Covering the G-20’s major new economic initiative with a focus on social finance
Social finance – achieving positive social and financial returns together – is at the forefront of supporting the world’s small and medium sized enterprises (SMEs). Increasing the opportunities SMEs have to financing their own growth and success is by its very nature a socially beneficial pursuit: SMEs account for the majority of the world’s job creation and GDP, pull people out of poverty, strengthen communities and contribute significantly to economic stability. That is why the G-20, in partnership with Ashoka Changemakers, has sought out the world’s best ideas for unlocking financing for the world’s SMEs through the G-20 SME Finance Challenge.
The Challenge was an open call to the private sector to show how, despite the banking and finance sector’s reluctance to fund SMEs, investing in small and growing businesses can be both good business and good for society. Social finance organizations are already proving it. Entrants in the Challenge and innovators who are members of the Ashoka and Changemakers community demonstrate successful, pioneering solutions to increase SME access to financing all over the world. Some of them will be selected as winners of the SME Finance Challenge, will meet with the G-20 in Korea on November 11-12, and will have their solutions funded and scaled to achieve even greater impact.
Here are some potential angles and interviews for unique, interesting coverage of social finance, for the G-20 Summit and beyond:
Putting investment decision into the hands of entrepreneurs – Collective decision-making among groups of business owners has been a key success of micro-finance, but is not typically applied to SMEs. That is changing, and it’s empowering the entrepreneurs while also reducing seed money costs for investors.
Developing local capital markets – Identifying and supporting local fund managers is an important way to grow the investment sector in the developing world and advance the social impact goals of local entrepreneurs.
Local innovators tend to be good stewards of their environment and communities – For investors interested in social finance, SMEs are a natural magnet: often they are by their very nature eco-friendly, social justice-oriented businesses since their owners live, work, and employ workers there.
Finding and partnering with untapped investors – those with a clear stake – If the informality or lack of collateral of SMEs makes them generally ineligible for traditional banking, one option is to develop financing products at non-bank institutions with a stake in local SME growth.
Combining long-term investment financing with business education for entrepreneurs – Running a business – especially one that is about to make the leap from start-up to SME – requires training and skills. Having those skills can help significantly when making a case to potential investors and creditors.
Finding assets in SMEs that traditional banks have overlooked – Many farmers and producers do not have the collateral that banks typically require when considering lending, effectively shutting them out of any commercial loans. But they do have overlooked assets that can be used to leverage financing – especially for forward-thinking investors.
This is just a small fraction of the resources available through Ashoka and Changemakers. For further information and to access our global community of over 140,000 changemakers around the world, please contact: