Our team was.... Special thanks to Jorge and Sarah for his efforts to co-ordinate our work World Cup group of Dead
What was our process i.e. How did we define the project we worked on? You could say through a mixture of “struggle” and good fortune. The struggle part came from the fact that working together to define a project we could work on to help us in the area of Financial Resourcing was more difficult than we probably more difficult than we thought it would be Despite fact that we know each other well in the LA region, it quickly became clear that we were not used to working with each other on this sort of question. We will discuss this more later The result was that many of our first brainstormed ideas we decided were not practical or specific enough. They tended to fall into the category of “someone should set up a large fundraising organisation in the US” - i.e. They were not things that could be done unless we already had deep resources and were not things that WE would work on together We decided we needed to identify a specific fund-raising opportunity that we could meaningfully develop together This is where the “good fortune” happened for our group...
At this point, Sarah M at YBI brought us the idea of working with her to craft an entry to the “G20 SME Finance Challenge” competition [Explain the key points of the competition using slide as a prompt] We decided to use this as the focus of our project because: It was specific and real opportunity with some urgent deadline (creating some needed focus and momentum in our group) Winning the competition would have significant benefits It would require us to work together as the plan was to demonstrate that our proposed approach could have a regional impact
The basis of the idea is to use a regional loan guarantee fund TOGETHER WITH the use of YBU Network-type entrepreneur support to encourage banks to support local youth business SMEs...
Sarah to present (leave screen blank initially) The competition was launched by the G20 group and Ashoka’s Changemakers, with support from the Rockefeller Foundation. They have invited people to pitch innovative ideas for how the public sector could help unlock private sector finance for SMEs. Many of the major development banks have signed up to implementing the winning proposals including the World Bank, IFC, Asian Development Bank, Inter-American Development Bank, African Development Bank and European Bank for Reconstruction and Development. We took a public private partnership model which has worked in India where a government guarantee scheme which guarantees 80% of loans to high risk clients (bring up pictures) enabled BYST to propose and secure a partnership with the Indian Bank. The guarantee was the catalyst but it was the combination of that and the BYST support activities that convinced the bank to work with BYST.
We proposed that this model could be replicated in multiple countries through creating an international public sector guarantee (either through a regional development bank or a global bank like IFC/World Bank) which would guarantee up to 80% of loans from private sector banks in-country to young entrepreneurs, in partnership with YBPs. We argued that this would be easier/faster than campaigning for individual governments to create their own in-country guarantee schemes like the Indian one, although possibly our initiative could drive them to do that, meaning the international guarantee could one day be removed. Our proposal was called Multi-country Financing Partnerships for Youth-led SMEs. You can read it online at www.changemakers.com/SME-Finance. Invite Alvaro to add anything in terms of his experience of being involved in this proposal and the value of this sort of mechanism for his environment
How it works: [explain with reference to the above model] Within this, our model supports the overall sustainability and scalability of the approach because it provides a second level of risk mitigation for the banks (though reducing the failure rate of their loan customers). This means that the youth-SME market becomes attractive to banks economically as well as socially This also leverages AND grows the authority of the network N.B. This idea is based on a similar model that has been successfully developed by BYST. This is therefore a great example of how we can leverage the value in the network Sarah will be going through this idea in more detail in the “Lending” session on Wednesday
We will hear whether we have been successful in the competition by ______. Fingers crossed! What will we have got from this work...
So what are our group’s reflections on working together on this process? First is that it isn’t straightforward.... We struggled at the start to really move forward because we simply aren’t practiced in working with each other. It wasn’t obvious to us how we go about identifying mutually important objectives and creating a process to address them – even though we were all very clear the Financial Resourcing is a big issue for each of us. It was only when we got focused on the G20 idea that we started to get going. I think that this shows that we have to be very clear what we are trying to achieve if we to create the momentum required to be successful Communications are a really challenge and we will have to find better ways to collaborate using phones and the internet Also critically, because we weren’t used to working in this way, we failed at the start to create the space required to work together. Again I think finding a clearly valuable and specific objective helped us greatly to find the time and space required We also discovered that if we want to be able to work on exciting regional or global opportunities together we need to be very aligned around what we do and have a consistent set of data as evidence of our collective impact. We found, for example, that having to decide what average loan size our proposed scheme would support, first of all challenged us to provide a consistent set of data on this point and also led to an interesting debate in the team about who we felt our target group is
YBI Global Forum, Monday: Strengthening our network - Resourcing
Network Strategy – Working Group D
“G20 SME Finance Challenge”
Working Group D+ Team members
Argentina Eleonora Nobile CEO, Fundación Impulsar
Bolivia Álvaro Bazán Executive Director, Innova
Brazil Luciana Lopes Programme Manager, Conexão
Mexico Andrés Rodriguéz Executive President, JEMAC
Uruguay Wilder Folco Director, Emprecrea
* Jorge Rodriguez YBI Advisor
* Sarah McMillan YBI Operations Director
• Forming our team
• Opportunity is the mother of good strategy!
The “G20 SME Finance Challenge”
• Global Ashoka sponsored competition
• “Best models worldwide that catalyze finance for small and medium
• 15 winners present their solutions at G20 summit 2010 and receive
G20 funding support to implement their proposal
– Social & economic impact
– Sustainability & soundness
An international public sector credit guarantee facility that
unlocks collateral free loan finance for youth-led start-up and
early stage SMEs in multiple countries, through unique local
level collaborations between private banks and youth
entrepreneurship support organizations following a globally
“Multi-Country Financing Partnerships for Youth-Led SMEs”
Our proposal for the G20 SME finance challenge
Our proposal for the G20 SME finance challenge
Provide a credit guarantee of up to
80% on loans to youth-led businesses
Provides international accreditation and
assistance for to enhance the quality of
support to the young entrepreneurs
Identify, and support young
entrepreneurs with viable business
ideas but without access bank finance
Local partner banks &
Provide collateral-free loans to youth
businesses at start-up or early growth
• Creation of sustainable funding platform for members in Latin
• Raised profile
• Loan financing partnership model that can be implemented globally
• Learnings from the process of how we work together
What we hope to get from our project
Working together on this project
• Working together was difficult
– Working on what? To achieve what outcome?
– Communication challenges
– Space for collaboration?
• Collaboration requires alignment and consistency
– What do we do? Who do we support?
– What data do we need to have?
• We feel excited about what has been done and what
could be done
• We will have to work hard at working together – but
the prize will be worth it!