Building up on several investments aimed at improving entrepreneurship in Africa and around the world, the United States Agency for International Development (USAID) and its partners are testing new ways to support entrepreneurs across the globe.
Leveraging on $100 million in combined public and private investments “over their lifetime,” four new partners – MCE Social Capital, Investisseurs & Partenaires (I&P), Villgro and Root Capital – announced in September this year, are expected to join about 17 previous partnerships through the Partnering to Accelerate Entrepreneurship (PACE) Initiative, to help find new ways to support entrepreneurs solves respective challenges confronting their businesses.
These new ways aim at finding specific-targeted solutions at helping entrepreneur solve specific problems, Rob Schneider, the Division Chief, Global Partnerships within USAID’s U.S. Global Development Lab, said in a blogpost, USAID’s Global Entrepreneurship Week Blog Series, on gew.co. The blogpost is in partnership with the Global Entrepreneurship Network towards promoting global entrepreneurship.
The MCE Social Capital and USAID for instance, are working to help entrepreneurs access appropriate finance through MCE’s innovative loan guarantee model, Schneider said, just as the USAID is partnering with Investisseurs & Partenaires (I&P) to capitalise locally funded and managed impact investing firms in West Africa.
“With USAID’s support, Villgro is piloting its highly customized early-stage incubation support to enterprises in Kenya and Vietnam” and Root Capital “aims to promote increased impact investment by identifying ways to improve cost effectiveness and limit the need for subsidies through its research on the true cost of acceleration,” he added.
“By working with partners to test new approaches for impact investing, and business acceleration and incubation, USAID is supporting conditions and tools that enable entrepreneurs to overcome obstacles and implement market-based solutions to global problems,” he also said.
Although there have been increased support and investments global entrepreneurship from the development community, USAID is noticing that “determining how donors should help is a challenge” as, “entrepreneurs everywhere require different types of support at different stages—business development services for early-stage enterprises look quite different from consulting support for medium-sized businesses.”
To add to the aforesaid, “entrepreneurs in developing countries face a myriad of obstacles—from accessing appropriate finance at reasonable interest rates, to finding the right incubator or accelerator program to provide the support needed to grow,” Schneider said.
To address the gap, Schneider said the Partnering to Accelerate Entrepreneurship (PACE) Initiative, a program within USAID’s U.S. Global Development Lab, is working with “intermediaries who are searching for new ways to help support entrepreneurs that are navigating a complicated and challenging operating environment.”
Admitting that “there is no silver bullet or a one-size-fits-all solution that can solve all these problems, Schneider said “we know that solutions do exist, and it is important that we keep trying new approaches to find the best way to help entrepreneurs succeed… and by testing ways to catalyse private investment and foster entrepreneurship, PACE is addressing the challenges that entrepreneurs face by combining the innovation of a start-up and the convening power of the U.S. government.”
It will be recalled that USAID, at the 2016 Global Entrepreneurship Summit, held in June this year, announced in a press statement that it was making four new investments totalling more than $38 million to help mobilise the power of global entrepreneurs and innovators in the fight to end extreme poverty.
These investments, it said, will connect innovators around the world with investors and capital to increase access to energy and expand food security in developing countries, the agency said.
“USAID is committed to engaging entrepreneurs, innovators, and other private sector partners in developing countries around the world to advance development outcomes. Over the past seven years, USAID has directly supported hundreds of entrepreneurs and has partnered with other donors, international organizations and local governments to develop entrepreneurial ecosystems. In 2015, USAID had over 360 active public-private partnerships that leveraged more than $5.9 billion from private sector and other partners,” the agency said in the statement.
The new investments include: Scaling off-grid energy: a grand challenge for development, a $36 million investment to empower entrepreneurs and investors to grow a market to connect 20 million households in sub-Saharan Africa that live beyond the reach of the electricity grid with modern, clean, affordable electricity; Feed the future call for cool storage solutions, a $2.5 million in funding and mentoring to entrepreneurs to help them adapt, pilot and scale their proven cool storage solutions to prevent food loss and waste; Geeks on a Plane and Global Innovation Exchange an over $72 million in available funding opportunities, to help innovators and entrepreneurs accelerate their innovation to impact.