A number of factors have converged to make possible a reusable platform for impact investing in the MSME sector.
Using this platform, our impact fund developed a replicable model for non-bank-intermediated formal financing of MSMEs.
A number of factors have converged to make possible a reusable platform for impact investing in the MSME sector. Using this platform, our impact fund developed a replicable model for non-bank-intermediated formal financing of MSMEs.
The Impact MSME Platform transitions pipeline development away from a network-driven effort to a data-driven, methodical approach. A wide net is cast across the country to source the most attractive MSME investees. This reduces the cost of deal sourcing relative to deal size, which will be a significant stride in the MSME sector.
A structured due diligence and investment monitoring process is in place. This is executed by former Grameen Bank alums with decades of experience in the sector and region. The Impact MSME Platform will enable investments to be monitored by a combination of accounting software implementation and cluster-based high-touch monitoring.
The platform isolates the impact of an investment from confounding factors. Impact variables are collected along with financial data on a quarterly basis by redeploying i-SME infrastructure. Thus the affordability problem of impact evaluation in the MSME space is addressed.
The STEPs MSME Impact Fund adopts an open-ended fund structure which leverages an array of self-liquidating equity instruments, improving exit rates. All returns will be structured as dividends to facilitate repatriation to investors.
The Fund is structured to provide institutional investors access to an attractive, but heretofore inaccessible, investment frontier. With three decades of microfinance data on Bangladesh’s rural enterprises demonstrating a highly attractive risk-adjusted return profile (20%+ annualized returns, <2% non-performing investments) that is largely uncorrelated with global capital markets, the opportunity has been the exclusive domain of the informal financial sector. By participating in the Fund, local and international institutional investors can gain entry.
Developing a scalable and objective impact measurement system has been one of our key pillars.
Due to the high cost of impact evaluations relative to the size of an MSME investment, impact evaluations on a per-enterprise basis has traditionally been difficult to execute. This has been a disincentive for impact investment in the MSME space since impact investors want to know the social and environmental impact of their dollars. To address this gap, we have taken steps to create a scalable means to quantify the impact of our investments.
Impact variables added to financial data-feed: The i-SME platform records financial, transactional and operational information every quarter.
Impact data compatible with global standards: Measurement will use GIIRS taxonomy. In addition to general/cross-sector impact data metrics, we use sector-specific impact metrics with our frame-working partners such as Yale SOM. Investors will be able to determine the success of their impact investments.
Ability to isolate impact of an investment: One of the most innovative and revolutionary characteristics of the MSME Impact Evaluation Module will be its ability to isolate the impact of the investment from other confounding variables.
Historical Relationship Quantification: Peer group and investee time-series data is available both before and after the investment. Operational, financial and other variables of the peer group benchmark will be regressed on investee’s metrics to determine the relationship of investee’s dependent variables on the benchmark’s independent variables.
Dairy farm and beef fattening business financing through multiple programs targeting the increase of dairy farm production capacity installation of biodigesters to reduce greenhouse gas emissions, we have facilitated the disbursement of $14mn to over 3,500 dairy farms. By partnering with ACDI-VOCA we are also delivering customized financial products and business development support services to a large captive portfolio of dairy farmers, targeting mainly women dairy farmers spread across Southern Bangladesh. Dairy Farm and Clean Energy Production Projects We have also partnered with DFAT Australia, Oxfam in Bangladesh and the Whole Planet Foundation to graduate smallholder dairy farmers into sustainable dairy enterprises – through the facilitation of financing; and provision of business development training. Through this initiative we have collected commitments from our financial institution partners to deploy over $4 million to dairy and dairy-linked businesses and have already financed over 600 dairy farmers. Advocacy and Dairy Farm Management Training Through our different initiatives we have provided modern dairy farm and beef fattening business management training and financial literacy training to over 4,300 enterprise. Further, we have assisted in the formation of the Bangladesh Dairy Development Forum – consisting of key government and private sector players in Bangladesh’s Dairy and Livestock space.]
Education and Skills Development
Education and Skills Development
Japanese Language Training Program Using its network of expatriate Japanese nationals in Bangladesh, theSTEPs.org conducts regular youth training on Japanese Language, and creates placement opportunities for the most skilled youth through Japanese recruiters. National Skills Development ProgramstheSTEPs.org have organized and conducted several enterprise development and financial literacy programs for youth entrepreneurs across multiple districts in Bangladesh. 1.000+ High School students awarded extra curriculum books. Internet of Things (IoT) Army of 300theSTEPs.org and its partner organizations have hired and trained 300 fresh graduates in the field Internet of Things and offered them permanent jobs. IoT is one of the most exciting areas of the fast-moving ICT industry, offering huge potential for social transformation. In the context of Bangladesh and the development challenges we face, not only will this sector drive income and job growth, but it also has the potential to surmount long-standing challenges in basic services like healthcare. The IoT Army of 300 resource development program aims to introduce local IT professionals to the world of IoT with the overall goal being to empower the alumni of the program to go on to take advantage of the immense IoT market and positive social transformation opportunity to benefit our nation.
Financial Literacy Training Program for Women Through our various programs we have trained 2,500+ women-led dairy enterprises across five districts in the northern region of Bangladesh Vocational Skills Training For Women EntrepreneurstheSTEPs.org in partnership with Dishari Foundation have conducted multiple vocational training and human rights and social awareness programs to empower women in the rural communities. Char (Sank Bank) situated Women Dairy Farmer Financing$250,000+ to the women-led Dairy Enterprises in the Char Areas. Trained 1000+ women entrepreneurs on modern dairy farm production techniques to enhance their businesses
Support for Ultra Poor Char Communities Through our Char (sand-bank) based financing program in partnership with the Whole Planet Foundation, we provide financial assistance through microfinance schemes to char-based women dairy farmers in Norther Bangladesh across locations highly vulnerable to flash flooding. By utilizing these micro loans, dairy farmers are able to increase their income base and are able to generate more income to contribute to the pool left after covering the costs of basic needs. Green House Gas Emission reduction Through our Zero Waste Model project, or the “Four Cow Model” project, is a green model designed to make a household having four milk cows and a bio-digester self-sufficient by supplying sufficient milk to the market, by producing sufficient biogas for cooking from a bio-digester, by reusing other by-products such as bio-slurry as high quality organic fertilizer or fish feed, and by replenishing the household’s livestock over time. The model seeks to reduce damage from climate change by addressing household-level emission of greenhouse gases and unsustainable urban migration.
Over 55% of all climate change spending comes directly from rural poor households. This money would otherwise be used to cover basic necessities like food and medicine. Little to no funding, beyond covering immediate sustenance needs, is provided to households by aid agencies. Households most affected by adverse climate, e.g. – char households, resort to seeking high interest informal financing to finance income generating activities. Financial institutions are disinclined to serving the most climate affected households due to the population size relative to remoteness of the settlement which makes setting up a permanent/semi-permanent establishment unattractive.
Through our Char (sand-bank) based financing program in partnership with the Whole Planet Foundation, we provide financial assistance through microfinance schemes to char-based women dairy farmers in Norther Bangladesh across locations highly vulnerable to flash flooding. By utilizing these micro loans, dairy farmers are able to increase their income base and are able to generate more income to contribute to the pool left after covering the costs of basic needs.
Through our Zero Waste Model project, or the “Four Cow Model” project, is a green model designed to make a household having four milk cows and a bio-digester self-sufficient by supplying sufficient milk to the market, by producing sufficient biogas for cooking from a bio-digester, by reusing other by-products such as bio-slurry as high quality organic fertilizer or fish feed, and by replenishing the household’s livestock over time. The model seeks to reduce damage from climate change by addressing household-level emission of greenhouse gases and unsustainable urban migration.
Reach of quality healthcare is not yet up to par, with access to quality primary healthcare services being limited to only urban localities. For every 1,000 citizens Bangladesh has 0.47 doctors, against WHO recommendation of 1 per 1,000 citizens. Lack of awareness about primary health checks is still widespread across the country.
Currently there are between 1.5 - 2 million cancer patients across Bangladesh, with over 200,000 added each year. Access to quality cancer patient treatment services is still limited to urban localities. Specialists are limited in number, only 16 oncologists against the required range of at least 2,000 - 2,500. Existing facilities are barely capable of serving 70,000 – 75,000 cancer patients. Many cancer patients discontinue treatment due to the restrictively high cost of treatment.
A telemedicine delivery program that provides primary healthcare services to underserved individuals located in hard-to-reach regions across Bangladesh. Allows healthcare professionals to evaluate, diagnose and treat patients using disruptive technology. By February 2020, the program has facilitated the consultation of over 4,835 patients across Bangladesh, nearly 70% of whom were women.
theSTEPs.org aims to provide the cancer patients with financial assistance so that they can continue with their treatments without the struggle of chasing funds. The program aims to raise $500K annually with the goal of directly funding 350 beds for cancer patients at the National Institute of Cancer Research & Hospital.