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Money where it matters, London 7-8 December 2016 1
Isilda Nhantumbo
8/12/2016Author name
Date
Isilda Nhantumbo
8/12/2016
S...
Money where it matters, London 7-8 December 2016 2
Isilda Nhantumbo
8/12/2016
Forests at IIED
Investment in
equitable
loca...
Money where it matters, London 7-8 December 2016 3
Isilda Nhantumbo
8/12/2016
Aggregation
quantity, quality, time
Marketin...
Money where it matters, London 7-8 December 2016 4
Isilda Nhantumbo
8/12/2016
Drivers
of DD
Unsustainable
logging
Unsustai...
Money where it matters, London 7-8 December 2016 5
Isilda Nhantumbo
8/12/2016
204,000 ha of 61,000 deforested
Example - Fo...
Money where it matters, London 7-8 December 2016 6
Isilda Nhantumbo
8/12/2016
Mobilization of
SME
Training in
partnership ...
Money where it matters, London 7-8 December 2016 7
Isilda Nhantumbo
8/12/2016
Access to
finance by
SMEs –
challenges for
i...
Money where it matters, London 7-8 December 2016 8
Isilda Nhantumbo
8/12/2016
Questions for discussion
What are the barrie...
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Financing forest linked small- and medium-sized enterprises (SMEs): strength in number, greater impact for people and planet

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This is a presentation by Isilda Nhantumbo, senior researcher at the International Institute for Environment and Development (IIED), on financing forest linked small- and medium-sized enterprises (SMEs).

Nhantumbo opened the session on decentralised forestry finance at the Money Where It Matters (MWIM) event, held in London from 7-8 December 2016.

The purpose of the MWIM event was to reflect on our insights and explore further how financing mechanisms can more effectively channel resources to the local level, and identify opportunities to increase flows of finance to the local level in new contexts for development assistance and national investment.

Participants at the event also agreed on outstanding questions that require further research on finance for and with local actors to achieve the effective use and management of funds to deliver climate resilient sustainable development.

More details: https://www.iied.org/promoting-local-access-development-climate-finance

Published in: Environment
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Financing forest linked small- and medium-sized enterprises (SMEs): strength in number, greater impact for people and planet

  1. 1. Money where it matters, London 7-8 December 2016 1 Isilda Nhantumbo 8/12/2016Author name Date Isilda Nhantumbo 8/12/2016 Strength in numbers, greater impacts for people and planet Financing Forest- linked SMEs
  2. 2. Money where it matters, London 7-8 December 2016 2 Isilda Nhantumbo 8/12/2016 Forests at IIED Investment in equitable locally controlled sustainable forests Governance Sustainable, viable and inclusive enterprises Climate change and financing
  3. 3. Money where it matters, London 7-8 December 2016 3 Isilda Nhantumbo 8/12/2016 Aggregation quantity, quality, time Marketing advertising / retailing The Market Secure legal rights Business capacity Technical know- how Strong enterprise -oriented organisati on 1. Rights-based advocacy 3. Technical extension 2.Enterprisesupport 4.Organisation Right- holders manage Natural resources and need CapitalCapacity Producers Cooperatives Associations Federations Learning and exchange Risk assessment and mitigation measures Finance and investment for sustainable transformation of forest landscapes, people’s livelihoods, economies and climate impacts
  4. 4. Money where it matters, London 7-8 December 2016 4 Isilda Nhantumbo 8/12/2016 Drivers of DD Unsustainable logging Unsustainable agriculture Unsustainable extraction of NTFP Unsustainable biomass production and consumption Multiple resources, multiple users and drivers, links between rural and urban, domestic and international markets SMEs – potential high multiplier effect Addressing several SDGs – climate action, inclusive growth, employment, gender equality Forests landscapes and sustainable forest management for REDD+
  5. 5. Money where it matters, London 7-8 December 2016 5 Isilda Nhantumbo 8/12/2016 204,000 ha of 61,000 deforested Example - Forest SMEs in Mozambique 10,000 ha, 500 m3/yr, 5 years Intervention = transition to forest concessionaires G24 = front runners – 9 forest concessions
  6. 6. Money where it matters, London 7-8 December 2016 6 Isilda Nhantumbo 8/12/2016 Mobilization of SME Training in partnership with government Zoning Inventory Management plan Reforestation plan Business plan Value addition Consolidation of businesses Forming companies Statutes Registration Public finance – bilateral donor SMEs buy in and engagement Additional sources of finance? Banks and microfinance institutions Private investors Public – domestic sources, bilateral and multilateral agencies Investment In sustainable viable and Inclusive businesses Investment in enabling conditions For land users and service providers/intermediaries
  7. 7. Money where it matters, London 7-8 December 2016 7 Isilda Nhantumbo 8/12/2016 Access to finance by SMEs – challenges for investments in sustainable and inclusive forest and agriculture businesses Interest rates – the cost of lending or borrowing Rate of return – for lender only? Repayment period – short versus long term investmentScale – transaction costs vs cumulative net economic, social and potentially environmental and climate gains Risk – perceived and real The grace period – how soon can the repayment start Collateral or guarantees – preference for assets such as land, buildings and equipment associated with liquidity Business management capacity – production potential, technology and markets; financial management systems by beneficiaries Legal registration Natural disasters – floods, droughts, wind storms, fire,… Analysing barriers and opportunities to unlocking finance to SMEs in Guatemala and Mozambique
  8. 8. Money where it matters, London 7-8 December 2016 8 Isilda Nhantumbo 8/12/2016 Questions for discussion What are the barriers and challenges to financing forest-linked SMEs? How can we scale up good practice? What do we do next?

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