Currently, the volume and supply of appropriate 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 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 frontier finance investments. 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 investments that seek to improve the lives of low to lower-middle income people in emerging and frontier markets. During the first 12 months of this project, the group will seek to create greater transparency as to the performance and risks associated with frontier finance structures and transactions. A research report, Unlocking the Potential of Frontier Finance, was published in the Fall of 2019.
During the second year of the Frontier Finance Working Group, GIIN members will narrow their focus on specific deliverables aim to address barriers preventing capital from flowing toward frontier finance. Specific objectives include:
- Mobilize additional grant capital for frontier finance by building a compelling case to grant capital providers on the important role of philanthropic capital in scaling frontier finance investments.
- Create new synergies among grant capital providers, fund managers, and other frontier finance stakeholders by increasing understanding of each other’s interests and motivations in advancing frontier finance.
The Frontier Finance Working Group will pursue the objectives above by:
- Comparing experience in the use of grant capital to facilitate private sector investment into frontier finance and identifying important lessons learned;
- Creating a resource with key messages supported by illustrative examples to share with grant capital providers on the compelling opportunities of utilizing grant-making to catalyze investment in frontier finance; and
- Identifying new potential providers of grant capital and engaging them in either 1) the co-development of a resource described above or 2) roadshow events sharing the final version of the resource.
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, 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.