ?nance institutions, and corporations.
This diverse group of ANDE members provides a range of support
services to help small businesses grow and prosper. To date,
ANDE members have worked with more than 60,000 SGBs.
Since 2009, 40 members have directly invested approximately
$1.7 billion and 41 capacity development providers have leveraged
$400 million to provide services to SGBs. In 2012 alone, ANDE’s
14 foundation members disbursed $27 million in program-related
investments (PRIs) into investment funds and $102 million in
grants to the broader SGB ecosystem.
This 2012 Impact Report surveys the landscape of support
that has become available to small and growing businesses in
recent years. As recognition has grown that SGBs are a key to
prosperity in emerging markets, so has the amount of ?nancial
capital and non?nancial support available to them. ANDE
members play a key role in this ecosystem and the following
pages highlight their work.
“ANDE gives us a network of counterparts who are facing…
similar challenges in both running their organizations as well
as investing in and supporting SGBs in emerging markets.
Our meetings and working groups give us an opportunity to
brainstorm and problem solve on multiple levels at the same
time that we can keep abreast of developments in the industry.”
—Mildred Callear, Small Enterprise Assistance Funds (SEAF)
Small and Growing Businesses
ANDE de?nes small and growing businesses as
commercially viable businesses with ?ve to 250
employees that have signi?cant potential, and ambition,
for growth. Typically, SGBs seek growth capital from
$20,000 to $2 million. SGBs differ from the more
traditional characterization of small and medium
enterprises (SMEs) in two fundamental ways. First,
SGBs are different from livelihood-sustaining small
businesses, which start small and are designed to stay
that way. Second, unlike many medium-sized companies,
SGBs often lack access to the ?nancial and knowledge
resources required for growth.
Snapshot of the Sector 2012
SGB SECTOR
? 25 SGB funds launched in 2012; average target fund
size was $51 million.
? 30 SGB funds reached a ?rst close, having raised $413
million total in committed capital.
ANDE MEMBERS
? 171 members operated in more than 150 countries.
? 32 member-managed funds invested $229 million.
? 40 members provided $95 million in capacity
development services to over 13,000 SGBs.
? 14 foundation members disbursed $129 million to the
SGB ecosystem.
Drives Growth
Promotes Equity
They create jobs, and
have a multiplier effect
on the local economy.
They create inclusive economies, and provide goods
and services that bene?t all sectors of society.
Drives Sustainability & Innovation
They strengthen supply chains, reaching the last mile in remote
communities, spreading environmental and agricultural best practices.
MICROENTERPRISE SGBS LARGE FIRM
Everybody Bene?ts
Investments in SGBs can realize ?nancial returns and substantial “ripple effects” to a variety of stakeholders:
The Power of Small and
Growing Businesses
Typically, SGBs seek growth capital from $20,000 to 2 million, which positions them as too large for micro?nance loans and too
small for traditional private equity.
Investing In SGBs
Employees
Through wage increases,
non-salary bene?ts and labor
mobility through training
Customers
Through improved quality
and/or lower price of
goods and services
Suppliers
Through increased
demand for and
sales of goods
Government
Through value-added
tax revenues
Broader community
Through environmental
gains, development of
social infrastructure, etc.
08 Engines of Prosperity
ANDE Impact Report 2012 09
Why Small and
Growing Businesses?
While there are many worthy approaches to economic development,
ANDE members support small and growing businesses because we
believe SGBs represent the most efective way to create the kinds of
jobs that can lift families, and ultimately entire nations, out of poverty.
SGBs also provide critical goods and services to the poor, drive
innovation, and strengthen international supply chains. In essence,
SGBs are an engine for prosperity in the developing world.
Growing Jobs for the Poor
In the developing world, the majority of people do not have a formal
job with a steady paycheck. For example, “non-wage work,” or
income generated through self-employment or farming, is how 80
percent of women in sub-Saharan Africa earn their living.
1
However,
research shows that formal jobs allow people to earn more income for
themselves and their families.
2

The relationship between economic growth and poverty reduction
is complex. Not all economic growth creates jobs, and not all
employment moves people out of poverty. The phenomenon of
“jobless growth”
3
has been characteristic of many countries in Africa,
4

South Asia,
5
and Latin America .
6
Additionally, the International
Labour Organisation (ILO) estimates that around 40 percent of
workers who do have a job are still poor, with low-paid, insecure jobs
that ofer little upward mobility.
7

Becasue of this complexity, the creation of stable, quality jobs for the
poor remains a huge challenge for policy-makers and practitioners.
The ILO estimates current unemployment at about 200 million
worldwide, and it projects the need for 600 million new jobs over the
next decade.
8
Small and growing businesses represent one of the most
promising ways to create these jobs. Companies with 10 to 50 workers
typically ofer a wage premium of 10 percent to 30 percent more
than microenterprises. As the number of employees increases, so do
wages: Companies with more than 50 workers typically ofer a wage
premium of 20 percent to 50 percent more than microenterprises.
9
In developing countries, most people with formal jobs work at a small
or medium enterprise. Those jobs represent 66 percent of full-time,
permanent employment on average.
10
This is not surprising, as there
are fewer opportunities to work at large ?rms in low- and middle-
income economies as there are in high-income economies. For
example, the United States houses 104 large ?rms per million people
compared with 27 large ?rms per million people in Brazil.
11
This gap
represents a potential avenue for new employment generation: a small
business that becomes large creates 200 jobs on average.
12
ANDE
believes that those small ?rms with the potential to grow are critical to
long-term job creation in developing economies.
Barriers to Growth
While SGBs represent an effective avenue to job creation,
they are constrained in many emerging markets. In many of
these countries, ?rms start small and stay small compared
with businesses in developed countries such as the United
States. The World Bank’s Enterprise Survey asks ?rms
what they see as their biggest obstacle; the most common
responses include access to ?nance and reliable electricity
(Table 1). ANDE asked our members what they see as the
biggest challenge that SGBs face, and the two biggest
challenges identi?ed were access to ?nance and access
to human capital.
13
But there was considerable variation
across countries; these differences highlight the importance
that context has for SGB success (Table 2).
Table 1. World Bank Enterprise Survey—Biggest Obstacle
(Low and Lower-Middle Income Countries Only)
14

Biggest Obstacle
% of
Firms
Access to ?nance
17
Electricity
14
Practices of the informal sector
11
Tax rates
11
Political instability
8
Inadequately educated workforce
8
Corruption
7
Crime, theft, and disorder
6
Table 2. ANDE Members’ Most Frequent Responses by
Country: Biggest Challenge that SGBs Face
Country
Biggest Challenge to SGB Success
Brazil Human capital
Colombia Access to ?nance
India Enabling environment
Kenya Access to ?nance
Mexico Market access
Nigeria Infrastructure
South Africa Human capital/Access to ?nance
10 Engines of Prosperity
ANDE Impact Report 2012 11
IRIS Data: Job Creation
How does ANDE members’ work stack up against this belief that
SGBs will drive job creation? The businesses they support average
64 full-time employees (N=596). But the median number of
employees is 19, indicating a majority of companies on the smaller
side. The largest employers are in the health and information and
communication technology (ICT) sectors.
277 companies reported the number of people they employed across
multiple years; the average compound annual growth rate of full-
time jobs was 58 percent.
15
The median, however, was 9 percent,
again suggesting that the majority of ?rms have a slower growth
rate with a few strong outliers growing more quickly. Notably, ICT
companies grew jobs much more quickly than other sectors at a rate
of 179 percent (N=51).
How do we know whether these jobs represent the “good” kind? On
average, these SGBs provide 72 permanent jobs (including both full-
time and part-time jobs) with average salaries of $11,500 per year
(N=71).
16
Putting that wage rate in context shows these small and
growing businesses pay on a scale far above their countries’ minimum
wage rate (median 478 percent higher), and in many cases above the
average wage rate (median 78 percent higher).
17

We cannot extrapolate from these benchmarks that every small
business has the potential to create high-quality jobs at strong
growth rates. These are all companies that receive support,
?nancial or capacity-building, from ANDE members. But the data
do indicate the high potential for impact on job creation of these
small and growing businesses.
IRIS and the Global Impact
Investment Rating System (GIIRS)
IRIS is a catalog of generally accepted performance metrics
that leading impact investors use to measure social,
environmental, and ?nancial success; evaluate deals; and
grow the sector’s credibility. Developed to increase the
transparency and credibility of the impact investing industry,
IRIS provides a common language for communicating
results. The IRIS initiative also collects IRIS-aligned
performance data from organizations around the world to
support industry-wide benchmarking and analysis.
ANDE became an early IRIS partner in 2010. Through this
partnership, ANDE supports its members to align with IRIS,
and established a core set of IRIS metrics we recommend
members adopt. ANDE also facilitates data contribution
from its members to the IRIS data repository.
In addition, some ANDE members contributed data
through GIIRS. GIIRS Ratings & Analytics provides
comprehensive, transparent, and comparable data on
the social and environmental performance of companies
and funds. Building on the IRIS taxonomy, GIIRS provides
a judgment on a company’s or fund’s performance and
a platform for conducting detailed benchmarking and
analysis. By providing a technology platform, veri?cation
process, and a core set of comparable metrics, GIIRS aims
to lower the barriers to entry for new investors interested
in investing with impact and trigger a race to the top in
terms of impact performance.
All of the IRIS Data sections rely on the data submitted
by the members listed here; together the members have
reported performance data on over 1,000 companies
headquartered in 77 countries.
Accion International
Acumen Fund
Agora Partnerships
Bamboo Finance
Business Partners International
Calvert Foundation
EcoEnterprises Partners
Endeavor
Grassroots Business Fund
Gray Ghost Ventures
Halloran Philanthropies
IADB–Multilateral Investment Fund
IGNIA Partners LLC
Inveneo
NESsT
New Ventures
Oxfam–EDP
Rockefeller Foundation
Root Capital
Small Enterprise Assistance Funds (SEAF)
Unitus Impact
Village Capital
Vox Capital
ANDE Member IRIS Contributors
and GIIRS-Rated Funds
STATE OF
THE SECTOR
ANDE Impact Report 2012 13
Small and growing businesses in emerging markets face
challenges that their counterparts in developed economies do not
have to overcome. ANDE members focus much of their resources
on helping SGBs alleviate these barriers to growth through
building capacity and providing access to ?nance.
Capacity Development
Most entrepreneurs require non-?nancial support before,
during, and after acquiring capital. This support can take many
forms and is referred to as SGB capacity development. The key
skills required to develop and grow a business often must be
taught or transferred. Capacity development is critical to small
business growth, and ANDE members provide a wide range of
support services.
Since 2009, ANDE members have invested $400 million in direct
capacity development support. Generally, they provide high-
touch services to SGBs. The median capacity development service
provider works with an annual portfolio of 30 businesses, and
spends $11,000 per SGB (N=38). One-on-one mentorship and
direct consulting services are the most common delivery methods
for services (N=66).
Accelerators and Incubators
Incubation and acceleration programs are examples of such
high-touch engagement with SGBs. These are programs that
help entrepreneurs to grow their companies through training,
mentorship, networking opportunities, and consulting.
18
In 2012,
ANDE embarked on a new initiative to better understand the
efectiveness and scalability of these programs.
With the support of Halloran Philanthropies, ANDE and
Village Capital surveyed 52 existing accelerator programs to
chart the landscape of those focused on social businesses in
emerging markets. Of these, 38 percent operate as for-pro?t
organizations, 44 percent operate as nonpro?t organizations,
and the rest do both. Of the programs surveyed, 65 percent ofer
services free-of-charge to entrepreneurs; those programs that
charge for services have an average fee of about $1,300 (excluding
three outliers that charge signi?cantly more).
The average social business accelerator program works with each
cohort over the course of six months, and most meet with the
entrepreneurs at least twice a week.
19
Accelerators work with
entrepreneurs at various stages of their development, but the
majority focus on seed or start-up stage.
We asked the participating accelerators to report on the success rates
for all companies that had gone through their programs, de?ning
success as a company operating at a pro?t or having raised investment
of at least $500,000. The 41 respondents that track past cohorts’
progress classi?ed 31 percent of participating companies as successful,
46 percent as not yet pro?table but still operating, 10 percent as
having failed, and 13 percent as status unknown.
What makes for a highly successful accelerator program? We looked
at the qualities that correlate with higher success rates, and found
that the selectivity of the program is a good indication of its cohorts’
later survival and success, as are linkages to domestic commercial
investors and to corporate value chains. The several months spent
recruiting entrepreneurs, developing a pipeline of high-quality
applicants, and growing a network of potential partners is at the crux
“The small size of these ?rms implies that managers (or owners) of SMEs often
need to perform a wider range of tasks than do those in larger ?rms, since there is
less room for specialization. This requires diverse skills that SME managers may
not have, particularly in developing countries where the quality of management
education tends to be lower than that found in developed countries.”
—Scaling-Up SME Access to Financial Services in the Developing World, The International Finance Corporation
Areas of Focus
% of Members
That Provide
Service
Building organizational capacity 90%
Creating market linkages 83%
Supporting investment readiness 64%
Other indirect and ecosystem services 61%
N=70
Types of Delivery Methods
% of Members
That Use Method
One-on-one mentorship 74%
Direct consulting services 71%
Classroom/seminar training 64%
Peer-to-peer/group support 62%
Business plan competitions 27%
N=66
Table 3. ANDE Member Capacity Development Services and
Delivery Methods
Any organization highlighted in bold is an ANDE member.
14 Engines of Prosperity
of the value accelerator programs can add. ANDE believes that better
understanding the accelerator model is important to the development
of this sector and, in partnership with many of our members, will
continue to delve further into this area in 2013.
Focus on Human Capital
ANDE members recognize that ?lling the talent gap is key
to fostering the growth of small businesses. SGB capacity
development focuses not only on developing the entrepreneur, but
also on developing skilled managers, who can be challenging to
?nd in many developing countries. Access to education is difcult
for most, and top talent often chooses to emigrate for positions
internationally or to work for large multinationals in their home
countries. Below are three examples of members using diferent
approaches to alleviate this problem.
» The African Management Services Company (AMSCO)
places mid-level and senior managers in African companies
for three year contracts. These managers, often expatriates,
provide expertise and experience as the company grows.
They also train their successors, so that when their contract is
complete the company retains the knowledge and continues
to grow.
» edge places young professionals from emerging markets in
businesses in other emerging markets that serve the Base of
the Pyramid (BoP) for six- to 12-month engagements. These
young people gain experience with the companies while
providing valuable support to businesses that otherwise might
be unable to aford additional staf. These professionals return
to their home countries and bring with them skills that stay in
their local BoP markets.
» The Global Business School Network (GBSN) believes that
the talent gap needs to be ?lled by strengthening emerging
market business education. GBSN facilitates connections
between leading business schools and developing world
educators. The network builds the capacity of business
schools to train high-quality managers who can meet the
demand for talent in their own markets.
Financing Small
and Growing Businesses
The challenges that entrepreneurs face in the developing
world both magnify their need for capital and also create more
hurdles to accessing it. Compared with their larger counterparts,
small businesses are more likely to list “access to ?nance” as a
signi?cant barrier to growth.
20
A growing recognition that SGBs
are key to economic growth has spurred an increase in ?nance
available to this segment.
ANDE has identi?ed 293 funds, including 73 managed by ANDE
members, that invest in the small and growing business segment in
emerging markets.
21
63 percent of these are closed-end funds. The
average fund set target fundraising at $52 million and reported
committed capital of $28 million.
Of the 283 funds with complete deal size information, 38
percent are SGB-focused, making deals only within the $20,000
to $2 million range. The remaining 62 percent are SGB-
inclusive, meaning their deal sizes are inclusive of that range but
also may go above $2 million or below $20,000. The majority
of these make deal sizes above $2 million, with an average
maximum of $7 million.
The general trend over the past decade is one of growth both in the
number of funds that have launched and in the size of these funds
(Table 4). This expansion has not been steady; the number of funds
that achieved a ?rst close per year declined after 2008, but growth
has begun showing positive signs of increase again. This pattern
mirrors traditional emerging market private equity fundraising,
where the median fund size, number of closed funds, and deals made
have experienced ?uctuation rather than steady growth since 2008,
likely due to the global ?nancial crisis (Figure 1).
22
On average,
closed-end funds raised 73 percent of their target AUM.
23

Table 4: Number and Size of Funds 2003 - 2012
2003-2007 2008-2012
Number
of Funds
Launched
75 145
Average Target
AUM (millions)
$45 $53
ANDE Impact Report 2012 15
Figure 1. Number of SGB Funds by Year of First Close
10
6
8
12
14
15
23
33
27
23
41
30
0
5
10
15
20
25
30
35
40
45
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
N
u
m
b
e
r

o
f

F
u
n
d
s
NOTE ON THE METHODOLOGY
The data in this section are the result of a research partnership between ANDE and the Global Impact Investing Network (GIIN) led by the staff of
ImpactBase, an online global directory of impact investment vehicles. In addition to capturing data from funds and products managed by ANDE
members or currently pro?led on ImpactBase, the team leveraged internal research assets, accessed public sources of information, conducted
surveys of asset managers, and worked with a number of institutional investors, intermediaries and advisors to complete a global market scan of
investment vehicles that invest in emerging market SGBs. Funds quali?ed for inclusion in this data set when they met three criteria: (1) investment
target included emerging market countries, (2) target deal sizes ranged in the $20,000 to $2 million category, and (3) focus did not include
micro?nance institutions. See Appendix A for the list of organizations that helped inform this research. ANDE’s decision to adjust the research
methodology in 2012 makes this year’s results not comparable with data presented in 2011.
Investing for Environmental Impact
About 12 percent of all SGB funds list “environment” as a target sector and 20 percent list energy. Directing capital toward
environmental impact requires a balance between growth and sustainability. Here are two examples of deals that integrate the two.
» The Low Carbon Enterprise Fund (LCEF) was established to provide ?nance and technical support for “low carbon” social
entrepreneurs in the developing world. The businesses they invest in provide access to clean energy products and services
within some of the world’s most disenfranchised communities, and they also deliver broader health and social bene?ts on
the ground. Around 40 percent of rural Peru is not yet connected to the grid but much of the country’s renewable energy
resources remain untapped. To address this issue, the LCEF invested in WindAid Peru, a small business that manufactures
and installs wind turbines in disadvantaged, off-grid communities. WindAid’s new 500W turbine is designed to be affordable
for poor households and can generate enough electricity to meet the basic needs of rural families. The LCEF’s September
2012 investment of $100,000—in the form of a loan note with revenue share agreement—will help WindAid scale up its
production and hire a much needed marketing manager. LCEF also has consultants working closely with this venture to
provide ongoing management and mentoring support on a pro-bono basis.
» The EcoEnterprises Fund provides risk capital to SGBs in Latin America and the Caribbean that complement conservation and
work closely with remote communities. Its ?rst fund invested $6.3 million in 23 sustainable companies. One of these companies
was Sambazon, a small business that buys sustainably harvested acai from local communities near Macapa, the north arm
of the Brazilian Amazon delta. By paying locals to harvest the acai, Sambazon created an economic incentive to protect the
standing forest, instead of killing the trees to harvest the wood or clear the land to cultivate heart of palm. EcoEnterprises
provided an initial $200,000 in the form of a revolving credit facility, ultimately investing a series of loans for a total of $900,000
to support Sambazon’s growth. Simultaneously, EcoEnterprises provided capacity development services that included helping
Sambazon launch a monitoring and evaluation system. EcoEnterprises launched its second fund in November 2011 and was
pleased to continue this relationship by making a $2 million equity investment to Sambazon in 2012. Today, Sambazon has
converted its facilities’ wood burning boilers to burn Acai seeds and has partnered with a local brick factory to use these seeds
as an alternative to wood, saving more than 200,000 cubic feet of wood per year. In addition, Sambazon has created employment
opportunities and increased the socio-economic status of more than 10,000 family farmers.
16 Engines of Prosperity
Region
% of Funds
Target
Focus
Average
Target IRR
Average
Deal Size
Average
Deals to
Date*
Average
Exits to Date
Africa 37 17% $1,900,000 21 5
Asia 16 16% $2,000,000 11 2
Eastern Europe 3 20% $900,000 -- --
Global/Multi-Region 20 11% $1,500,000 13 3
Latin America 15 17% $2,400,000 6 0
MENA 9 20% $900,000 -- --
N=293 N=96 N=124 N=41 N=41
Table 5. Fund Descriptive Data by Target Region
*Includes only closed-end funds that reported both deals and exits
Nearly 40 percent of funds in the dataset target sub-Saharan
Africa, which mirrors the high percentage of ANDE members
that work in Africa (Table 5). Most funds target multiple
sectors, or have multiple impact goals. The top three sectors
that funds target are ICT, agriculture, and health (Table
6). Across all regions and sectors, exits contine to be scarce
(Table 5).
Honing in on the 37 ANDE member funds that reported
capital deployed, we see a steady increase in SGB investment
each year in terms of both the total amount and average
amount invested per fund (Figure 2).
About 10 percent of all funds, and 18 percent of ANDE
member funds, report a separate technical assistance (TA)
facility that operates alongside the fund to provide capacity
development services to investees. These TA facilities average
$3.6 million in total funding, and the funds that operate them
have lower overall average return expectations: 8 percent
compared with the 17 percent reported by those without a TA
facility (N=12; 87).
The growth in SGB-focused funds represents a signi?cant
expansion of the sector. However, SGB funds are still a very
small piece of emerging market investment (Figure 3).

Sector % of Funds
ICT 31%
Agriculture 26%
Health 23%
Financial Services 20%
Energy 20%
Education 18%
Environment 12%
N=220
Table 6. Fund focus by sector
$0
$1
$2
$3
$4
$5
$6
$7
$0
$50
$100
$150
$200
$250
2008
(n=13)
2009
(n=16)
2010
(n=23)
2011
(n=27)
2012
(n=32)
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C
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Total Capital Deployed
Average Deployed per Fund
Figure 2. Capital Deployed—ANDE Member-Managed Funds (N=37)
(
m
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l
i
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n
s
)
(
m
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l
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s
)
ANDE Impact Report 2012 17
Figure 3. SGB Investing Is a Small Sliver of the Pie*
Micro?nance: $88.9 billion - 2011 gross
loan portfolio.
(median loan size $400)
Emerging Market Private Equity: $40.3
billion raised by 101 funds in 2012.
(average deal size $44 million)
SGB Funds: $413 million raised by 30
funds with a ?rst close in 2012.
(average deal size $1.8 million)
*Source: MixMarket, EMPEA, ANDE
Bank Lending to SGBs
SGBs in emerging markets have a great unmet need for working
capital and business expansion loans. But most banks do not see
SGBs as an attractive client base.
Around 60 percent of micro, small, and medium enterprises
(MSMEs) in emerging markets are either unserved or underserved
by banks. Formally registered SMEs represent a credit gap of
$700 to $850 billion, with the total MSME credit gap around $2
trillion.
25
However, recent research shows a huge potential upside
for banks that can learn to serve this population. McKinsey and
the International Finance Corporation (IFC) surveyed leading
emerging market banks and found an average Return on Equity of
25 percent for their small business lending portfolios.
26

Similarly, high-performing ?nancial institutions surveyed by the
Small Business Banking Network reported higher Return on
Assets when they had a higher proportion of SME lending in their
portfolio.
27
McKinsey calculates that lending to small businesses
could represent a signi?cant pro?t source for banks: “capturing
10 percent market share in the MSME segment (approximately
200,000 clients) could translate into USD 170 million per year in
pre-tax pro?t.”
28

Expanding Role of MFIs
Micro?nance Institutions (MFIs) also have shown growing interest
in lending to small businesses. Typical micro?nance loans are
designed for individuals or microenterprises with fewer than ?ve
employees. But increasingly, MFIs have begun creating products
tailored to the next size up: microenterprises that have grown,
formalized, and have larger capital requirements. A recent study
surveyed 300 MFIs globally and found that 70 percent expected
The Elusive Exit
In emerging markets, exiting investments is particularly challenging. There is inadequate ?nancial architecture to provide for an initial
public offering (IPO), a lack of liquidity within the market, and it is dif?cult for entrepreneurs or interested third parties to come up with
the capital to buy back the necessary shares.
24
ANDE members are experimenting with innovative models designed to overcome these
barriers to investment.
Business Partners International overcomes these challenges by using a ?nancing model that structures and prices investments as
self-liquidating instruments. It has pioneered the use of royalties, a percentage of sales, in emerging market risk capital investments.
Individual solutions are structured to simultaneously ensure that the venture can generate suf?cient cash ?ow to afford repayments
and that Business Partners is compensated for the risk associated with the unsecured portion of the investment. Using this method,
Business Partners participated in 47 exits in 2011 and 57 in 2012, achieving an accumulative capital pro?t of US $811,764 and US
$5,489,209 respectively. The average internal rates of return (IRRs) achieved were 19 percent, with a top IRR of 53 percent. Of all exits,
65 percent were achieved through sale back to the entrepreneurs/management team, with 35 percent sold to third parties.
In 2002, Business Partners approved an investment in a South African engineering company that was created through the
commercialization of a research group. Business Partners acquired a 25 percent stake in the company, in part to ?nance a
management buy-out. In 2012, the entrepreneur received an offer from a third party for the outright purchase of all interest in the
business, which resulted in Business Partners selling its 25 percent share and achieving an IRR of 40 percent. Over time, this company
has become South Africa’s leading supplier of Thermal Spray Coating and Plasma Transferred Arc services.
to increase their small business portfolio as a potential business
growth opportunity.
29
The Micro?nance Information Exchange
reports an increase in MFI lending to small businesses, from 8
percent of institutions in 2010 to 14 percent in 2011, a gross loan
portfolio of nearly $6 billion in 2011.
30
18 Engines of Prosperity
Unlocking Bank Capital for SGBs
In 2012, with support from the Citi Foundation, ANDE
partnered with SBI in India and the Small Business Banking
Network in South Africa to host two roundtables focused on
unlocking bank capital for SGBs. The banking roundtables
convened leaders from the banking sector and the SGB
sector to discuss the barriers to small business ?nancing and
potential solutions.
While the markets are quite different, both groups concluded
that a major challenge was helping entrepreneurs discover
what products are available and how to access them. Many
entrepreneurs do not understand the process for receiving
bank credit. They might not have ?nancial management
systems that meet banks’ criteria, and many need capacity
development services to meet requirements. Banks also
recognized that costs are high and the process time too long
for them to engage with SGBs. Educating entrepreneurs is a
necessary ?rst step, but work also needs to be done to help
banks understand how to better serve SGBs. Both groups
also recognized that cutting down on transaction costs and
increasing ef?ciency were important. Finally, roundtable
participants saw that including other actors—public banks
and development ?nance institutions, for example—would
help spur support for access to ?nance.
ANDE members are helping overcome some of these
barriers through innovative tools and methodologies. The
Entrepreneurial Finance Lab (EFL) has developed effective,
automated, and scalable tools to identify high-potential,
credit worthy entrepreneurs. Based on psychometric
principles, the EFL tools have been statistically proven to
reduce default rates and expand lending when controlling
risk. To date, these tools have been utilized by ?nancial
institutions in more than 20 countries. SCOPEInsight pro?les
producer organizations in developing countries on their
creditworthiness and performance, bridging the information
gap by providing these pro?les to banks interested in giving
credit. The ratings methodology moves beyond traditional
measures of creditworthiness to assess the core business
strengths and management capacity of farmer organizations.
ANDE Impact Report 2012 19
THREE AREAS
FOR ACTION
20 Engines of Prosperity
In 2012, ANDE explored three types of SGBs that face signi?cant
challenges yet ofer a high level of potential impact: start-up stage
enterprises, women entrepreneurs, and agribusinesses. Each
require tailored support to grow and meet that potential.
Start-up Stage Financing
Even within the “missing middle,” there is an imbalance in
support and funding options for those SGBs at the lower end of
the divide. Seed and start-up stage enterprises (which are referred
to as “start-ups” in this report)—usually looking for $20,000 to
$100,000 of ?exible capital—struggle to ?nd funds that will invest
the smaller amounts necessary. Enterprises at this stage have not
yet proven their business model and are pre-revenue or cash-?ow
negative, presenting a higher risk for potential investors. This is
especially true for social businesses, where innovative business
models and low-income clients result in a slower pace of growth.
31

At the same time, many fund managers making deals at the next
level up, in early-stage or growth-stage SGBs, ?nd a small pool
of investible enterprises and a crowded group of funds seeking
to place capital. The GIIN and JP Morgan’s annual survey of
impact investors asks respondents to identify “the most critical
challenges to growth of the impact investing industry today” to
which the second-most common response was a “shortage of high
quality investment opportunities.”
32

This mismatch is what Monitor Inclusive Markets calls the
“Pioneer Gap.” Monitor points to a structural problem as its
cause: Because many impact investing funds use “traditional
structures with traditional return expectations” where ?nancial
returns must drive investment decision-making, start-ups
represent too much risk for these funds.
33
This gap is mirrored in
our scan of SGB funds: Only 6 percent of funds reported a focus
on start-up stage businesses (Figure 4).
One key to ?lling this Pioneer Gap and creating a robust pipeline
of enterprises ready to scale is a combination of ?exible capital,
often in the form of philanthropic grants or debt instruments. This
capital with lower return expectations can help move enterprises
toward the next stage of investment (Figure 5).
34

ANDE members recognize that supporting early-stage businesses
is key to the development of future pipeline and to the creation
of a healthy SGB ecosystem. In addition to philanthropic capital,
ANDE members are developing innovative models to reach start-
up enterprises. Where traditionally the transaction costs of these
small deal sizes and risk of investing in start-up stage companies
is too high, members are overcoming these obstacles through
innovation and collaboration.
Business Life Cycle
and Financing Stages
Seed: Idea stage, pre-cash ?ow
Start-up: Product development begins and initial
operations established
Early: Generating revenue, but usually pre-pro?t
Expansion/Growth: Generating a sustainable pro?t and
ready to scale through investment in new facilities, entry
into new markets, etc.
Philanthropic Funds
Grant-making Foundations
Foundations that provide enterprises with grant
capital, without any expectation of return or principle
These funds are supported by grant capital and
donations; this category includes non-pro?t
funds, venture philanthropy, and “evergreen
funds” that reinvest returns back into the fund
itself rather than returning them to investors.
Traditional (Impact) Fund Structures
These funds raise capital from the market; their
investors expect a return on investment, but are often
willing to accept below-market rates
*Data from SGB Fund scan.
17%
5%
Start-Up Stage
Average Target AUM: $11.9 M
Average Deal Size $106,000
Early Stage
Average Target AUM: $40.5 M
Average Deal Size $789,000
Growth Stage
Average Target AUM: $49.1 M
Average Deal Szie $1,436,000
Note: N=162; Fund managers could select more than one stage
and 35% selected at least two.
Number of Funds
Figure 5. Continuum of Return Expectations
Figure 4. Target Investment Business Stage—
Fund Sizes and Numbers.
102
94
10
Target IRR
(Average)*
none
ANDE Impact Report 2012 21
BUILDING A PIPELINE:
Vox Labs in Brazil
Vox Capital and Artemisia Social Business developed
the Vox Labs partnership to begin to address the pipeline
challenge in Brazil. Artemisia Social Business, an
organization that catalyzes high-impact social enterprises
through education initiatives, knowledge dissemination, and
social enterprise acceleration, identi?es entrepreneurs with
the potential to make signi?cant social impacts at the Base of
the Pyramid but who are not yet ready for equity investment.
These entrepreneurs participate in Artemisia’s six-month
acceleration program to re?ne their business model and gain
the skills necessary to successfully move from the pilot phase
to full operations. Vox Capital, a Brazilian impact investment
fund, commits to invest in at least one entrepreneur in
each cohort, using a convertible debt structure. These debt
investments of $100,000 or less provide entrepreneurs with
the capital they need to begin operations, and they can be
converted into equity after six to 12 months.
Since the program began in 2011, the Vox Labs partnership
has led to three investments. Sautil, for example, is an
online company that helps low-income individuals navigate
Brazil’s public health system. Sautil’s website provides
free information to help users ?nd physicians, emergency
services, and vaccinations, among other health services. In
2011, Sautil went through Artemisia’s accelerator program
and was selected to receive a $50,000 debt investment from
Vox. Sautil grew quickly over 2012; the relationship that
it developed with Vox through its initial debt investment
allowed Sautil to rapidly move to a second round of funding.
In 2012, Vox converted its initial investment into a $2.5
million equity investment. The initial convertible debt
investment provided both companies with the opportunity
to build trust, which in turn sped up the due diligence and
negotiation process for the second round.
Focus on Women Entrepreneurs
Women-owned businesses represent approximately 30 percent
of all small and medium enterprises in emerging markets.
While women entrepreneurs represent a signi?cant portion of
the overall potential for economic growth, their ?rms grow at
much lower rates than those owned by their male counterparts.
Women tend to have smaller and less diverse networks, including
fewer options for mentors. They are more likely than their
male counterparts to enter business out of necessity and also
have much more difculty accessing ?nance to support these
businesses. Many women lack con?dence or let a fear of failure
inhibit their entrepreneurial ambitions. The realization that
women entrepreneurs face considerable systemic barriers to
scale, hindering their signi?cant potential, has prompted research
and action by several ANDE members.
Improving the performance of women-owned and women-
led businesses has impacts on economic development, gender
equality, and community development. “M4: The Most Missing
of the Missing Middle,” a Capacity Development Fund grant
and research initiative led by Value for Women, is examining
underinvestment in women-owned small and growing
businesses in Latin America. Initial ?ndings helped provide
recommendations for how the SGB ecosystem can better serve
them. Financial literacy programs for women, gender sensitivity
training for investment managers, and long-term capacity
development approaches all could play critical roles in getting
women entrepreneurs the access to capital they need.
As the movement to support women’s entrepreneurship grows
beyond micro?nance, ANDE members continue to be at the
vanguard of capacity development eforts and directing capital
toward women entrepreneurs.
Grants to Spur Growth
The Global Catalyst Initiative provides grants of up to $40,000
and capacity development support to help high-potential social
ventures get from pilot to proof of concept. Called “Proving
Capital,” these grants allow start-ups time and ?exibility to test,
iterate, and prove their concept. Where angel investors ?ll a risk
capital role in traditional commercial markets, social ventures
rarely offer the ?nancial upside that attracts such investors.
The Catalyst Initiative believes that intelligent granting can ?ll
this gap. Currently focused on East Africa, the Global Catalyst
Initiative funds only ventures that have been operational for
two years or less and that have an operating budget of under
$150,000. It has funded six ventures to date.
22 Engines of Prosperity

CASE STUDY:
WEConnect International, Fidenza Disegno,
S.A., and Walmart
The level of women’s participation in entrepreneurship in
Latin America is among the highest worldwide. Over the
past 10 years, 15 percent of Latin America’s economic
growth can be attributed to women’s economic activity.
35

In Peru, one of the fastest growing economies in the
world, 19 out of every 100 people participate in early
stage business activities. Women own and operate more
than 40 percent of these enterprises. When surveyed,
women in Peru identi?ed the lack of quality training as
the greatest barrier to business success.
36

WEConnect International helps build sustainable
communities by empowering women business owners
through providing valuable resources, helping them
formalize their businesses, and assisting their integration
into the supply chains of large multinational corporations.
In 2011, with the support of USAID, WEConnect launched
the Pathways Access Initiative (PAI) to help U.S.
corporations diversify their supply chains in Peru.
During WEConnect’s 18-month engagement in Peru, more
than 400 women entrepreneurs participated in WEConnect
trainings, particularly from high-growth and high-impact
SGBs. One of these female entrepreneurs navigating the
road to growth in Peru was Milagros Johanson, owner
of the jewelry company Fidenza Disegno, S.A. With the
assistance of WEConnect, Fidenza Disegno secured a
contract to sell its products on Walmart.com. Walmart
had recently launched its Global Women’s Economic
Empowerment Initiative, under which it committed to
source $20 billion from women-owned businesses and to
launch a dedicated women-owned product marketplace
on Walmart.com. WEConnect worked with Milagros to get
her business certi?ed as women-owned and facilitated a
relationship between her and Full Circle Exchange. Full
Circle Exchange acted as an intermediary so that Milagros
did not have to incur all of the expenses associated with
being audited as a Walmart supplier.
With support from WEConnect, Milagros created
a relationship with the largest retailer in the U.S..
WEConnect identi?ed a successful entrepreneur in
Milagros, one poised for expansion and ready to take
advantage of new opportunities in the global marketplace.
By the end of 2012, her business employed nearly 250
women in Peru. Milagros’s product line for Walmart,
Isabella Lazarte Jewelry, is now a featured through
Walmart’s “Empowering Women Together” section on
Walmart.com.
“For Walmart, empowering women
isn’t just the right thing to do, it’s
also smart business—helping us to
understand and serve our customers
better, ?nd the best talent, and
promote economic growth in the
communities we serve.”
—Walmart Global Responsibility Report
IRIS Data on
Female-Owned Enterprises
139 SGBs in our dataset report on the percentage of the
company owned by women; of those, 61 are majority-
owned by women. Comparing this subset against the
full sample of companies, we ?nd lower median earned
revenue and new investment capital. This pattern is to
be expected given the barriers to growth that women
entrepreneurs face; however, the data also show a slightly
higher median number of full-time employees compared
with the overall median. While the data set is too small
to be able to draw de?nitive conclusions, it points at the
potential of women entrepreneurs to make an impact on
their communities through employment generation.
Majority
Female-
Owned SGBs
N All SGBs N
Earned
revenue
$300,000 55 $ 814,000 899
New
investment
capital
$40,000 5 $ 57,000 262
Full-time
employees
21 41 19 602
ANDE Impact Report 2012 23
Investing in Agriculture
65 percent of ANDE members focus on agriculture, a re?ection
of both agriculture’s importance in emerging market economies
and the sector’s high potential for impact. In Africa, for example,
agribusiness represents about half of gross domestic product (GDP),
and it has the potential to grow from a $313 billion industry in 2010
to $1 trillion in 2030.
37
In developing countries, 2.5 billion people
depend on agriculture for their livelihoods, and 80 percent of the
food supply in Africa and Asia is produced by smallholder farmers.
38

A strengthened agriculture sector in developing countries means
more secure food supply, improved livelihoods in rural communities,
and broad-based economic growth.
Agribusinesses are critical to this growth. They link smallholders
to markets, provide them with seeds and other farm inputs, and
add value to crops through processing and quality improvement.
While these businesses are key to meeting global demand and
driving economic growth in rural communities, as in other
emerging market sectors they often face signi?cant challenges
in ?nding skilled managers, accessing ?nance, and linking to
markets.
IRIS Data on Agriculture
Of the companies for which ANDE members provided data,
42 percent are agribusinesses. The majority of these SGBs buy
crops from smallholder producers—mainly cofee, but also
cocoa, spices, fruit, rice, and honey. These businesses provide
a key role in connecting smallholders to global markets and
improving their livelihoods.
The median agriculture SGB buys from 600 smallholder farmers,
and pays an average $1,400
39
per year to each smallholder for
their crops. Between 2007 and 2012, 189 of these businesses
made total payments of $625 million to smallholder farmers.
SGBs in the agriculture sector exhibit strong growth, reporting
average compound annual revenue growth of 54 percent.
Median revenue is around $1.2 million annually. And as these
companies grow their revenues, they tend to also grow the
payments they make to smallholders in their supplier network.
Higher revenue growth is not only correlated with higher
total payments to suppliers, but also higher average
payments per supplier. Growth for these businesses means
growth for their communities as well.
Catalyzing Smallholder Agricultural Finance
Smallholder farmers often are subject to low yields, poor linkages
to markets, and strong vulnerability to risk. However, the rising
global demand for food is leading multinational corporations
increasingly to rely on smallholder farms to provide a sustainable
supply for their products. A chief obstacle to tapping into
smallholder farmers to meet this demand is farmers’ inability to
access the ?nance they need to improve production.
40

With support from the Citi Foundation, Skoll Foundation
and an advisory committee that included ANDE, TechnoServe,
and Root Capital, Dalberg Global Development Advisors
conducted a market assessment and landscaping of several
smallholder value chains and agricultural ?nance. The
agribusinesses that link producers to markets represent one
pathway to smallholder ?nance. The study found that agricultural
social lending has the potential to grow from around $9 billion
($350 million of which is provided through social lenders) to $33
billion, with a mix of short- and long-term ?nancing. In addition,
the report suggested that providing ?nancing to traders who
establish aggregation points could represent the mechanism to
reach those smallholders not organized into formal relationships
with producer associations.
“ANDE made this collaborative effort
possible. We are now moving forward
in partnership with ANDE to host
roundtables with some of the largest
multinational companies in the world
to discuss these ?ndings and what
it could mean for future pilots and
partnerships.”
—Graham Macmillan, Citi Foundation
In 2012, ANDE held a corporate roundtable in partnership with
the Citi Foundation, Skoll Foundation, and Dalberg, to discuss
smallholder agricultural ?nance and to examine the report’s
?ndings. More than 40 participants gathered to discuss the
variables inherent in successfully banking clients in frontier
markets, including the necessity of providing value-add services
to de-risk the upstream supply chain, and what ANDE’s role could
be in supporting these strategies.
“From my side, it was an opportunity
to share a new, holistic framework
to tackle an intractable problem and
bene?t from shared insights around the
table. The framework provides a clear
foundation for strategies to migrate
smallholder farmers from subsistence
into market opportunities.”
—Simon Winter, TechnoServe
24 Engines of Prosperity
Small and Growing Businesses
in Agricultural Value Chains
Small and growing businesses are critical to well-functioning agricultural value chains in developing economies. They are able to reach
smallholder farmers directly and connect them to international markets. SGBs add value to production, ensuring the safe storage,
distribution, and processing that allows those crops to meet global market standards. Supporting these small agribusinesses to grow
will mean not only more stable livelihoods for smallholders, but also the creation of jobs along the whole value chain. ANDE members
are supporting SGBs that operate along each stage of the chain; here are a few examples.
Input Suppliers
Voxtra East Africa Agribusiness Fund invested $1.4
million in Western Seed Company, a Kenyan company that
sells hybrid maize seed to smallholder farmers. With this
investment, Voxtra joins Western Seed’s current investors,
Acumen Fund and Pearl Capital Partners, with the goal of
doubling its production in ?ve years.
Oxfam’s Enterprise Development Program supported
the Dadeldhura Farmers’ Cooperative Society (DAFACOS),
a company based in a remote western region of Nepal
that sells seeds and other inputs to smallholders, with a
$150,000 loan and $150,000 of capacity support. Oxfam
also supported DAFACOS to access a loan from the local
Kumari Bank that will be critical for its expansion.
Collection & Aggregation
Root Capital supported COOPCAB with a $200,000 loan.
This Haitian cooperative collects coffee from their network
of smallholder farmer members and sells it to markets in
Japan, Europe and the United States. By maintaining high
quality control standards and providing its members with
technical assistance, COOPCAB is able to charge higher
prices for its export product and contribute to increased
incomes for its members.
Technoserve supported smallholder vegetable farmers
in Tanzania to form the Mlamke Producer Business Group.
Through the group, smallholders have received training on
both tomato production and basic business skills, and have
set up a market collection point where they can bring their
tomatoes to be sold in bulk. By banding together in business
groups, the farmers are able to negotiate a price three times
what they were able to earn previously.
Smallholder Producers
In developing countries, approximately 450 million smallholder farmers produce food
and export crops on plots less than 2 hectares, and earn an average of $170-570 per year.
Processing
I-Dev International and Grassroots Business Fund
(GBF) support Villa Andina, a Peruvian company which
processes dehydrated organic aguaymanto and mango for
local and export markets. Villa Andina buys these crops from
over 300 families of small scale farmers in the Cajamarca
region in the North of Peru. After receiving investment
readiness support from I-Dev, GBF invested in Villa Andina to
help increase the company’s production capacity.
The Global Social Bene?t Incubator and Bamboo
Finance supported Coast Coconut, which creates
opportunities for organic farmers, oil production workers,
and micro franchisers. The company operates in rural
Kenya and Tanzania and provides healthy cooking oil and
cosmetics products that are sold in Kenya and exported to
the US.
Distribution – Wholesalers to
National Markets
Unitus Impact invested in MokshaYug Access
(MYA), a supply chain solutions company that connects
dairy farmers to urban markets in India. MYA builds
procurement and transportation infrastructure bringing
milk from rural areas to urban consumers; over the
next three years, MYA plans to have a footprint in 10,900
villages, servicing 330,000 dairy farmers.
Export – Wholesalers
to Global Markets
Solidaridad Network supports Grupo Hualtaco, a
processing and export company of organic banana in Peru.
The company not only collects bananas from its members,
it also manages the export process to global markets. The
company has grown signi?cantly in recent years, doubling
its export volumes and increasing the income it returns to
producers from $1 million to $2 million annually.
ANDE Impact Report 2012 25
ANDE IN 2012
26 Engines of Prosperity ANDE Impact Report 2012 27
ANDE
IN ACTION
In 2012, ANDEgrewto more than 170 active
members engaged in every emerging market in
the world. ANDEstrengthens the global sector
and also supports local ecosystems to grow.
Here is a snapshot of our work in 2012.
NUMBER OF MEMBER ORGANIZATIONS
ACTIVE IN REGIONAL CHAPTERS, 2012
2012 BY THE NUMBERS
BRAZIL
CENTRAL AMERICA/MEXICO
EAST AFRICA
SOUTH AFRICA
WEST AFRICA
INDIA
20
22
22 38
21
17
ANDE gave out
$86,000
in scholarships
250individuals from 118
member organizations attended
ANDE conferences in Washington,
London, and New York in 2012.
286 people
from 112 organizations
belong to ANDE’s 6 active
Working Groups: Capacity
Development, Capital
Aggregation, Legal, Metrics
& Research, Women
Entrepreneurship, and Youth
Entrepreneurship.
KNOWLEDGE SHARING
WASHINGTON DC
MEXICO CITY
SÃO PAULO
14%
52%
NEARLY 100 PEOPLE
FROM OVER 50
ORGANIZATIONS
ATTENDED ANDE’S
TRAINING PROGRAMS
THAT WE HELD IN
NEW YORK AND
SÃO PAULO IN 2012.
22 IRIS CONTRIBUTORS,
OVER 30 ADOPTERS
The ANDE Research Fund awarded
$400,000
to fund three investigations of the
impacts of small businesses on their
employees, clients, and suppliers
THE ARGIDIUS-ANDE FINANCE CHALLENGE
AWARDED $1,300,000 TO 5 PILOT PROJECTS
The Capacity Development Fund awarded $475,000
to 8 projects that spark collaboration and innovation among ANDE
members, with a particular focus on youth entrepreneurship.
TRAINING & GROWING TALENT FUNDING INNOVATION AND COLLABORATION UNDERSTANDING IMPACT
JOHANNESBURG
NAIROBI
USA & CANADA
LATIN AMERICA
SUB-SAHARAN AFRICA
EUROPE
MIDDLE EAST & NORTH AFRICA
ASIA
OCEANIA
PERCENTAGE OF MEMBERS
ENGAGED IN REGION
71%
66%
58%
38%
34%
30%
1%
Percentage Of Members
Headquarted In Each Region
ANDE Staff Presence
5%
16%
1%
13%
28 Engines of Prosperity
Regional Chapters
ANDE’s Regional Chapters bring together members based in a speci?c country or region to promote collaboration and knowledge
sharing on the ground. In 2012, ANDE ramped up its chapter activities, hiring four new staf based in Sao Paulo, Mexico City,
Johannesburg, and Nairobi, and launching a new chapter in West Africa, based in Lagos. Each chapter works with a local Steering
Committee to develop priorities for the region and to develop opportunities to bring members together to address common challenges
and opportunities speci?c to their geographies.
Legal Working Group
Many ANDE members are global organizations that
negotiate deals and establish a presence in multiple
countries. Navigating the diverse and complex legal
environments in these countries is a major challenge,
and poses a high risk for organizations that wish to enter
underserved markets. The ANDE Legal Working Group was
formed in 2012 in response to this critical challenge to the
growth of the SGB sector. The group brings together legal
experts from 33 members to develop general legal tools
and templates and to learn more about the challenges
that members face when dealing with (1) transactions,
(2) market and policy risk, (3) organizational structure
and internal procedures, and (4) legal relationships. With
support from the Capacity Development Fund, Open
Capital Advisors and TransFarm Africa are leading the
group to develop legal tools and best practices speci?c to
the East African market.
Argidius-ANDE Finance Challenge
In 2012, the Argidius Foundation selected ANDE to design
and implement the Argidius-ANDE Finance Challenge,
a competition aimed at accelerating the development of
innovative and sustainable models to provide growth capital
to early stage enterprises seeking $20,000 to $200,000. The
Challenge—focused on the target countries of Burkina Faso,
Guatemala, Honduras, Mali, Moldova, and Nicaragua—was
designed as a two-stage competition. The ?rst stage awarded
grants of €200,000 to ?ve pilot projects to test their concepts
beginning in October 2012. After 18 months, the second stage
will award €1,000,000 to the most successful Round 1 pilot.
The pilots strategies include: extending equity to underserved
markets, supporting micro?nance institutions to move
upstream and banks to move downstream, experimenting with
a cash-?ow based investment structure, and credit scoring
to support banks’ due diligence. Over the course of 2013 and
2014, the pilots will be evaluated to determine the one with
greatest impact and sustainability.
(See a list of all Round 1 winners in Appendix B).
Brazil
» Artemesia
» AVINA Foundation
» Endeavor Brasil
» MOV Investimentos
» Potencia Ventures
» Vox Capital
Central America/Mexico
» Agora Partnerships
» FUNDES
» IGNIA Partners LLC
» New Ventures Mexico
» Oxfam
» PYMEcapital
» Root Capital
» Value for Women
» Yo Emprendedor
East Africa
» Acumen Fund
» ATMS/AMSCO
» Dalberg Global
Development Advisors
» The Rockefeller Foundation
» Root Capital
» Technoserve
India
» Acumen Fund
» Dalberg Global
Development Advisors
» Dasra
» Grassroots Business Fund
» ShoreBank International
» Technoserve
» Villgro
South Africa
» ATMS/AMSCO
» Dalberg Global
Development Advisors
» GreaterCapital
» Impact Ampli?er
» Swisscontact
» Technoserve
West Africa
» Acumen Fund
» Alitheia Capital
» Dalberg Global
Development Advisors
» Enterprise Development Centre
of Pan-African University
» FATE Foundation
» The Tony Elumelu Foundation
2012 Steering Committees
ANDE Impact Report 2012 29
Notes from the Field
Fostering Industry Collaboration—Brazil
ANDE strongly believes that breaking through silos will create
a stronger ecosystem for small and growing businesses. The
Brazil Chapter has taken this philosophy and begun to focus
the local conversation around speci?c sectors, such as health.
This sector-based approach connects professionals with various
experiences in one sector—from technical to social to political—
and generates a stronger network for the ?eld. The Brazil Chapter
believes that strengthening these connections will ultimately spur
entrepreneurship that will positively impact the industry.
Throughout 2012, the Brazil Chapter identi?ed the main
industries that would bene?t from this sector-speci?c approach:
Access to Finance, Housing, Education, Health, and Technology
were named as top priorities. Simultaneously, the chapter began
identifying outside organizations interested in supporting the
initiative through sponsorships, expertise and logistical support.
This led to a partnership with Itaú Bank, which sponsored
the ?rst event in early 2013 focused on Access to Finance.
At the event, more than 60 participants from banks, capacity
development providers, investors, and universities discussed
?nancial products and services for the base of the pyramid.
Three Brazilian entrepreneurs presented on innovations in
the ?nancial sector and participated in a discussion on the key
challenges for the sector.
In 2013, the Brazil Chapter plans to hold at least two more
events: Housing for the BoP and Innovations in Technology
for the BoP. The chapter believes these conversations will
strengthen participants’ networks and generate a collaborative
environment where they feel stimulated to create new projects,
even with their competitors, for the sake of greater impact for
the local community.
Mapping Networks—Central America and Mexico
In 2011, ANDE awarded a Capacity Development Fund
grant to Root Change and the Central America/Mexico
Chapter to develop a new platform to carry out a mapping of
the entrepreneurial sector of the region. The platform—the
Global Impact Investment Map (GIIMAP)—creates a dynamic
visualization of where a particular organization sits within the
local ecosystem. In 2012, the team joined forces with Spectron
Desarrollo, Promotora Social México, and Universidad Anahuac
del Sur to expand the project to include 27 Mexican partners in
order to conduct a more in-depth study of the entrepreneurial
ecosystem in Mexico.
By the end of 2012, 166 organizations in the Mexican SGB
ecosystem had participated in the mapping by ?lling out pro?les,
and more than 400 additional organizations were identi?ed.
GIIMAP asks organizations to submit information on how they
collaborate with others in the space, thus creating a real-time
display of how the sector works together. The initial mapping
identi?ed that the most robust collaboration area was “identifying
entrepreneurs and SGBs” and the weakest area of organizational
collaboration was around “?nancing.” This ?nding suggests that
the pioneer gap is very prominent in Mexico.
In addition to providing a broad picture of the ecosystem,
GIIMAP allows users to identify themselves within the
ecosystem while also ?nding potential partners and connectors.
Organizations can subsequently better understand their position
in the ecosystem and the areas where they could have the most
impact to propel entrepreneurship. Through GIIMAP, ANDE
was found to be an important in?uencer and broker for ecosystem
strengthening.
The GIIMAP tool has provided a critical perspective to the
sector in Mexico and Central America, not only for new players
in the ?eld but in overall knowledge of the state of the sector and
resources is available.
Incubating Early Stage Enterprises—East Africa
In December 2012, ANDE, CARE, the Rockefeller Foundation,
USAID, and Acumen convened 55 organizations in Nairobi for
a workshop on early stage incubation of social enterprises in East
Africa. The workshop was designed to be a forum that would allow
participants to develop a deeper understanding of the ecosystem
and identify initiatives to address existing gaps.
After three intense days of discussion and brainstorming, it was
clear that there were a variety of challenges that the local ecosystem
could work collaboratively to address. Broadly, the group found
three main areas of focus: (1) developing talent, (2) making
information and resources more accessible to entrepreneurs,
and (3) supporting accelerators to improve their services to
entrepreneurs. The group then identi?ed three initiatives that the
sector can support to address these speci?c challenges.
Through these three initiatives, the chapter will address
fundamental gaps in the social enterprise ecosystem in East Africa
and will establish itself as a key institution and sector builder
in the region. Throughout 2013, the chapter plans to focus on
actionable next steps to drive collaborative, innovative initiatives
that support these three priority areas.
Supporting Enterprise Development Through Policy
Reform—South Africa
In recent years there has been an increased policy focus in South
Africa on enterprise development (ED). This is an initiative
created by the Department of Trade and Industry (DTI) to
support businesses that achieve growth and create jobs.
According to Statistics South Africa, since the implementation
of ED 12 years ago, there has been a 40 percent increase in small
business and entrepreneurial activity in the country. But many
small business owners within the program still face obstacles to
growing their businesses. At the same time, corporations are facing
30 Engines of Prosperity
increased pressure from the DTI and other government agencies to
support and empower small businesses in their value chain.
In 2012, the South Africa Chapter decided that this gap presents
an opportunity to leverage members’ collective expertise. In 2013,
the chapter will bring together various actors in the ED space to
address the most pressing challenges for entrepreneurs, with a
focus on understanding what works and what does not work in ED.
The ?rst piece of research will survey the overall implementation
of ED by the Top 100 Johannesburg Stock Exchange-listed
companies and multinationals in the county. Knowledge and
best practices learned from the survey will be shared with South
African policy-makers and will be modeled as a tool to guide ED
practitioners in the future. The chapter also will continue to work
with organizations on understanding how to measure the impact
of their enterprise development strategies.
The South Africa chapter believes this collaboration can lead to
growth of the ecosystem to support small business entrepreneurs
in a more sustainable way.
ANDE Impact Report 2012 31
Appendix A. SGB Fund Scan Contributors and Expert Interviews
Participating Asset Management Firms
Accelerator Technology Holdings
Accion
Acumen
Alitheia Capital
AlphaMundi Group Ltd
Alta Ventures
Ambers&Co Capital
Armstrong Asset Management
Azure Partners SA
Bamboo Finance
BlueOrchard Finance S.A.
Bridge Singapore
Business Partners International
Business Partners Ltd
Consorzio Etimos Sc
Corporacion Inversor
Developing World Markets
EcoEnterprises Capital Management
Equator Capital
Equity for Africa
ERM Foundation
Eventures Africa Fund (eVA)
Fundación para la Producción
“FUNDA-PRÓ”
Global Partnerships
Grameen Foundation USA
Grassroots Business Fund
Gray Ghost Ventures
GreaterCapital
Gro?n Capital
GVEP International/AlphaMundi
Group Ltd
Identity Partners
IGNIA Partners LLC
Impact Finance Management S.A.
Inco?n Investment Management
InReturn Capital/Jacana Partners
Knife Capital
Labadens Private Equity
Latin Idea Ventures
Leopard Capital
LGT Venture Philanthropy
Media Development Loan Fund
Minerva Capital Group, LLC
New Ventures
Oasis Capital Ghana
Pragma Patrimônio
Progression Capital Africa Limited
Promotora Social Mexico, A.C.
Prospero Micro?nanzas GP
responsAbility
Root Capital
SA Capital Limited
Sarona Asset Management
SEAF
SEAF India Agribusiness International
Fund
Shared Interest
The Blue Link
Triodos Investment Management
Unique Venture Capital Management
Company
Unitus Lab
Venture Institute Partners SAPI De CV
Village Capital
Vox Capital Consultoria e Assessoria
Ltda
Voxtra
Willow Impact
XSML Management B.V.
Data Contributors
Consultative Group to
Assist the Poor (CGAP)
Emerging Markets Private
Equity Association (EMPEA)
Endeavor
The Micro?nance Information
Exchange (The MIX)
Public Information Platforms
Kusuntu Partners
MENA Private Equity Association
South African Chamber
of Commerce in America
Southeastern Europe
Private Equity Association
Expert Interviewees
Geetha Tharmaratnam, Abraaj Group
Rodrigo Villar, Adobe Capital
Tom Hyland, Aspada Advisors
Rodrigo Menezes, Brazil Venture
Capital Association (ABVCAP)
Alberto Riano, Corpacion Inversor
Lisa Thomas, Equator Capital
Maria Cavalcanti, FIRST Brazil
Jennifer Airey, Heart & Mind Consulting
En Lee, Impact Investment
Exchange Asia
Cate Ambrose, LAVCA
Anthony Randazzo, OPIC
Bonnie Landers, RS Group
Phil Beavers, Shorebank International
Amie Patel, Soros Economic
Development Fund
Ralitsa Rizvanolli , The Micro?nance
Information Exchange (The MIX)
Josh Peterson, Unitus Impact
Virgilio Barco, Banca de Inversion Social
Daichi Hirose, PlaNet Finance Japan
Elma Paulauskaite, Impact Investing in
Brazil
Katy Yung, Sterling Group
Karam Chae, The Happiness Foundation
Gilberto Ribeiro, Vox Capital
Daniel Castaño, BDC Colombia
Mark Meador, Frontier Odyssey
Alejandro Arenas, Inverlink S.A.
Maria Jose Montero, Fondo de Inversion
Social
32 Engines of Prosperity
Appendix B. 2012 ANDE Grantees
Capacity Development Fund
Project Title Members Involved Description
Global Student
Entrepreneurship Awards
(GSEA) Mentorship Pilot
Entrepreneurs’
Organization, Mercy
Corps’ MicroMentor
Entrepreneurs’ Organization (EO) will expand its student/youth
mentorship program via outreach to the skills-based volunteer CSR
programs of internationally based companies, to increase the mentor
pool for the SGB sector. EO will partner with MicroMentor to share
youth mentoring best practices and technology resources, and utilize its
online matching program.
YFE: Young, Female,
Entrepreneur
Value for Women,
Fundación Capital, Cherie
Blair Foundation for
Women (ANDE Women’s
Working Group)
This project will work with existing and planned initiatives focusing on
women entrepreneurs to better understand the underlying problems
of underinvestment and the emerging opportunities for young, female
entrepreneurs. Members will collectively de?ne ecosystem-based
solutions and build a body of knowledge and capacity within ANDE and
its members to grow their impact through YFEs.
Developing Legal Tools
Tailored to the East African
Markets
Open Capital Advisors,
TransFarm Africa,
Acumen Fund, Grassroots
Business Fund, Root
Capital (ANDE Legal
Working Group)
Building off the work of the ANDE Legal Working Group, this project
will pilot development of a set of legal tools suited to the East African
market. This will help ANDE members address their legal needs
on a mission-consistent basis and reduce the time and expense of
understanding local market requirements and legal standards.
Enabling Youth-Led Social
Ventures in Asia
Synergy Social Ventures This project aims to grow the support available to local, youth-led social
ventures and SGBs in Southeast Asia and China by expanding the reach
of Synergy’s support for youth entrepreneurs through national level
partners.
Crowd Funding Platform to
support impact investing
into Entrepreneurs
New Ventures India This project will build a platform that would allow ANDE members to
“sponsor” enterprises for crowd funding. This “sponsorship” would
ensure quality deal-?ow. The ?rst phase will be implemented in India
and then, on experience, be expanded to China and Indonesia.
Developing Standards
for Effective Youth
Entrepreneurship
The Prince’s Youth
Business International,
Kauffman Foundation/
GEW (ANDE Youth
Working Group)
This project will develop quality principles and standards for the youth
enterprise sector with a view to support and guide practitioners,
donors/investors, and policy-makers. It will de?ne tools that are
accessible to the sector and tailor-made for the organizations in the
ANDE Youth Working Group.
Capturing Impact:
Customized Training on
Outcome Data Collection
and Analysis for ANDE
Members
William Davidson Institute
at the University of
Michigan
WDI will hold two workshops—one in New York City and one in
Johannesburg, South Africa—to train members on outcome data
collection best practices.
Design and Delivery of an
Online Learning Module for
Social Entrepreneurs/SGBs
Intellecap Intellecap will design and test the feasibility and ef?cacy of delivering
an “online learning” module focusing on the fundamentals of setting
up a social enterprise. It will then share learnings from the pilot to
promote similar participation and offerings by other service providers.
Making the $-Valued
Business Case for
Incubator/Accelerator
Services
I-DEV International I-DEV will analyze the role and impact that accelerator programs
have on the impact investing sector. This analysis seeks to develop a
quantitative, ?nancially focused evaluation of the “value” incubators/
accelerators are currently providing the impact investment and social
enterprise sectors, in addition to a framework for benchmarking.
ANDE Impact Report 2012 33
Argidius ANDE Finance Challenge
Project Title Organizations Involved Description
Creating Bridges for
Growth
Country: Honduras
George Mason University George Mason University will work with the PYME (SME) division of BAC
Honduras in creating the bridge for funding to ?rms that have been
successful at growing clients of MFIs. In parallel, GMU will launch a
social venture fund which will seek to fund four to ?ve companies in the
?rst year.
I&P Sahel Enterprises
Country: Burkina Faso,
Mali
I&P I&P will create a local equity investment vehicle dedicated to small
SMEs in Burkina Faso and Mali based on their successful model in
Niger. The vehicle will target equity/quasi-equity ?ve-year investments
for €20,000 to €200,000.
Seed Capital that Works
“From Micro to Small”
Country: Guatemala
Multilateral Investment
Fund of the Inter-
American Development
Bank
A fund of $640,000 will provide convertible loans for ten startups
in Guatemala. The project will transfer the know-how to a local
commercial bank—Banco G&T Continental, adopting a mechanism that
can mitigate information asymmetries.
Demand-Driven
Investment Vehicle:
Modeling, Testing, and
Mobilizing a New Capital
Investment Instrument for
Early-Phased Global Social
Entrepreneurs
Country: Guatemala,
Nicaragua, Honduras, Mali,
Burkina Faso
Center for Science,
Technology, and Society –
Santa Clara University
The proposed Demand-Dividend Investment Vehicle will provide a new
tool that improves the ability of impact capital providers to invest in
early-phase SGBs—one that has a higher risk tolerance than loans and
more liquidity than equity. This project will include the ?nal design of
this model, a regression analysis on existing enterprises, the creation
of ?exible term sheets, and the testing of this instrument with four to
six enterprises.
Creating a Mainstream
Market for Agricultural
Finance by Pro?ling
Producer Organizations
Country: Central America
SCOPEInsight SCOPEInsight will pro?le 250 agricultural producer organizations
in Central America based on the SCOPE methodology. The resulting
Pro?le and Assessment Reports will serve as an ef?cient tool for pre-
selection and due diligence of viable prospects for banks.
Project Title Organizations Involved Description
More Sweatshops for Africa?
An Experimental Study of
Firms, Factory Labor, and
Poverty Alleviation
Country: Ethiopia
Innovations for Poverty
Action
This project seeks rigorous evidence on the effects of SGBs on
the workers they employ and, by extension, their households. The
researchers will conduct a randomized control trial of industrial labor
in Ethiopia.
The Effects of Small-Scale
Electricity Systems on Rural
Communities in South Asia
Country: India and
Bangladesh
World Resources
Institute, International
Institute for Applied
Systems Analysis (IIASA)
This project will assess how the recent proliferation of small-scale
electricity systems in South Asia has improved the lives of communities
that they serve. The study will use a quasi-experimental research
design to compare development outcomes for communities that receive
electricity from SGBs, those that receive electricity from the grid, and
those that rely on other sources of fuel.
Evaluating Household Level
Impacts of SGB Creation and
Impact Investing in Peru
Country: Peru
I-DEV International,
Grupo de Análisis para el
Desarrollo—GRADE
This study will focus on the impact of SGBs that employ the poor,
primarily in the agricultural sector in Peru. The team will use a mixed-
methods approach, which will combine quantitative analysis of survey
data with a qualitative assessment of the SGBs and their bene?ciaries.
Research Fund
34 Engines of Prosperity
Appendix C. ANDE Executive Committee and Staff
ANDE Executive Committee
Mildred Callear
Executive Vice President and Board
Member
Small Enterprise Assistance Funds
Maria Cavalcanti
Managing Partner
FIRST Brazil Impact Investing Fund
Advisor, Halloran Philanthropies
Christine Eibs Singer*
Co-founder, E+Co
Advisor, Sustainable
Energy Finance
Willy Foote
Founder and CEO
Root Capital
Lisa Hall
President and CEO
The Calvert Foundation
Randall Kempner
Executive Director
ANDE (Chair)
Bob Kennedy*
Executive Director, William Davidson
Institute
University of Michigan

Raj Kundra
CEO
Macquarie Partnership for Social
Impact
Graham Macmillan
Senior Program Of?cer
Citi Foundation
Paul Malherbe
CEO and MD
ATMS/AMSCO
Neera Nundy
Managing Partner
Dasra
Peter Reiling
Executive Vice President
Aspen Institute
Andrew Stern
Partner
Dalberg Global Development Advisors
Rodrigo Villar
President of New Ventures Global
Network
Director of New Ventures, Mexico
Simon Winter
Senior Vice President of Development
TechnoServe
* Concluded tenure in 2012
ANDE Staff
Katia Dumont
Central America/Mexico Chapter
Coordinator
Genevieve Edens
Impact Assessment Manager
Jenny Everett
Associate Director
Stella Hanly
Operations Associate
Joanna Herrmann
Senior Program Associate
Randall Kempner
Executive Director
Saurabh Lall
Research Director
Mary Mwangi
East Africa Chapter Coordinator
Nompu Ntsele
South Africa Chapter Coordinator
Rebeca Rocha
Brazil Chapter Coordinator
Daina Ruback
Program Coordinator
Appendix D. ANDE Members (as of April 1, 2013)
Accion
Actis
Acumen
Africa Enterprise Challenge Fund
African Social Entrepreneurs Network
(ASEN)
Aga Khan Foundation
Agora Partnerships
Aid for Africa
Alitheia Capital
Argidius Foundation
Artemisia**
The Aspen Institute
ATMS Foundation/AMSCO
Fundación AVINA**
Bamboo Finance
Banorte
Fundación Bavaria
Bernard van Leer Foundation**
BiD Network
B Lab
Blue Haven Initiative
Fundación Bolivar Davivienda
Bpeace (Business Council for Peace)
The Bridge Fund
BRiiX (Brazil’s Impact Investment
Exchange)
Business Partners
Calvert Foundation
Fundación Capital
CapitalPlus Exchange
CARE
CDC Group
Center for Creative Leadership
Cherie Blair Foundation for Women
Citi Foundation**
**These foundations provided additional grant funding for ANDE in 2012.
ANDE Impact Report 2012 35
d.o.b. foundation
Dalberg Global Development Advisors
Dasra
DESUS
Deutsche Investitions- und
Entwicklungsgesellschaft (DEG)
eBay Foundation**
Echoing Green
EcoEnterprises Fund
ECSEL
edge
Emcor Securities Inc.
Emerging Markets Private Equity
Association (EMPEA)
Emerging Stars
Enablis
Endeavor
Enterprise Development Centre - Pan-
African University
Entrepreneurial Finance Lab (EFL)
Entrepreneurs’ Organization
Equity Group Foundation
Fair Trade USA
FATE Foundation
Finance Alliance for Sustainable Trade
(FAST)
Ford Foundation
FSG Social Impact Advisors
Fundacion para la Produccion
(FUNDA-PRÓ)
Fundemex
FUNDES
The Bill and Melinda Gates Foundation
Global Alliance for Improved Nutrition
Global Business School Network
Global Catalyst Initiative
Global Center for Cultural
Entrepreneurship
Goldman Sachs—10,000 Women
Initiative
Grameen Foundation
Grand Challenges Canada
Grassroots Business Fund
Gray Ghost Ventures
GreaterCapital
GroFin
GrowthAfrica
GVEP International
Haitian Hometown Associations
Resource Group
Halloran Philanthropies**
Heifer International
IADB – Multilateral Investment Fund**
ICE (Entrepreneurial Citizenship
Institute)
I-DEV International
Fundación IES
IGNIA Partners LLC
Impact Ampli?er
Impact Finance
Imprint Capital
Indus Basin Holding
Instituto Hartmann Regueira
Intellecap
InterMedia
International Finance Corporation
Inversor
Invest2Innovate
Investisseurs & Partenaires
Jacana Partners
Karisimbi Business Partners
Kenya Feed the Future Innovation
Engine
Land O’Lakes, Inc.
Lang Entrepreneurship Center,
Columbia Business School
The Lemelson Foundation**
LGT Venture Philanthropy
Low Carbon Enterprise Fund
Lundin Foundation
Macquarie Infrastructure
and Real Assets
The MasterCard Foundation
MasterCard Worldwide**
McKinsey
Media Development Investment Fund
Mercy Corps
Monitor Deloitte
MOV Investimentos
Movirtu
National Entrepreneurship Network
Naya Jeevan
NESsT
New Ventures Mexico
New Ventures – WRI
NOTS Foundation
Omidyar Network
Open Capital Advisors
Overseas Private Investment
Corporation
Oxfam**
Partners in Food Solutions
The Pershing Square Foundation
Potencia Ventures**
Potential Africa
The Prince’s Youth Business
International
Promotora Social Mexico
PymeCapital
Rainforest Alliance
Raizcorp
RegCharles Finance and Capital Ltd
Relief International – EnterpriseWorks
ResponsAbility Social Investments
Rianta Capital, Artha Initiative
Root Capital
Root Change
**These foundations provided additional grant funding for ANDE in 2012.
36 Engines of Prosperity
Appendix D. continued...
RTI International
SA Capital Limited
Sandler Trade LLC
Santa Clara Global Social Bene?t
Incubator
SAP AG—Global Communications
SCOPEinsight
Shared Interest/Thembani International
Shell Foundation
SBI (ShoreBank International)
Skoll Centre for Social
Entrepreneurship
Skoll Foundation
Small Enterprise Assistance Funds
(SEAF)
Solidaridad Network
Stanford University
Synergy Social Ventures
TechnoServe Inc.
The Rockefeller Foundation**
The Tony Elumelu Foundation
The William Davidson Institute at the
University of Michigan (WDI)
TransFarm Africa
TriLinc Global
U.S. Agency for International
Development (USAID)
Unitus Impact
Universidad de Los Andes
University of Cape Town
Graduate School of Business
Value for Women Ltd.
Venture Institute
Village Capital
VillageReach
Villgro Innovations Foundation
Vital Voices Global Partnership
Vox Capital
Voxtra
Walmart
WEConnect International
Wellspring Advisors
Wildlife Conservation Society
Willow Impact Investors
**These foundations provided additional grant funding for ANDE in 2012.
Glossary
CLOSED-END FUND: Investment vehicle that raises capital commitments toward the beginning of its life then, at some point closes
to additional investors.
COMMITTED CAPITAL: Pledges of capital to an investment vehicle by investors (limited partners and the general partner) or by the
?rm. Committed capital typically is not drawn down at once but drawn down over a period of time.
DEPLOYED CAPITAL: Capital out?ows from an investment vehicle (e.g., investment fund) to purchase and/or invest in debt, quasi-
equity, and equity from portfolio companies and assets.
INCEPTION YEAR: The year the fund began its operations.
PHILANTHROPIC FUND: A fund supported overwhelmingly by grant capital or one which intends to return less capital than invested
or no capital at all; this may be a “captive fund” of a not-for-pro?t entity; this category also include “venture philanthropy” funds and
“evergreen funds” which raise philanthropic capital and invest it seeking returns in order to sustain the life of the fund itself and
without intention to provide returns to capital sources.
TARGET ASSETS UNDER MANAGEMENT (AUM): The fund’s goal for total fundraising as measured in assets under management.
VINTAGE YEAR: The year when the ?rst committed capital from outside investors is closed and legally binding.
ANDE Impact Report 2012 37
Endnotes
1. World Bank, World Development Report 2013: Jobs, (2012),http://siteresources.worldbank.org/EXTNWDR2013 /
Resources/8258024-1320950747192/8260293-1322665883147/WDR_2013_Report.pdf.
2. IFC, IFC Jobs Study: Assessing Private Sector Contributions to Job Creation and Poverty Reduction, (2013),http://www1.ifc.org/wps/wcm/co
nnect/1c91a5804e6f1b89aceeacfce4951bf6/IFC_FULL+JOB+REPORT_REV2_JYC.pdf ?MOD=AJPERES.
3. IFC Jobs Study, (2013).
4. E. Aryeetey, and W. Baah-Boateng, Growth, Investment and Employment in Ghana, (International Labor Organization, Geneva, 2007),http://www.oit.org/wcmsp5/groups/public/---dgreports/---integration/documents/ publication/wcms_085043.pdf.
5. A. Mehta, A. Shepherd, S. Bide, A. Shah, and A. Kumar. “India Chronic Poverty Report: Towards Solutions and New Compacts in a Dynamic
Context.” (New Delhi: Indian Institute of Public Administration/CPRC, 2011).
6. L. Jemio, and M. del Carmen Choque. “Boliva: Employment Poverty Linkages” in Islam (ed.) (2006).
7. International Labor Organization, Global Employment Trends 2011: The Challenge of a Jobs Recovery,(Geneva: ILO, 2011).
8. International Labor Organization, Global Employment Trends 2012: Preventing a Deeper Jobs Crisis, (Geneva: ILO, 2012).
9. IFC Jobs Study, (2013).
10. IFC Jobs Study, (2013).
11. Jelena Djordjevic, Why Becoming Large Matters: How Scalable, High-Growth Entrepreneurs Can Help Solve the Jobs Crisis,( Endeavor
Insight, New York, 2012).
12. Djordjevic, Why Becoming Large Matters.
13. Most ANDE members focus on direct interventions with the SGB; that is why this report focuses on access to ?nance, human capital, and
markets. Interventions to build a more supportive enabling environment for SGBs also are critical for large-scale business growth, but
are not the primary focus of ANDE members, and are not covered in this report
14. Enterprise Surveys (http://www.enterprisesurveys.org), The World Bank.
15. CAGR calculated across variable number of periods, for any year with data from 2007 to 2012.
16. Average salary is a calculation using the IRIS metrics Permanent Employees and Permanent Employee Wages.
17. Minimum wages may be de?ned as the lowest level of remuneration permitted, which in each country has the force of law and which is
enforceable under threat of penal or other appropriate sanctions. This includes minimum wages set through collective agreements for
which the law at least establishes that such agreements are binding on the parties thereto, either at enterprise, branch, or national level.
Average Wage refers to the monthly, nominal mean wage of all employees in each country for both sexes in local currency units. All data
accessed through the ILO Database on Conditions of Work and Employment Laws. ILO, Geneva. Available at:http://www.ilo.org/dyn/travail.
18. We will use “accelerator” to indicate both incubator programs that focus on seed-stage
19. N=47.
20. Veselin Kuntchev, Rita Ramalho, Jorge Rodríguez-Meza, and Judy S Yang. “What Have We Learned from the Enterprise Surveys
Regarding Access to Finance by SMEs?” World Bank Research and Working Papers, (2012).
21. All are either currently investing, or closed but launched since 2001. We refer to “funds” to indicate the unit of analysis for this dataset,
which includes both funds and products. The breakdown of funds by type was as follows: Closed-end Fund 63%, Other Private Equity
structure 15%, Open-ended Fund 6%, Fixed Income Product 5%, Captive Fund 5%, Philanthropic Fund 4%, Government fund 2%.
22. Emerging Markets Private Equity Association, 2012 EM PE Annual Fundraising and Investment Review, (2013).
38 Engines of Prosperity
23. N=78. About 50% of the sample had reached a ?nal close, while the rest were still open for investment. Includes only funds that reported
both target AUM and committed capital.
24. Milken Institute, Stimulating Investment in Emerging-Market SMEs: Financial Innovations Lab Report, (2009),http://www.milkeninstitute.
org/pdf/smelab.pdf.
25. McKinsey & Company and IFC, Two Trillion and Counting: Assessing the Financing Gap for Micro, Small, and Medium-size Enterprises in
Developing Countries, (2010),https://mckinseyonsociety.com/downloads/ reports/Economic-Development/Two_trillion_and_counting.pdf.
26. McKinsey & Company and IFC, Micro-, Small and Medium-sized Enterprises in Emerging Markets: How Banks Can Grasp a $350 Billion
Opportunity, (2012).
27. Small Business Banking Network, Small Business Financial Services Best Practices Benchmark, Capital Plus Exchange, (2012).
28. McKinsey and IFC, Micro-, Small and Medium-sized Enterprises in Emerging Markets .
29. CGAP, “Financing Small Enterprises: What Role for Micro?nance Institutions?” Focus Note No. 81, (July 2012).
30. Personal communication, MixMarket.
31. Harvey Koh, A. Karamchandani, and R. Katz, From Blueprint to Scale: The Case for Philanthropy in Impact Investing, (Monitor Inclusive
Markets, 2012).
32. JP Morgan. Perspectives on Progress, (2012),http://www.thegiin.org/cgi-bin/iowa/download?row=489&?eld=gated_download_1.
33. Sasha Dichter, R. Katz, H. Koh, and A. Karamchandani, “Closing the Pioneer Gap,” Stanford Social Innovation Review, Vol 7, (2013).
34. Koh, From Blueprint to Scale.
35. The World Bank, The Effect of Women’s Economic Power in Latin America and the Caribbean, (2012).
36. The Global Entrepreneurship Monitor, GEM Peru 2011 Report, (2012).
37. The World Bank, Growing Africa: Unlocking the Potential of Agribusiness, (2013),http://siteresources.worldbank.org/INTAFRICA/Resources/
africa-agribusiness-report-2013.pdf.
38. International Fund for Agricultural Development. “Viewpoint: Smallholder Farmers Can Feed the World.”
39. U.S. dollars in nominal terms, not adjusted for purchasing power parity (PPP).
40. Dalberg Global Development Advisors, Catalyzing Smallholder Agricultural Finance, (2012),http://dalberg.com/documents/Catalyzing_
Smallholder_Ag_Finance.pdf.
IRIS Metrics Referenced
IRIS ID Indicator Name IRIS ID Indicator Name
FP5958 Earned Revenue PD1516 Product/Service Detailed Type
FP8293 New Investment Capital PD3017 Product/Service Type
OD6855 Location of Organization’s Headquarters PD4565 Supplier Locations
OI3160 Full-Time Employees PI1492 Payments to Supplier Individuals
OI8869 Permanent Employees PI5350 Supplier Individuals
OI9677 Permanent Employee Wages PI9991 Supplier Individuals: Smallholder
ANDE Impact Report 2012 39
Photographs generously provided by:
John-Michael Maas/Darby Communications (page 18)
Low Carbon Enterprise Fund (page 24)
Inveneo (page 39)
Santa Clara University (page 4)
TechnoServe (pages 2, 6, 10, 12, 14, 19, 21, 22)
www.aspeninstitute.org/ande
Produced by the Aspen Network of Development Entrepreneurs © 2013.
Thanks to all the members who submitted vignettes, data and photos for this report.
Cover photo by TechnoServe

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