1. UNEP FI and WWF Workshop:
Innovative Financing for Sustainable Small & Medium
Enterprises (SMEs) in Africa
International Environment House, Geneva, Switzerland
Wednesday 26th September 2007,
0900 – 1630 hrs
This summary document includes:
*Agenda
*Background information
*Information on workshop sessions
*Information on hosts & project partners
Media Partner:

2. Agenda:
Registration and Coffee 0830
Welcome and Introduction 0900
Paul Clements Hunt Head, UNEP Finance Initiative
Oliver Karius Event Chair, Managing Director, Vantage Point Global
Plenary: Innovative SME investment in Africa 0915
Bruno Wenn, Senior Vice President, KfW
Amdu Alem Tsengne Former Secretary General, Ethiopia Chamber of Commerce
Barbara James Executive Director, African Venture Capital Association
Jen Morgan Manager Sustainable Finance, World Wildlife Fund (WWF)
Coffee 1015
Presentations 1040
Successful models for financing
Chris Venter Chief Operations Officer, GroFin
Paul van Aalst Director, E+Co
Nate Schaffran Investment Officer, RootCapital
Workshop Session I: Challenges and solutions 1145
Facilitated by Dr.Jem Bendell, Associate Professor,
Griffith Business School, Australia
Lunch 1245
Presentations 1400
Mitigating risk
Andrew Gaines Managing Partner, DeRisk Advisory
Workshop Session II: Actions and next steps 1430
Facilitated by Dr. Jem Bendell
Coffee 1515
Awards and announcements 1545
Oliver Karius Event Chair, Managing Director, Vantage Point Global
Workshop Findings Summary 1600
Facilitated by Dr. Jem Bendell
Summary and Closing remarks 1615
Dupe Adelaja Director General, SME Development Agency of Nigeria
Oliver Karius Event Chair, Managing Director, Vantage Point Global

3. Background:
Introduction
The world’s top 200 corporations account for over a quarter of the planet’s economic activity while
employing less than 1% of its workforce1. However, few debate the view that a vibrant SME
sector can form the bedrock on which all economic activity is built, and that SMEs can be the
mainstay of an economy, particularly in terms of employment2. In many emerging markets, Small
& Medium Enterprises (SME) sector is one of the principal driving forces for economic growth and
job creation. And this holds particularly true for many countries in Africa where SMEs and the
informal sector represent over 90% of businesses, contribute to over 50% of GDP, and account
for about 63% of employment in low income countries3. Despite, SMEs in Africa face many
obstacles including corrupt governance structures, unfavorable macroeconomic environment,
debilitating physical infrastructure, and multitudes of administrative challenges. However,
inadequate access to financing continues to be one of the most significant impediments to
creation, survival, and growth of SMEs in Africa.
Recent interest in SME finance
Owing to their high risk profile, SMEs in Africa largely remain an unattractive investment for
mainstream investors. Of particular concern to investors are the country, currency, and credit
risks characteristic of many African countries in which SMEs operate. Recent years have seen
signs of innovation in SME financing models targeting Africa. Such SME-oriented “financing”
initiatives can essentially be classified into public, private, and hybrid categories.
Public: Largely led by institutions, such as the philanthropic foundations, development
banks and agencies, which see investing in SMEs as a vehicle for development of host
countries. Examples include the East Africa Fund by Shell Foundation, and the Africa
Enterprise Challenge Fund by DFID.
Private: A number of commercial financing models have been thriving particularly in
countries that offer conducive business environment. Aureos Capital, a private equity
fund manager, invests in several such funds in East, West, and South Africa.
Blended Value / Hybrid: Essentially constitutes of models that seek out and invest in
enterprises that not only create financial value but also create environmental and social
value. In other words, this includes investors seeking “Blended Value”4, focusing on
“sustainable” SME sectors, such as clean technology, organic farming and renewable
energy. Successful examples include Acumen Fund, New Ventures Inc., and E+Co.
While these and other examples show that success is possible with right mix of innovation and
skill, they remain few and geographically concentrated. Such scenario leaves huge unmet
demand for SME finance across Africa. If the potential of SME sector in the continent is to be fully
realized, lessons need to be learnt from current financing approaches and successful models
need to be scaled. However, there is also need for caution on one front.
1 “Top 200: The Rise of Corporate Global Power”, by Sarah Anderson, John Cavanagh; the
Institute for Policy Studies.
2 “Small Medium Enterprises (SMEs) and Corporate Social Responsibility: A Discussion
Paper”, Tom Fox, International Institute for Environment Development; June 2005
3 Annual Report 2005, UN Economic Commission of Africa (UNECA)
4 Term coined by Jed Emerson, Senior Fellow, Generation Foundation (www.blendedvalue.org)

4. SMEs and the Climate Change
It is common sense that SMEs, as users of raw-material and local resources, have an impact on
the well-being of their environment. Although the impact of one enterprise might be negligible,
evidence abounds particularly in developed countries that collective environmental impact of SME
sector is significant and needs requisite attention.
Latest report by the UN Inter-governmental Panel on Climate Change predicts a minimum
increase in temperature of 2.5 C in Africa by 2030, leading to expansion of dry areas5. If this is to
hold true, climate change may have a graver effect on Africa than any other continent6. While the
IPCC report also notes that inability of the private sector firms, particularly SMEs, to access,
absorb, and apply technological information are barriers to mitigation, it is important to note the
vulnerable nature of SMEs in Africa. SMEs are often forced to prioritize short-term survival over
long-term strategic measures to address environmental impact, let alone general lack of financial
resources. Consequently investments in cleaner technologies and production processes, which
become economic only after a period of use, are not affordable to many SMEs.
Meeting the Challenge – Innovative Financing for Sustainable SMEs
WWF and UNEP Finance Initiative recognize that the above scenario presents an opportunity to
address both the financing of SMEs as well as use them as a vehicle for creation of sustainable
economies in Africa. In light of this, successful SME financing models need to be scaled while
new ones need to be created that will change the balance of risks and incentives for the
mainstream investment community, leading to increased financing for sustainable SMEs.
Towards this end, WWF and UNEPFI will jointly organize a meeting on September 26th 2007 to
discuss innovative investment and risk mitigation mechanisms to increase private sector
investment in “sustainable” SMEs (term to be defined by WWF). Attendees to the meeting will
include in African chambers of commerce, bilateral and multilateral aid agencies, philanthropic
foundations, private financial institutions including commercial banks and asset managers,
financial intermediaries and SME specialists. The objectives of the workshop are to:
1. Outline the importance of SMEs to sustainable development, problems posed by their
lack of access to capital, and the reasons for this lack of investment.
2. Clarify the type of SMEs (sector and manner of functioning) that are desirable from a
sustainable development perspective that could benefit from improved financing.
3. Outline and appraise current innovative financing initiatives for SMEs, assess the extent
to which they address the sustainable development dimension, and the barriers to scaling
up these innovative initiatives.
4. Outline the risk issues facing investors and a range of risk reduction mechanisms that
could be created to thereby increase financing.
5. Outline 2 to 3 mechanisms that could have most impact, be most suitable as a tool to
promote sustainable SME development, are the most appropriate for ‘hybrid’
collaboration (business, NGO, government), and map out the respective roles and
incentives for different actors.
6. Gain and integrate feedback from participants into reports from the workshop (input:
facilitated group process. Outputs: revised DeRisk paper, short UNEPFI workshop
report).
5 “Climate Change 2007: Mitigation of Climate Change”, Intergovernmental Panel on Climate
Change Fourth Assessment Report
6 “Africa’s Challenge”, The Economist; May 10th, 2007

5. 7. Request and hopefully gain commitment from participants to work together on this
agenda, with or without the workshop’s convening partners. This will be a facilitated
process at end of the workshop on participants’ interest in collaboration and specific
examples of follow up actions.
Information on Workshop Sessions
Workshop Session 1: Challenges, Solutions and Actors for scaling successful financing models
Situating Objectives:
1. Think Big
2. Do not just introduce what your organization is already doing
Learning or unlearning objectives:
1. To recognize importance of differentiating between types of SMEs to promote based on
sustainability issues.
2. To recognize the relevant diversity of people in the room, and how they view the subject
area from different perspectives
3. To better understand the innovative approaches presented in the cases by giving space
for active reflection on them.
Knowledge generating objectives: knowledge to be sought on following questions
1. What are the biggest challenges to sustainable SME development?
2. What are the biggest challenges to scaling the innovative approaches heard?
3. What could be the solutions to either set of challenges?
4. Who needs to be involved?
5. What can the group of 8 to 10 agree as the 3 most important challenges and 3
stakeholder groups that must be involved?
Workshop Session 2: Current and Future Actions and Support Needs to be Active Partners in
Innovative Financing of Sustainable SMEs
Situating Objectives:
1. Think tangible, concrete, what action can people / organizations actually take?
2. What are the barriers for people to take these actions?
Learning or unlearning objectives:
1. To better understand the potential of DeRisk suggestions by giving space for active
reflection on them
2. To recognize the relevant diversity of people in the room, and how they view the subject
area from different perspectives
3. To better understand the innovative approaches presented in the cases by giving space
for active reflection on them
Knowledge generating objectives: knowledge to be sought on following questions
1. What is your organization doing to address the challenges (as defined in session 1) /
create solutions?
2. What could you do in relation to the key mechanisms just presented?
3. What would be their incentive to do so?
4. What's stopping you from doing it i.e. what do you need before you can become
partners?

6. Workshop Hosts Project Partners
UNEP FI: The United Nations Environment Programme Finance Initiative (UNEP FI) is a
partnership between the United Nations and the financial sector. Around 160 financial institutions
work with UNEP understand the impacts of environmental and social considerations on financial
performance. Our work programme provides a forum for signatories to work collectively in
advancing dialogue, establishing innovative approaches and determining best practice for
environmental, social and governance issues in areas such as asset management, insurance,
reporting, property investment, and for issues such as climate change, biodiversity and
ecosystems services, human rights, and water scarcity. UNEP FI’s regional work in Africa is
spearheaded by the UNEP FI African Task Force (ATF), a group of financial institutions, ranging
from commercial banks to development banks to asset managers, united by a common objective
of defining innovative approaches to sustainability for the finance sector in Africa. Members
currently collaborate to advance sustainable finance, responsible investment, and increased
provision of financial services for the poor. More information about the work of UNEP FI is
available at http://www.unepfi.org
WWF: World Wide Fund for Nature is one of the world's largest and most experienced
independent conservation organizations, with almost 5 million supporters and a global network
active in more than 100 countries. WWF's mission is to stop the degradation of the planet's
natural environment and to build a future in which humans live in harmony with nature, by: a)
conserving the world's biological diversity, b) ensuring that the use of renewable natural
resources is sustainable, c) promoting the reduction of pollution and wasteful consumption. More
information about the work of WWF can be found at http://www.wwf.org
IOMBA: The International Organizations MBA is a unique programme offered by the University of
Geneva that prepares professionals for careers in the increasingly interconnected fields of
international governmental and nongovernmental organizations and companies that work with
these institutions. IOMBA is a multidisciplinary programme taught in English that equips students
with (1) an understanding of the global socio-economic context within which international and
nongovernmental organizations operate; (2) advanced management training; and (3) ongoing
engagement with international and nongovernmental organizations. It brings participants together
with internationally renowned scholars, top officials from international and nongovernmental
organizations, and business executives, to explore the core issues facing practitioners in these
various communities. More information about IOMBA can be found at http://www.iomba.ch
Additional support for this workshop has been received from the Geneva International Academic
Network (GIAN). The workshop is included within the programme of GIAN.
On a timely note, the workshop will immediately follow the Geneva Private Capital Symposium,
whose theme is on “Investing Private Capital in Emerging and Frontier Market SMEs”. More
information about the symposium can be found at: http://www.geneva-private-capital-symposium.
com/. While the Symposium will shed light on need for SME investment in a broader
context, the workshop will be a much more focused event intended to highlight specific financing
models for sustainable SMEs in Africa, and discuss specific risk reduction mechanisms that could
lead to increased investment in this sector.