On Monday, May 30th 2011, ICCO and the Aspen Network of Development Entrepreneurs (ANDE) held its meeting on 'Entrepreneurship Development in Emerging Markets' and ANDE presented the findings of the its recent published 2010 Impact Report, which included important trends for the sector, as well as key learning’s with regards to the impact achieved in the projects of the ANDE members.

1. 1 1

2. Only by letting millions of
entrepreneurs try new ideas, to
innovate, to create businesses that put
those ideas to work in a competitive
and open way, only by doing those
things are we going to be able to
tackle the world’s big problems.
- Angel Cabrera, Chair, World Economic Forum Council on
Entrepreneurship
2

3. SGB
SGB
SGB
SGB SGB
SGB
Small and growing businesses (SGBs) are commercially
viable businesses, typically from 5 to 250 employees,
that have strong potential for growth -- and thus for
creating economic, social and environmental benefits
3

4. Despite potential benefits, formal small business sectors in
low income countries are much less developed
Share of total
Employment (%) Contribution
5/30/11 5/30/11
to GDP (%)
100 100
5/30/11
5/30/11
80 80
5/30/11 5/30/11 5/30/11
5/30/11
60 60
40 40 5/30/11
5/30/11
57 51
20 20
18 16
0 0
5/30/111 5/30/111 5/30/111 5/30/111
Other Sectors
Informal Sector
Formal SME Sector
4 1. Contribution percents are median values for income group Source: Ayyagari, Beck and Demirguc-Kunt, “Small and Medium Enterprises
across the Globe: A New Database”, World Bank 2003; Dalberg analysis

5. The Promise of SGBs
Impacts
•Job Growth
•Wage Growth
SGBs •Revenue Growth
•Net Income Growth
•New Products
•Customers Served
•Suppliers Supported
Leading To:
Economic Social Environmental
Benefits Benefits Benefits
Steady jobs Social goods (glasses) Reduce deforestation
Increased incomes Social infrastructure (toilets) Improve air quality
Wealth creation (LPG)
5

6. Financial Flow Schematic of SGB Sector
Private Traditional private Medium
Equity equity provider businesses
Commercial
Capital only provider
$2m
investment
Blended capital
investment
SGB Capital and capacity Small and growing
businesses
Sector Social impact
building provider
investment
Grants for capacity Capacity building
building only provider
$25k
Microfinance Microfinance
Microfinance provider clients
6

7. The State of the SGB Sector
7 7

8. New SGB investment funds by year
30 31
Consider SGB Investments (“SGB Inclusive”)
Primarily focused on SGB Investments 26
22
23
28
18
9 15
8
7 7
6
5/30/11 5/30/11 5/30/11 5/30/11 5/30/11 5/30/11 5/30/11 5/30/11 5/30/11 2010
(1H)
Note: Only includes funds with known vintage years. Some funds may no longer be in existence.
Source: Dalberg and ANDE analysis. Data is from public announcements.
8

9. Number of SGB Focused Fund
Began fundraising in reference year
5/30/11
28 5/30/11
22
15
5/30/11 5/30/11 5/30/11
Source: Dalberg Analysis
9

10. Target funds considering SGB sector remain relatively small
compared to overall EM PE and Microfinance
Investment Size Target
Total EM PE target fundraising 2001- $5/30/11 bn
1H2010
$2 mn
$10.5 bn Total SGB Focused
fundraising 2001-
1H2010*
$20K
Microfinanc
e** $5/30/11 bn
Gross Loan
Portfolio
2009
Source: Emerging Market Private Equity Association, Mix-market, Dalberg Analysis
* Figure is cumulative fundraising amount from 2001-1H2010 performed by funds that
consider investments in SGB sector. Actual amounts raised will vary and will be lower than
announced target fund size.
** Microfinance data from 2009 Total Global Gross Loan Portfolio
10

11. After slowdown since 2008, there is new momentum in
fundraising for SGB focused funds
% SGB Focused 6% 11%
Total: $22.6 bn
Fundraising amounts among SGB
focused funds outpaced growth of
non-SGB fundraising
$5/30/11.3 bn
5/30/11 Total: $5/30/11.2 bn
In 2009, 6% of all EM PE fundraising
amounts were SGB focused while
1H2010 11% of fundraising amounts
$9.7 bn are SGB focused
$5/30/11.3
5/30/11 bn $5/30/11.5 bn
5/30/11 5/30/11
Source: Emerging Markets Private Equity Association, Dalberg Analysis
11

12. Geographic Focus of SGB Funds
2001-1H2010
10%
8%
13%
11%
15%
43%
Latin America Middle East South and South East Asia
Africa Central & Eastern Europe East Asia
Note: N=217, does not include 3 funds with unknown investment regions.
9 funds investing in multiple regions are counted once for each region.
12 Data includes funds launched and publicly know to be fundraising between 2008-2010
Source: Dalberg analysis (2001-1H2010)

13. Increase in Focus on SGB Financing
“ “
…history shows that countries thrive when they invest in their people and infrastructure; when they promote multiple export
industries, develop a skilled workforce, and create space for small and medium-sized businesses that create jobs
President Obama, Ghana Speech July 2009
•
IFC Road Map 2009-2011 identifies strengthening SMEs and agribusiness as the
SMEs/SGBs New Focus first pillar in creating sustainable growth
Area for Development
among multilaterals •
FAO identified SMEs as critical to food and health security through enhancing
the food value chain
•
US: President Obama in Cairo June 2009 dedicated to investing in businesses
Bilateral donors as and technology at the Entrepreneurship Summit; Food security policy places
drivers of new SME emphasis on supporting SMEs
Funds •
G20 has launched the SME Finance Challenge to catalyze finance and
financial services for SMEs
•
Emerging market SMEs as a channel to access the growing BoP market
SMEs New Focus for
Financial Opportunity
•
HSBC has reported that emerging market small businesses are the most
confident going into 2010
Sources: IFC Road Map, FY09-11 Creating Opportunity: Doing Our Part for an Inclusive and
Sustainable World, March 27, 2008; HSBC Small Business Confidence Monitor 2010; On the Frontiers of
13 Finance: Scaling Up Investment in Sustainable Small and Medium Enterprises in Developing Countries,
World Resources Institute, 2009; OPIC; IFC;

14. Who is ANDE?
14

15. Aspen: a non-partisan organization whose
mission is to bring together people who
should be collaborating on societal
challenges but would not do so ordinarily.
Network: an interconnected group or
system
Development: improving the economic,
social and environmental welfare
Entrepreneurs: individuals whose passion
leads them to organize available resources
in new and more valuable ways
15

16. The ANDE Vision
Vision Significantly increased prosperity for the people of the developing
world as measured by increased incomes, higher quality of life
and social and environmental advances
Long-term
Outcome A thriving local SGB Community that addresses the finance, human
(15 yr) capital, market access, and enabling challenges faced by SGBs
Mid-term Successful SGBs that demonstrate an Successful local entrepreneurs to
Outcome attractive market and stimulate the serve as angel investors and
growth of local finance and demand an improved business
(10 yr) service providers environment
Near-term A well functioning, growing and global SGB Sector that is creating
Outcome and building successful SGBs at increasing rates in developing
(5yr) countries
16

17. Impact of ANDE member support of SGBs to date
0
,77 es4
508 oye
l
Emp
$902 million dollars
of capital deployed1
11,100 SGBs 678,325
Supported3 Suppliers5
$ 176.8 million
dollars of SGBCD
services provided2
57
Co ,633,
nsu 335
me
rs6
1. n=57 member funds cumulative to date 2. n=28 members
reported over 2009-2010 3. n= 71 members cumulative to date 4.
n=37 members as of the latest reporting period 5. n=18 members
cumulative to date 6. n=19 members cumulative to date
Source: ANDE member data
17

18. ANDE Member Target IRR Ranges
7%
3%
6%
13%
47%
14%
0-5% 5-20% Above 20%
Target return range
Note: N=63, does not include 3 ANDE member funds that have not provided target IRR range
Source: ANDE member data
18

19. Capacity Development Services Provided to SGBs by
ANDE Members
Business Plan Development 65%
Establishing Market Linkages 63%
Entrepreneur/Basic Business Training 63%
One-on-one mentorship 53%
Direct Consulting Services 47%
Impact/Evaluation Services 35%
Business Plan Competitions
33%
Acceleration 32%
Incubation 28%
10 20 30 40
Number of Members
19 Note: Respondents could select more than one answer. N=57 Technical assistance and Investor
members who provide TA

20. Where in the World is ANDE?
Percent of ANDE members supporting SGBs by region, percent by HQ location
and locations of ANDE Regional Chapters 2010
32% in Europe,
10% HQ
59% HQ
in North
America 59% in Asia and SE Asia,
25% in Middle East/ 4% HQ
North Africa, 1% HQ
5% in Oceania
57% in Latin America,
17% HQ
61% in Sub-Saharan Africa,
9.5% HQ
Middle East and North
Latin America Africa Oceania ANDE Regional Chapter
Sub-Saharan Africa Central & Eastern Europe Asia and Southeast Asia
Note: Funds investing in multiple regions are counted once for each region; Source:
ANDE member data, n = 93 members
20

21. ANDE Members
21 Research,
Academic and
Corporate
Institutions 35 Investors
18 Foundations
4 Other*
45 Capacity Development
Providers
*Includes individual and strategic partner members
21

22. What ANDE Will Do: 2011 Activities
Knowledge Creation/
•
Launch at least 2 additional Regional Hubs
•
Develop & begin implementation of research agenda
Sharing •
2011 Annual Conference (4Q 2011)
•
Leadership Training (4Q 2010, 1Q 2011)
Training •
Investment Officer Training - Mexico and India
•
Orientation Training
•
Promote Adoption of ANDE Core Metrics and IRIS
Metrics and Evaluation •
Metrics Conference (2Q 2011)
•
Robust Metrics Working Group
Capacity Development •
Replenish CDF Funds (1H 2011)
Fund •
Third RFP: Select Recipients (3Q 2011)
•
Launch Policy Working Group
Education/Advocacy •
Strengthen Partnerships with Dev Agencies
•
Develop advocacy strategy for European DFIs
22

23. Thank You
jenny.everett@aspeninst.org
www.aspeninstitute.org/ande
23