Donna shared interest tbli presentation 6-18-13


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TBLI CONFERENCE™ is the prime annual global networking and learning event on Environment, Social, Governance (ESG) and Impact Investing.

Monday and Tuesday, June 17-18, 2013

Paul Rose
Vice President of the Royal Geographical Society
Richard L. Kauffman
Chairman for Energy Policy and Finance for the State of New York - Governor of New York's Office and Cabinet - United States of America
Martin Rapaport is chairman of the Rapaport Group and founder of the Rapaport Diamond Report

Published in: Economy & Finance, Business
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Donna shared interest tbli presentation 6-18-13

  1. 1. Maximizing Impact by Mobilizing Local Capital Shared Interest’s “unflagging partnership — as necessary now as it was in 1994 — has helped us develop new strategies and tools to give substance and shape to the vision and energies of our people. We look forward to continuing that work, which is based on a shared interest.” Nelson Mandela
  2. 2. 2 Archbishop Emeritus Desmond Tutu The end of apartheid was Part 1 of the struggle. Part 2 is more difficult: To make the miracle endure. We asked you to disinvest. Now we say to you “invest!” Make South Africa succeed… for the sake of the world.
  3. 3. 3 Apartheid’s Economic Legacy Continues Inequality is still embedded in the economy and banking system  80% of the land is owned by whites (9% of the population)  45% of the black population is unemployed  1.3 million families are homeless  84% of the financial wealth is held in the four major banks
  4. 4. 4 Leveraging Local Capital Entrepreneurs , Employees and Homeowners Shared Interest backs guarantees Investors provide capital Thembani performs due diligence, places and monitors guarantees, provides TA Banks / Commercial Lenders lend to Microfinance Institutions lend to Low-Cost Housing Organizations lend to Other Small & Growing Businesses build wealth of Agricultural Enterprises & Co-ops benefit donates to reports to
  5. 5. 5 Building a Track Record Capital deployed: more than $14 MM in guarantees Leverage: Bank loans catalyzed > $100 MM for the impoverished “majority market”: 1:6 ($6 lent for every $1 guaranteed) Losses to investors: $0 Impact: low-income black South Africans:  Launch 165,000 small & micro-enterprises  Build and improve 122,000 affordable homes  Create and fill 1,880,000 job
  6. 6. 6 Managing Risk Risk Management Tools:  Work through local partners to structure collaboration; assist beneficiaries; report, mitigate risk  Share risk with local lenders and beneficiaries  Maintain a local currency reserve fund to protect investors’ capital  Adjust loss reserves quarterly to reflect portfolio risk  Secure subordinated debt to absorb losses that exceed reserves  Diversify the portfolio
  7. 7. 7 Leveraging Local Bank Loans  Build bankers’ capacity to lend to the “unbanked”  Assist with due diligence  Provide partial guarantees  Move banks to offer favorable interest rates  Incent bankers to make new loans to similar clients without guarantees Signed agreements provide the framework for approval, risk- sharing, monitoring, reporting and recovery of individual loans
  8. 8. 8 Forging Local Value Chains  Work with companies to link local supply chains to small producers  Help companies develop small producer contracts, training and credit  Provide technical assistance to small producers (and lenders!)  Guarantee / leverage the companies’ loans  Incent companies to extend future contracts and credit without guarantees
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