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An equity fund focused on poverty? Sounds odd, I know. But Chris Brookfield, who managed funds for Unitus, and his partners at Elevar said today they have raised $70 million to invest in companies providing services to people at the bottom of the economic ladder. Elevar told me a bit about the fund last June.

Seattle-based Elevar will invest in companies involved in microfinance and other services targeted at the working poor in countries such as India, Mexico, the Philippines and Peru.

Elevar is the second fund of Unitus Equity Fund, initially run as a for-profit arm of Unitus, a Seattle-based non-profit organization. Elevar is now independent of Unitus, though it remains a strategic partner, Brookfield said.

Besides microfinance, Brookfield said Elevar will also seek to invest in financing low income housing, agriculture and information services. The idea is to bring more commercial capital into development.

Improving incomes of billions of poor people -- the so-called "Next 4 Billion" -- has benefits for companies here, too. Economic growth in developing countries "is the strongest opportunity for long-term business growth," according to this report by the IGD, since the poorest two-thirds of the world's population represent $5 trillion in purchasing power. The more development can be supported through investment, the less dependent countries will be on foreign aid. The majority of poor countries don't attract much private investment, so it will be interesting to see whether a socially motivated fund can create a path for it.

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Kenyan farmers can now insure some of the costs of growing crops against bad weather by using mobile phone technology that links solar-powered weather stations to an insurance company. 

Farmers can cover the cost of seeds, fertilisers and pesticides at local agricultural supply shops by paying an extra 5% of their value. 

If their harvest fails due to bad weather they are reimbursed and can plant again. 

For now, the policy only covers wheat and maize and is available for the agricultural inputs of Syngenta and two Kenyan partners supplying seeds and fertilizer not sold by the Swiss agrochemicals company. The companies in turn subsidise some of the insurance costs. 

"Last year, when I took out the insurance policy, we had a total crop failure. The crop didn't even reach the flowering state, it dried up," said Jane Gathoni Simon, a maize farmer who took part in a pilot programme last year. 

"But at the end of the year we were compensated. I managed to get the (replacement) seeds in time and planted." 

Food prices rocketed in much of east Africa in 2008 and 2009 after a succession of failed rains hit staple crops such as maize. 
The region is now being deluged by above normal rainfall, causing widespread flooding in many areas. 

On purchase, dealers use a camera phone to scan a barcode that automatically registers the policy with Kenyan insurance provider UAP over Safaricom's mobile phone network. 

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Like most urban dwellers, I too live in an apartment complex with the associated service suppliers, two of them being my household help and the couple who iron my clothes (in perfect crease) every week. My household help's daughter works alongside while her cousin is practising as a lawyer in Australia; the ironing lady's son is midway through a degree course in information technology. Both families are clear that the next generation will not be in any way associated with the professions of their parents.

Over the last decade, when economic growth acquired a new trajectory, particularly in the five years ended 2007-08 when growth averaged almost 9%, you would have heard this anecdotal tale of social change over and over again. It is no coincidence; instead, it is a facet of the opportunity that the explosion in India's growth process has provided to various demographic segments.

More importantly, they are also part of the growing tribe of new stakeholders. It is my case that they are an outcome of the melding of some game-changing norms in society, such as the empowerment of the backward classes through the implementation of the Mandal Commission report and the opportunity that such rapid economic growth creates. It is an aspect of the political economy of the emerging India: the challenge to status quo and the growing number of stakeholders with a keen desire to uphold the system that gave them an opportunity.

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With increased competition for customers and the need to grow income streams, most banks are now setting up outlets in Western Kenya.

And to ensure an uptake of their products, these institutions are struggling to wipe out the negative attitude towards bank loans from the minds of the region's inhabitants.

Fierce fight

Over the recent past Kakamega Town has been the centre of fierce competition amongst banks with each opening up more branches.

But despite growing demand for other banking services, uptake of loans has been slow yet borrowing to start income generating activities has been advocated as one way of breaking the vicious poverty cycle among rural communities.

Family Bank which last week opened a branch in the town reported the disappointing story.

The bank's chief executive officer Peter Kinyanjui says despite establishing a strong presence in the town over the last two years, the number of clients turning up to borrow money has remained low.

"We are offering flexible lending terms besides other financial advisory services to ensure out clients are prepared to use the loans correctly to be able to repay the money but the number of those turning up to borrow remains low," said Mr Kinyanjui.

Borrow cash

Kakamega DC Chege Mwangi said very few applicants had turned up to borrow cash released by the government for the Youth and Women enterprise funds through intermediary financial institutions.

"There is generally a culture of fear that if those borrowing the money do not repay, the banks will eventually sell their land after they have presented their title deeds as collateral," he said.

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The weekly HIV clinic is teeming with patients of all ages, from babies to grand-parents.

A health care worker is questioning one of them about their social and economic background.

He writes down an increasingly grim litany.

Education - none, job - none, children - many, rooms in mud hut - too few.

It is clear that these are people in need.

In Malawi, one in eight adults are infected with HIV.

But drugs alone may not be the answer to this deadly scourge.

Care in the community

In Neno, a remote area in southern Malawi, poverty and HIV are both rampant.

People here are obviously very poor. It is the recipe for a major health crisis, one that is far beyond the resources of the government to cope with.There are clutches of straw roofed huts, neglected villages and abandoned crops.

But in the last three years, they have joined forces with Partners In Health (PIH), a social enterprise dedicated to providing quality health care to the world's poorest people.

PIH believes that social factors are as important as medical ones.

They do not just offer medical care, but practical help as well. They argue that the poor need food, homes, work and education in order to stay healthy, not just tablets and surgery.

This means that a lot of their work does not take place in hospitals, but out in the community...

Food enterprise

PIH also helps patients get jobs.

But with little formal employment, they have to do this by giving them grants to set up their own businesses. 

In a nearby town, a group of 15 women recently set up their own restaurant with the support of PIH.

They are former prostitutes, and all are HIV positive.

The women, all on anti-retroviral medication, wanted a business, not only to provide money to live on, but to give them a sense of pride in themselves.

Good food is essential for HIV positive patients, but the local diet is generally poor.

The staple food is "sima", a maize flour mixed with water.

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Rebuilding Haiti after its catastrophic earthquake should generate major contracts for private companies specializing in construction, logistics, transport and security, but U.S. executives say they need a clear reconstruction strategy to shape their business plans.

Private sector firms that focus on post-conflict or disaster relief operations gathered at a meeting in Miami this week to consider the business opportunities offered by Haiti's recovery from the January 12 quake that devastated the capital Port-au-Prince and surrounding towns.

With Haiti's government saying up to 300,000 people may have died, some economists are calling the Haitian quake the deadliest natural disaster in modern times. Relief experts and business leaders agree the mammoth task of rebuilding what was already the Western Hemisphere's poorest state will be impossible without private sector participation.

"I don't think they have any option but to get private companies in to help reconstruct Haiti," Kevin Lumb, CEO of London-based Global Investment Summits Ltd, which organized the Haiti Reconstruction meeting in Miami, told Reuters.

"I think it opens up a great deal of business opportunities. Most of their infrastructure is destroyed, their roads, communications, buildings, it's obviously affected water supply, electricity, so that all needs rebuilding," Lumb said.

The Miami summit was also organized by the International Peace Operations Association, a trade group of companies working in conflict, post-conflict and disaster zones.

IPOA President Doug Brooks cited $13 billion to $14 billion as estimates of the scale of damage inflicted by the Haitian quake, which could provide some measure of the business opportunities created by the reconstruction effort.

Brooks called the Miami meeting a "nuts and bolts conference" bringing together service providers, major humanitarian groups and other stakeholders in Haiti's rebuilding. The aim was to fit needs to potential contract opportunities ahead of an international donors' conference for Haiti scheduled for March 31 in New York.

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Over half of the worlds agricultural producers are women, yet men still receive more and better training. A report released today highlights the need for agricultural and enterprise training for women smallholders to ensure poverty is reduced in developing countries. 

'Training for Rural Development: Agriculture and Enterprise Skills for Women' is the first report issued by the City & Guilds Centre for Skills Development (CSD) that focuses on rural development. It investigates the kinds of training that empower rural women to respond successfully to the key challenges they face such as low literacy levels and multiple domestic obligations, and demonstrates the appropriate training that needs to be implemented. 

Research shows that giving women farmers the same inputs and education as men could increase yields by 20% ; despite this women continue to receive only a small proportion of the appropriate training compared to men. CSD's report has been launched in response to growing concern around the lack of skills development for women smallholders. By bringing together existing literature on the challenges women face and drawing out lessons from successful projects in India and Ghana the report makes key recommendations for training going forward that is tailored to suit women.

The recommendations propose a more focused approach to training ensuring that projects effectively engage with women and their current challenges, use existing community structures, introduce new skills in manageable stages and work with local government structures to ensure long term change. 

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Business people are more virtuous than some might think, according to a new report.

Nearly half of entrepreneurs said that creating jobs or making a difference socially or environmentally was a primary driver for setting up their venture, many more than official estimates, according to interviews with 2,100 entrepreneurs compiled by Delta Economics and IFF Research.

According to the Office of the Third Sector, there are only 62,000 social enterprises in the UK - businesses with primarily social objectives, whose surpluses are primarily reinvested for that purpose rather than returned to shareholders or owners.

However, according to the Delta and IFF report, 21 per cent of the companies it interviewed could be classified as social enterprises, meaning that there could be 232,000 social enterprises operating in the UK.

Rebecca Harding, managing director of Delta Economics, said these "hidden" social enterprises were profit companies who created wealth and value far beyond the levels that were currently included in official estimates.

"There is no need to compromise growth or profitability for the sake of doing something to make a difference," she said.

One of those highlighted in the report as a hidden social enterprise is Minara Foods, a Manchester-based manufacturer of preservative-free Indian pastes and sauces.

Founder Minara Cook said that her ethics extended beyond her cooking methods to her employment principles, as she had hired several local young people who might not otherwise get work in the food industry.

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MUMBAI: In his khadi jacket, sitting in a south Mumbai fivestar hotel, Jayant Sinha does not look any bit of the hedge fund manager that he was until a few months ago. In fact, he looks more like his father, former finance minister Yashwant Sinha. But it is a different sort of deal that Sinha is chasing. As the India head of Omidyar Network , Sinha is looking at various initiatives to improve the lot of those at the bottom of the pyramid in India, which probably explains the change in attire.

Omidyar Network, an investment firm of Pierre Omidyar (founder of Ebay) has already invested around $45 million in India and is looking to invest around $150-200 million in the next couple of years. Omidyar is among the handful of global billionaires who are turning to philanthropy in India and are investing in the upliftment of the country's bottom of the pyramid. However, the motive is not pure charity, but more to empower the weaker section. 

The others include New Zealand billionaire Christopher Chandler's Legatum Ventures, which has invested around $40 million in the past few years in the country. Even the legendary investor George Soros is into philanthropic investments in India. These investors are investing in microfinance institutions (MFIs), rural energy, education and other areas of empowerment such as property rights. 

"Philanthropic investors, essentially look for providing financial assistance and empowering those innovative organisations that impact the life at the bottom of the pyramid," according to Jayant Sinha, MD and country head of Omidyar Network India Advisors. He added that the network can bring inventure capital funds or debt for profit organisations and may provide grants to non-profit organisations. Incidentally, around half the money from the network is invested in not-for-profit organisations. 

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The World Bank's Board of Executive Directors today approved a $300 million loan to support access to finance for small and micro entrepreneurs whose role is vital in Egypt's job creation and economic growth.

The Enhancing Access to Finance for Micro and Small Enterprises (MSE) Project will support the government's priority program to encourage the sustainable expansion of this sector. It is estimated to account for over 99 percent of Egyptian enterprises, 85 percent of non-agricultural private-sector employment, and, correspondingly, almost 40 percent of total employment. This makes it a critical path to building a more inclusive system able to cater to less privileged segments in the society.

"Micro and small businesses are a primary driver for job creation and economic growth in emerging economies," said Dr. Shamshad Akhtar, World Bank Vice President for the Middle East and North Africa. "In several countries of this region they contribute to economic diversification and play an important r ole in private sector development. Through increasing access to finance for small business players, we aim at increasing productivity and employment as a development priority in our support to this region".

Enhancing Access to Finance for Micro and Small Enterprises Project is the first World Bank-funded project to support of MSEs in the Middle East and North Africa (MENA) region. In Egypt the sector is led by the Social Fund for Development (SFD) which has provided significant support to MSE policy efforts in recent years.

"We are particularly pleased to have this solid partnership with the Egyptian Government and to be able support the ongoing development of the sector," said A. David Craig, Country Director for Egypt, Yemen and Djibouti. "Sustainable and inclusive access to finance for will be a spur to employment opportunities, help alleviate poverty, and boost economic growth for the most vulnerable citizens," he added.

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