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What Challenges Does Innovation For Global Development Face?

I recently participated in a TwitterChat hosted by KickLoans, a peer-to-peer microlending platform that works toward financial inclusion. I was joined by a variety of philanthropic organizations, small business owners, and interested actors from across the globe to discuss the intersection of innovation, global development, financial inclusion, and technology. In my role at The Rockefeller Foundation, I’m particularly interested in how we marry these concepts within the realm of finance, and there’s been no shortage of organizations looking to tackle this problem.

During the chat, we were asked, what challenges does innovation for global development face?The responses were varied, complex, and incredibly interesting. However, I noticed three major solutions emerging that resonated with me—fitting squarely with work The Rockefeller Foundation has engaged in, and learnings we hope to glean.

1. Support small business growth through knowledge management and adequate training

In previous posts, we have discussed the importance of supporting impact enterprises—”enterprises that intentionally seek to grow and to sustain financial viability, realize increasing social impact, and influence the broader system in which they operate.” While many stakeholders have been focused on generating more capital from varied sources, there’s also a need to look at the recipients of capital, namely the businesses that will develop products, services, and solutions for the poor or vulnerable, and how they continue to grow. Within this project, we used accelerators to examine how strategies for enterprise growth are codified and communicated and examined different models available to support this evolution. Our objective is to figure out where we can innovate these platforms, help scale enterprises, and disseminate our learnings to other funders of this important work.

2. Continue to build and support platforms as a conduit for sharing ideas and resources

At the Foundation’s seminal convening of impact investing thinkers, innovators, and stakeholders at Bellagio in 2007 began a sharing of ideas on how to shape this growing field. These experts included individuals that aggregate capital, as well as those that use it—individuals that orchestrate financing and those that benefit most from it. Similar convenings hosted by many of our partners, such as the G8 Task Force on Impact Investing, provide opportunities to share how we shape new movements. Equally important in this model, however, is how innovators and investors connect with one another. The effort toward sustainable finance models requires innovators to align with the right type of interested party, both in terms of objectives and type of capital. Ennovent offered its own platform as an example, an effort to connect entrepreneurs with mentors, and keep up to date on new business opportunities.

3. Embrace philanthropy’s role as a provider of risk capital

Philanthropy must do what it does best

The role of The Rockefeller Foundation as a provider of risk capital has been a critical part of our programming for many years. Whether it was providing credit enhancement through the Alliance for a Green Evolution (AGRA), guarantees for pilot social impact bond projects in the United States, critically needed operational support to scale impact investing intermediaries, or the growing catalytic role that our Program Related Investment (PRI) portfolio plays in financially scaling new opportunities, we have acknowledged the importance of surfacing and testing new innovative finance solutions.

Check out the full Storify to read more of the questions and ideas from the chat:

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