Currently, the volume and supply of appropriate early-stage risk capital in service of low- and lower-middle income populations in emerging markets is insufficient to meet growing demands from investment intermediaries and enterprises. The Frontier Finance Working Group convenes experienced early-stage impact investors, as well as those interested in exploring frontier finance investments, to share learnings, specific structures and transactions, and discuss the barriers investors face when evaluating early-stage investments with perceived high risk. The Working Group activities complement and inform a research study on the financial and impact performance of frontier finance transactions.
The GIIN’s Frontier Finance Working Group will be carried out in close collaboration with other industry efforts, including the Collaborative on Frontier Finance, a new multi-stakeholder initiative that aims to increase the amount of appropriate capital for small and growing businesses in frontier and emerging markets.
Key Objectives and Activities
The Frontier Finance Working Group seeks to mobilize additional and appropriate capital to early-stage investments in emerging markets, by creating greater transparency as to the performance and risks associated with frontier finance structures and transactions. To this end, the Working Group and research study will engage GIIN members to:
- Build a compelling case for frontier finance by contributing evidence and examples of the use and results (financial and impact) of frontier finance structures and transactions;
- Refine and clarify the role and contributions of early-stage, risk-tolerant capital in the impact investing industry, and relevant entry points for different types of investors to reduce transaction cost, minimize risks, and achieve scale;
- Share, discuss, and co-create solutions to bridge the gap in the supply and demand for additional and appropriate frontier finance.
An Advisory Committee composed of ten GIIN member organizations with experience and expertise vis-à-vis frontier finance provides guidance and leadership over the Working Group. Advisory Committee members include Acumen, AHL Venture Partners, AlphaMundi Group, Blue Haven Initiative, CDC Group plc, Investisseurs & Partenaires, Nuveen, a TIAA Company, Omidyar Network, Omnivore Partners, and USAID.
This Working Group is made possible by generous support from the DOEN Foundation and the Omidyar Network. It is also made possible by the support of the American people through the United States Agency for International Development (USAID). The contents of the working group are the sole responsibility of the GIIN and do not necessarily reflect the views of USAID or the United States Government.