MEDA in the News

MicroVest keeps capital flowing to micro-entrepreneurs

MicroVest ClientSource: "This Firm Keeps Capital Flowing to Micro-Entrepreneurs" by Jessica Pothering on the Entrepreneur

The global financial crisis didn't dent the demand for loans from small businesses and micro-entrepreneurs around the world. But it sure whacked the supply of capital available to lend to them.

MicroVest, a Bethesda, Md.-based for-profit asset management firm owned by three non-profit organizations, treated the challenge as an opportunity to re-engineer its financial offering so it could continue to make debt capital available to microfinance institutions in 66 developing-world countries.

Since September 2010, its new fund has raised $74 million and, by MicroVest's count, has impacted more than 3.5 million people in the developing world who have been served by the banks MicroVest lends to. More than half of the borrowers are women. All told, MicroVest has nearly $300 million under management.

"Investing in under-banked markets is the best way to reduce poverty on a global scale," says Gil Crawford, MicroVest's CEO and a strong proponent of a commercially-minded approach to social impact.

"The financial organizations we invest in share our belief that this is the best way to promote financial inclusion and empower the productive poor," Crawford adds.

Investors had been skeptical of MicroVest's first fund when it launched in 2003. Microfinance was not yet an established investment category. Some investors were confused by the hybrid debt-equity structure. "Investors want you to fit into one bucket or another," says David Wedick, MicroVest's director of strategic operations and business development.

At the time, MicroVest's chairman, Bowman Cutter, told The Wall Street Journal that raising MicroVest's first $15 million was more difficult than the last $15 billion he helped raise for private equity firm Warburg Pincus.

MicroVest's record helped show that institutions that lend to small- and micro-enterprises can be a solid financial bet. That first fund achieved mid-single digit returns for its investors and gave MicroVest a customer list of credit-worthy financial institutions with an ongoing demand for capital that MicroVest could continue to supply.

Microvest is largely owned by the relief agency CARE, the Mennonite Economic Development Associates (MEDA) and the Cordes Foundation, established by Ron Cordes and his wife, Marty. Other investors include the Omidyar Network, the Clara Fund and the KL Felicitas Foundation.

"We believe we deliver strong returns in this sector not despite but because of our focus on social impact," says Cordes, a founder of AssetMark Investment Services. "The financial institutions that deliver the best long-term performance are the ones who are focused on delivering products and services that empower their clients to live better, more productive lives."

That impact focus drove MicroVest to find a way to attract new kinds of investors. Some institutions and individuals were on board to support microfinance, but needed additional liquidity, the ability to withdraw their money more easily than MicroVest's traditional fund structure would allow. In MicroVest's "perpetual life fund" investors need not commit their capital for years at a time; they can pretty much come and go as they please. (MicroVest marks the value of the fund on a monthly basis.) The Calvert Foundation contributed a key slug of the $7 million to launch the perpetual life fund in 2010.

"We and other similar investors are attracted to perpetual life offerings as they provide us with flexibility in the management of our capital -- both to make additional investments as capital is available and to take distributions as well," Cordes says.

Increased liquidity effectively lowers risk and thus boosts MicroVest's risk-adjusted returns. MicroVest is now expanding beyond its early impact investors who had accepted higher risk as MicroVest built its track record. Crawford is seeking to attract traditional institutional investors and wealth managers focused solely on risk, return and liquidity. Many investors still equate social metrics with charity. Yet more than dozen financial advisory firms have approved MicroVest's funds on behalf of their clients.

"We have earned our place at the table," Crawford writes in a report on MicroVest's plans for the next 10 years. "We are asking impact-agnostic investors to tell us why our funds don't fit in their current portfolios."

Impacts

Financial
MicroVest has raised five funds since its launch in 2003 and has grown to nearly $300 million in assets under management. Its first fund, Microvest I, achieved financial returns in the mid-single digits.

Social
Capital from MicroVest's perpetual life fund has reached more than 3.5 million people, through the financial institutions to which MicroVest lends. Over half of the borrowers are women.

Produced by ImpactAlpha and the Case Foundation.

One of a series of impact profiles produced in conjunction with the Case Foundation's new publication, "A Short Guide to Impact Investing." 

A Reflection Upon Winning Canada’s 2014 Social Finance Awards

Source: "A Reflection Upon Winning Canada's 2014 Social Finance Awards" by Jason Dudek, Chairman & Chief Financial Officer, Mountain Lion Agriculture on SocialFinance.ca

MLA EmployeesWhat does winning Canada's 2014 Social Finance Awards alongside MEDA mean to Mountain Lion Agriculture? We feel deeply honoured by this recognition of our work – the field of nominees was excellent, a testament to the strength of Canada's growing impact investment and business sector. The award greatly bolstered the morale of our staff but is also a deeper recognition of the rising, demonstrable efficacy of impact investment and business in tackling the toughest problems with resilient, sustainable solutions.

The 2014 Social Finance Award recognizes Mountain Lion Agriculture during a critical time for our business, and for the farmers and consumers we serve in Sierra Leone. The ebola outbreak which has made international headlines continues to wreak havoc upon Sierra Leone's healthMLA loading rice system, economy and people.

In this context, the fact our company and business model is defined by a social purpose has been instrumental in enabling us to continue our work. In fact, during the ebola outbreak we are having a record year in terms of production and the number of smallholder farmers we have assisted. With the strength of business thinking on the one hand, and the centrality of purpose usually associated with a non-profit/charity on the other, we have persevered despite the immense challenges facing our staff and company during the crisis.

This synthesis of business and purpose also enables us to provide a unique solution to the acute food security crisis caused by the ebola outbreak in Sierra Leone. The problem is clear: Agriculture Minister Joseph Sam Sesay reported in late 2014 that the agriculture sector of the economy "has been deflated by 30% because of ebola" while closing borders and reduced shipping are making it difficult for food imports to reach Sierra Leone. Yet if relief aid agencies and donors invest resources in food security by indiscriminately importing grains, they will stem short-term supply shortages but may damage long-term efforts by Sierra Leonean farmers, traders, and domestic businesses to service the country's demand for rice.

In contrast, Mountain Lion Agriculture is working with local producers, paying market prices for their raw rice, processing it locally and finally selling competitively priced, finished rice locally. We are enhancing livelihoods in communities hit hard by the ebola crisis, strengthening the country's agricultural sector, and delivering food rapidly while creating local employment – all on a sustainable, profitable basis.

In addition to this, Mountain Lion Agriculture has been providing families suffering from ebola with our rice as food aid, at no cost, as a new CSR program complementing our existing impact business model. These efforts have been widely recognized by local Sierra Leonean media outlets, including newspapers such as Awoko. This CSR was initially made possible through the ongoing support of our farmer friends in Greenfield, Illinois – an outstanding, hard-working community which has been highly supportive because of our business-based approach and problem solving.

Impact businesses – which MaRS, The Africa Enterprise Challenge Fund and other forward-thinking institutions are working hard to facilitate – have unique strengths that make them a powerful vehicle for solving long term, complex problems. The 2014 Social Finance Award is an important recognition of this, and the fact that as an impact-business we are helping to lead the fight against the long-term damage caused by the Ebola crisis with the support of our partners.

We therefore invite foundations, donors and investors to consider impact investment and business as a step towards a future where the power of our economy is harnessed to solve problems rather than create them – by uniting purpose with profit. 

Canada addressing poverty through nutrition

Source: "COLUMN: Addressing poverty through nutrition" by Lois Brown in the Aurora Banner (yorkregion.com)

We all know of the pivotal role nutrition plays in improving the health of the most vulnerable in developing countries.

Nutrition is at the centre of Canada's top development priority — improving the health of mothers, newborns and children — and will be a key focus of Canada's commitment to this cause from 2015 to 2020.

When women have access to proper nutrition, it improves not only their lives, but also the lives of their families and communities. The ripple effect extends to creating healthier communities and providing a foundation that allows economies to flourish.

Without sustainable economic growth, there will be no lasting solution to poverty.

This is why Canada has long been a champion of improving nutrition.

Nutrition was a key pillar of the Muskoka Initiative on Maternal, Newborn and Child Health that Canada launched in 2010 and at the Saving Every Woman, Every Child Summit in Toronto this past May.

With our partners, Canada has made a significant difference in the global fight to improve nutrition. Canada has been a strong supporter of the Scaling Up Nutrition program and we are the largest donor to the Micronutrient Initiative — an organization that works to eliminate vitamin and mineral deficiencies in the world's most vulnerable populations.

The initiative is the largest supplier of vitamin A supplements to developing nations — vitamin A significantly reduces child mortality and blindness.

It is also working to reach the last 30 per cent of households with no access to iodized salt, because iodine is a key micronutrient in the improvement of cognitive function and in the development of healthy brains.

The initiative is a leading supplier of zinc, which reduces the harmful effects of diarrhea; iron, which decreases anemia; and folic acid, which helps people absorb nutrients from the food they eat. This Canadian organization, in partnership with others, has contributed to saving about three million children's lives over the past 15 years.

The Canadian Foodgrains Bank is another Canadian success story.

Combining grain donations from Canadian farmers and financial donations from churches and individuals, as well as project funding from your Canadian government, this organization feeds more than one million people every year.

Leading Canadian agricultural organizations, such as Mennonite Economic Development Associates, the Canadian Hunger Foundation and USC Canada, are all working to improve food security and nutrition by biofortifying crops — adding life-saving micronutrients to family diets.

They are doing this in environmentally sustainable ways — by selecting locally adapted resilient crops that require minimal technology to grow.

We must ensure that nutrition remains a central commitment in Canada's global efforts. I am confident that we can build on lessons learned to improve co-ordination, scale up our efforts and work effectively to save lives around the world. 

Chris Steingart builds websites and life

Chris SteingartSource: "Chris Steingart builds websites and life" by Dave Rogalsky in the Canadian Mennonite (In print)

Late last year, Mennonite Economic Development Associates (MEDA) presented its inaugural 20 under 35: Young Professionals Changing the World Awards, honouring these young adults from Canada and the U.S. for their "faith, entrepreneurial spirit and service" Ethan Eshbach, coordinator of engagement initiatives for MEDA, explains, "20 under 35 connects the values behind MEDA's work around the world to those of young professionals here in North America. From entrepreneurs to business professionals to community advocates to church leaders, we have a very impressive mix" Over the next few issues, Canadian Mennonite will be featuring profiles of all six of the Canadian winners, fivefrom Ontario and one from British Columbia.

Chris Steingart has been running his QT Webdesigns business from his home in Kitchener for the past eight years. Besides designing and building websites, QT also hosts websites, and does brand and identity development. The "QT" stands for Quality Transformations.

Steingarts "commute" to work got a bit longer lately, after he and his wife Jillian added Maya in December to two-year-old Rowan. Now his office has been relegated to the basement.

While he builds for anyone interested, he has done a lot of work for congregations and Mennonite church-related institutions, including Mennonite Church U.S.A., Silver Lake Mennonite Camp in Ontario, and MennoMedia's new Shine curriculum. Congregations include a number of United churches as well as Rockway, Shantz, Waterloo-Kitchener and Breslau Mennonite churches.

Breslau Mennonite is where the Steingarts call home. Having worked as a youth pastor at Waterloo-Kitchener Mennonite before a period of teaching English in South Korea and getting QT off the ground, Steingart thinks he understands congregational and Mennonite culture in order to build sites that better fit their needs. The ethics and beliefs of these institutions inform how he does business.

Working from home allows him to support his spouse better and spend time with his children, while at the same time serving the church and community. He likes the flexibility of being able to break his day into sections based on other needs for himself and his family.

Steingart has depended on word-ofmouth advertising. One website for a realtor in Ottawa resulted in a dozen jobs there. After eight years, he is also getting repeat business. He thinks that websites need to be renewed every two to five years, depending on how quickly a business is evolving and changing. Some renew much more often; Vigor Clean Tech of Petersburg, Ont., changes its site yearly.

Being one of the 20 under 35 winners has resulted in more visibility for Steingart, both due to MEDA's publicity and the convention announcement, but so has local media's coverage of some of the local winners.

"Clients saw the coverage and it reminded them to get in touch," he says with a laugh. He feels the acknowledgement validates his work and his relationships. 

Dalhousie, McGill, Jimma and MEDA to boost agricultural education in Ethiopia

Source: "McGill, Dalhousie to boost agricultural education in Ethiopia" on McGill University's website

A traditional Ethiopian coffee ceremony held to celebrate ATTSVE launchMcGill's Faculty of Education and the Institute of Gender, Sexuality and Feminist Studies have joined the lead partner, Dalhousie University, to embark on a 6-year, $18 million project to help Ethiopia enhance their colleges' Agricultural Technical and Vocational Education Training (ATVET) programs. Key to McGill's involvement in the project will be to foster and support gender equality, diversity and inclusiveness.

As Dr. Claudia Mitchell of McGill's Faculty of Education and her team found in the Project Implementation Mission, the current enrollment of female students, staff and instructors in ATVET programs is relatively low while attrition and turnover rates remain high. Equity and diversity will be addressed through a participatory approach to gender mainstreaming, including the establishment of Gender Offices, with trained personnel, in the four participating ATVETs at Maichew, Nejo, Woreta and Wolaita Soddo, and through training targeting ATVET administration, instructors and technical staff. In addition a Gender and Leadership Community of Practice will be established.

Agriculture forms the base of the East African country's economy. The most populated landlocked country in the world, Ethiopia's 88 million inhabitants rely on agriculture for 80% of their total employment and 84% of their exports, while agriculture accounts for only half of their gross domestic product. Soil degradation, overgrazing, deforestation and poor infrastructure are contributing factors.

The project aims to help move Ethiopia towards a market-focused agricultural system better poised to support the country economically, while meeting the needs of both male and female farmers and youth, and the agriculture industry.

The Agricultural Transformation Through Stronger Vocational Education (ATTSVE) initiative is funded by the Government of Canada's Department of Foreign Affairs, Trade and Development, and partners McGill with the Faculty of Agriculture at Nova Scotia's Dalhousie University; the Mennonite Economic Development Associates of Canada; and the College of Agriculture at Jimma University, Ethiopia. 

Dalhousie's Bible Hill agricultural campus joins Ethiopian project

Source: "Bible Hill agricultural campus joins Ethiopian project" by Aaron Beswick Truro Bureau in the Herald News

Bible Hill is teaming up with Ethiopia.

Well, it's actually a bit more complicated than that.

Dalhousie University's agricultural campus in Bible Hill will be administering an $18-million program funded by Foreign Affairs, Trade and Development Canada to improve agricultural education in Ethiopia.

The program, called Agricultural Transformation Through Stronger Vocational Education, touts itself as one of the first steps in moving Ethiopia's farming community from a subsistence one to a market economy.

"A better trained farming community is our main goal," Solomon Demeke, a professor at Ethiopia's Jimma University College of Agriculture and Veterinary Medicine, said Monday.

But to get a better trained farming community, Ethiopia first needs better agricultural and technical colleges.

That is where Bible Hill comes in.

Along with funding directed toward the physical infrastructure of four Ethiopian agricultural and technical colleges, the program will also be about teaching the teachers.

"So it will be about institutional strengthening, improving instructor training, networking and linkages between the colleges and the private sector," project co-ordinator Hannah Pugh said Monday.

Agricultural campus experts, along with those from McGill University in Montreal and the Mennonite Economic Development Associates of Canada in Waterloo, will travel to Ethiopia to provide training.

"This is a partnership approach and there (are) also opportunities for Ethiopians to come to Canada," said Pugh.

"So we hope to learn as much from them as they do from us."

This is the biggest international project the agricultural campus has ever been in charge of.