Washington—June 13, 2013—The Aspen Network of Development Entrepreneurs (ANDE) will release its fourth annual Impact Report at its Aspen Institute headquarters tonight. The evening launch event, scheduled from 5:30 to 7:00 p.m., will begin with a welcome by Randall Kempner, executive director of ANDE, followed by a networking reception.
In an effort to create global prosperity, ANDE and its 175 plus members provide critical financial, educational, and business support services to small and growing businesses (SGBs) based on the conviction that SGBs will create jobs, stimulate long-term growth, and produce environmental and social benefits.
The annual Impact Report is a one-of-a-kind publication offering data on the current state of the sector for the past year and the efforts and impact of ANDE’s members. It also offers action items to further catalyze support and investment dollars to drive economic growth in developing countries.
In this year’s Impact Report, the growth of ANDE itself reflects a market sector that is expanding. Twenty-five SGB funds were launched in 2012, with the average target fund size at $51 million dollars. Thirty SGB funds reached a first close and had already raised $413 million in committed capital. ANDE members continue to reflect the growth of this sector this past year with 32 member-managed funds investing $229 million; 40 members providing $95 million in capacity development or business development services to 13,000 SGBs; and 14 foundation members disbursing $129 million into the SGB ecosystem.
According to the report, ANDE members have cumulatively worked with over 60,000 SGBs. Since 2009, 40 members directly invested approximately $1.7 billion; and 41 capacity development providers have spent $400 million to provide services to SGBs. As a sector since 2001, 293 funds—including 73 ANDE member funds—invested in SGBs with the average fund target at $52 million and committed capital of $28 million. Forty percent of these funds invested in sub-Saharan Africa, yet for the new funds that began fundraising in 2012, investment dollars were more evenly split between those targeting Africa, Asia, and Latin America, and multi-region focused funds.
While there is growth, ANDE members confirm that the biggest challenges for SGBs are access to finance and human capital. “In the developing world, entrepreneurs encounter challenges that both magnify their need for capital and also create more hurdles to accessing it,” said Randall Kempner, executive director of ANDE. Compared to private equity and microfinance, which raised $40.3 billion in 2012 and held $88.9 in gross loan portfolio in 2011, respectively, the SGB sector is an untapped middle market with much opportunity.
Specifically, the report identifies three action areas needed to help grow SGBs:
(1) Start-up enterprises struggle the most among SGBs to find investments.
ANDE recognizes that supporting early-stage businesses is key to the creation of a healthy SGB ecosystem, yet start-ups—usually looking for $20,000-$100,000 of flexible capital—struggle to find funds that will invest the smaller amounts necessary.This gap is reflective of the sector: only six percent of SGB funds focus on start-ups. Access to business loans and credit is also a challenge, with 60 percent of micro, small and medium enterprises in emerging markets underserved by banks.
(2) Women-owned businesses face more hurdles than their counterparts.
Although women represent approximately a third of all small businesses in emerging markets, they face systemic barriers to scale, hindering their significant potential and the overall growth of the sector. Female business owners often lack expansive networks and reliable mentors, yet despite these barriers, have the capacity to provide significant employment generation.
(3) Agricultural businesses suffer from lack of market linkages and poor management.
More than two billion people in developing countries depend on agriculture for their livelihoods, yet the small businesses that connect them to markets are often unable to find the skilled managers they need and are hindered by lack of financing. According to the report, 65 percent of ANDE members have focused their efforts on agriculture, and typically success for these businesses have a multiplier effect on the communities as well: higher revenue growth is not only correlated with higher total payments to suppliers, but also higher average payment per supplier. And, there is much more room for expansion: agricultural social lending has the potential to grow from around $9 billion—$350 million of which is provided through social lenders—to $33 billion with a mix of short- and long-term financing.
“Imagining a world without poverty takes practical thinking and a dedicated movement to lead the effort. ANDE is bringing us one step closer to global prosperity by examining and measuring how small businesses can positively impact local economies,” said Walter Isaacson, president and CEO of the Aspen Institute.
has chapters in Brazil, Central America and Mexico, East Africa, India, South
Africa and West Africa, and its members are located in over 150 countries
around the world.
To download the 2012 Impact Report and Executive Summary (also available in Spanish and Portuguese), please visit: http://www.aspeninstitute.org/publications/ande-2012-impact-report.
The Aspen Network of Development Entrepreneurs (ANDE) is a global network of organizations that propel entrepreneurship in emerging markets. ANDE members provide critical financial, educational, and business support services to small and growing businesses (SGBs) based on the conviction that SGBs will create jobs, stimulate long-term economic growth, and produce environmental and social benefits. Ultimately, ANDE believes that SGBs can help lift countries out of poverty. ANDE is part of the Aspen Institute, an educational and policy studies organization. For more information please visit www.aspeninstitute.org/ande.
The Aspen Institute is an educational and policy studies organization based in Washington, DC. Its mission is to foster leadership based on enduring values and to provide a nonpartisan venue for dealing with critical issues. The Institute is based in Washington, DC; Aspen, Colorado; and on the Wye River on Maryland's Eastern Shore. It also has offices in New York City and an international network of partners. For more information, visit www.aspeninstitute.org.
Note to media: If you would like to attend the Thursday, June 13, launch event at ANDE (5:30-7:00 p.m. EDT), please contact Carrie Barnes (firstname.lastname@example.org).