IFD Mandate

MEDA's Investment Fund Development department assembles private capital and invests it for the benefit of the poor. We create the investment instruments to assemble such capital; we create the investment vehicles to channel that capital to developing economies, and we manage that capital for the mutual benefit of the investor and the poor.

 

 

IFD Approach

We leverage partnerships, innovate through the creation of new and modified investment vehicles for channeling investments to developing economies, and establish mutually beneficial relationships for the investor and the poor.

Over the past 25 years, microfinance has become a development success story. Today more than 12,000 microfinance institutions provide capital to as many as 50 million entrepreneurs around the world, more than half of which are women. Many of these entrepreneurs report that access to capital has allowed them to double their family income and to grow their businesses at rates that quadruple those of counterparts who do not have access to savings and credit services.

However, the unmet demand is huge. It is estimated that at least 90% of eligible self-employed entrepreneurs still lack access to microfinance.

IFD’s Three-Phase Business Development Model

MEDA has consistently worked at international development investment, with a mission to establish private investment as an effective solution to global poverty. 

We recognize that investing in developing economies is risky – especially for those who are too far away to provide good oversight. MEDA has adopted a classic business development model involving three phases of work, seeking to enhance the risk-adjusted rate of return to prospective investors.

Phase I		Research and Development – MEDA designs and tests new business solutions to poverty. This work is generally paid for by donations to MEDA.
Phase II		Early Stage Investment – MEDA invests in innovative ventures with a high potential for financial success and social benefit, with capital being sourced from the two venture capital funds that we manage – MEDA’s Sarona Risk Capital Fund, and the privately owned Sarona Risk Capital Fund I LP.
Phase III		Private Investment – MEDA invites private investors and commercial capital markets to invest in companies that exhibit an attractive risk-adjusted rate of return.

Through these initiatives, MEDA seeks to move an incremental $100 million in private capital to developing economies every three years.