Competition News
Congratulations to Affinity MacroFinance, the Early Entry Prize Winner!!!
The Group of 20 and Ashoka’s Changemakers, with support from the Rockefeller Foundation, are looking for the best models worldwide that catalyze finance for small and medium enterprises (SMEs). This challenge is open to all private sector participants, including private financial institutions, private investors and companies, socially responsible investors, foundations, and civil society organizations.
Submit your solution, or nominate a project, to the G-20 SME Finance Challenge for how to unlock private finance to small and medium enterprise on a sustainable and scalable basis.
The final competition deadline is September 5, 2010.
Up to 15 competition winners will be announced on Changemakers.com on October 29. On November 11, the focus moves to Korea - site of the G-20 Summit and the showcase for these competition-winning ideas. The event will also feature the announcement of Changemakers' People's Choice Awards, as determined by community vote.
Winners will also be connected with donors and investors at an SME conference in Germany following the Korea Summit.
The G-20 is collectively committed to mobilizing the public share of the funding needed to implement winning proposals from development banks and interested bilateral donors. IFC and the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank and the European Bank for Reconstruction and Development have all indicated their support for implementing scalable and sustainable SME financing proposals, including those from the Challenge, in partnership with the private sector. For the United States, the Overseas Private Investment Corporation (OPIC), has indicated an intention to offer project support (financing and insurance) in concert with U.S. private investment.
Proposals should address one or more of these objectives:
- Catalyzing debt finance for SMEs (e. g., local bank lending, supply chain finance, debt issuance) along with related financial services;
- Mobilizing equity or quasi-equity investments in SMEs;
- Building the capacity of financial institutions, related financial infrastructure, and any technical finance-related SME assistance needs;
- Developing regulatory and policy best practices that facilitate SME finance;
- Addressing gaps in financial market infrastructure to reduce search costs for creditworthy SMEs with growth and profit potential;
- Expanding SME finance access in fragile and weak states; and
- Addressing the particular barriers confronting women entrepreneurs seeking SME finance.
Download an entry form to preview and prepare your answers before submitting them online.
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Welcome Letter
Dear Changemakers Community,
Small and medium enterprises (SMEs) play a major role in economic development, particularly in emerging economies. SMEs are the single largest contributor to employment and job creation, and account for a significant share of GDP around the world.
Yet lack of access to finance is a major obstacle to these firms’ growth. It is estimated that less than 20 percent of small firms in low-income countries have access to credit. SMEs are often too small to attract commercial bank or investor interest, but too large to benefit from microfinance products. To date, few scalable solutions to support this “missing middle” tier of businesses have been found.
In Pittsburgh, Leaders of G-20 countries called for a focus on this problem as a key means of expanding opportunities and creating jobs for the poor. They committed to launch the SME Finance Challenge – a call to the private sector to put forward its best proposals for how public finance can maximize the deployment of private finance on a sustainable and scalable basis. The goal of the Challenge is to identify catalytic and well-targeted public interventions to unlock private finance for SMEs. Maximizing leverage of scarce public resources is at the core of the Challenge.
Interventions could take a variety of forms, including policy or regulatory changes, strengthening market infrastructure, capacity-building assistance for SMEs or those financing SMEs, or public-private risk-sharing initiatives. The aim is to: (1) identify the most successful pilot projects, (2) scale them up, and (3) spur their wider adoption by a broad range of private and public finance providers.
Up to 15 submissions will be selected as winners. Challenge winners representative of all regions (Africa, East Asia and the Pacific, Europe and Central Asia, the Western Hemisphere, Middle East and North Africa, and South Asia) will be invited to the November 2010 G-20 Summit in Korea to be recognized for their innovative ideas. Winners will then be connected with donors and investors at an SME conference in Germany following the Korea Summit.
If you win this Challenge, the G-20 will work with you to help implement your proposal. The G-20 is collectively committed to mobilizing the public share of the funding needed to implement winning proposals from development banks and interested bilateral donors. IFC and the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank and the European Bank for Reconstruction and Development have all indicated their support for implementing scalable and sustainable SME financing proposals, including those from the Challenge, in partnership with the private sector.
The form of funding available will depend upon the requirements of winning proposals, and may include grants for technical assistance or capacity-building, risk sharing or first-loss capital, mezzanine capital, and investment capital.
We thank you for your time and look forward to reading your proposals.
Guidelines and Criteria
The G-20 SME Finance Challenge is open to all private sector participants, welcoming proposals from private financial institutions, private investors and companies, socially responsible investors, foundations, and civil society organizations. Proposals may be submitted as collaborations among eligible organizations. Private sector participants are welcome to enter solutions that reflect private and public sector collaboration. Any entity (and its affiliates) involved in the judging process is not eligible to submit a proposal.
All proposals received from eligible participants will be considered, provided they:
- Reflect the theme and objectives of the G-20 SME Finance Challenge;
- Demonstrate efficient solutions to leverage public interventions to maximize private financing for SMEs;
- Demonstrate success and sustainability in practice;
- Demonstrate impact in at least one of the six regions (Africa, East Asia and the Pacific, Europe and Central Asia, the Western Hemisphere, Middle East and North Africa, and South Asia); and
- Are submitted in English, Spanish, French, or Portuguese.
Please complete the entire entry form and submit before September 5, 2010 at 5:00 PM EDT.
Assessment Criteria
The winners of the G-20 SME Finance Challenge will be those that best meet the following criteria:
Innovation: The entrant must describe a systemic and/or transformational solution that is not now widely applied but which has demonstrated potential for unlocking large-scale private financing for SMEs. Proposals should target SMEs with a focus on the small end of the spectrum.
Leverage: Winning entries will propose solutions that maximize the leverage of scarce public resources in catalyzing private finance.
Social and Economic Impact: Proposals must have a track record with measurable results. They must have a clear, measurable financial access impact, demonstrated by results from pilot or other empirical testing. They should credibly estimate the number of underserved SMEs that could be reached over a designated time frame, the volume of private SME finance that could be catalyzed, the amount of finance that would be available to individual targeted SMEs, the new markets and areas to be served by the proposal, and the potential for job creation (where possible).
Sustainability and Soundness: Proposals must credibly demonstrate their potential to be scaled up and sustained over the long-term as public support is phased out. Proposals must have a realistic time frame for implementation. If public finance is required to implement the proposal, it must be suited to the technical, legal, and financing capacity of the international financial institutions (e.g. The World Bank and regional development banks) and bilateral financing institutions (DFIs). Proposals must also meet policy and regulatory standards for safe and sound financial systems and for the prevention of money laundering and terrorist financing.
Award Structure
Early Entry Prize: The best entry submitted by 5:00 PM EDT, August 6, 2010 will be eligible to win a US$1000 prize awarded by Ashoka's Changemakers. Being an Early Entry Prize winner does not preclude you from winning the challenge in any way, or guarantee finalist status-all entries will be equally evaluated per the Changemakers criteria at the completion of the entry period.
G-20 SME Finance Challenge Winners: On October 27, the panel of expert judges will select 12-15 winners from the entire Challenge. Challenge winners, including at least one solution from each of six regions (Africa, East Asia and the Pacific, Europe and Central Asia, the Western Hemisphere, Middle East and North Africa, and South Asia), will be invited to the G-20 Leaders Summit in Korea November 11-12, where they will showcase their ideas.
The G-20 will work with the winners to help implement their proposals. The G-20 is collectively committed to mobilizing the public share of the funding needed to implement winning proposals from development banks and interested bilateral donors. IFC and the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank and the European Bank for Reconstruction and Development have all indicated their support for implementing scalable and sustainable SME financing proposals, including those from the Challenge, in partnership with the private sector.
The form of funding available will depend upon the requirements of winning proposals, and may include grants for technical assistance or capacity-building, risk sharing or first-loss capital, mezzanine capital, and investment capital.
People's Choice Winners After the judges select the 12-15 winners, the Changemakers online community will vote for three "people's choice winners." Voting will take place October 29 - November 8, 2010 and the three winners with the most votes will be recognized on Changemakers.com and at the Korea Summit.
Disclaimer-Compliance with Legal Restrictions
Ashoka complies fully with all U.S. laws and regulations, including Office of Foreign Assets Control regulations, export control, and anti-money laundering laws. Any grants will be awarded subject to compliance with such laws. Ashoka will not make any grant if it finds that to do so would be unlawful. This may prohibit awards in certain countries and/or to certain individuals or entities. All recipients will comply with these laws to the extent they are applicable to such recipients. No recipient will take any action that would cause Ashoka to violate any laws. Additionally, Ashoka will not make any grant to a company involved in the promotion of tobacco use.
News: Canadian Prime Minister pledges $20M from Canada to scale-up the winning solutions
