Grassroots Business Fund
The Grassroots Business Fund is a non-profit based in Washington, DC. It has field offices in Kenya, Peru, and India. Their mission is to build and support high-impact enterprises that provide sustainable economic opportunities to thousands of people at the base of the economic pyramid. These enterprises are grassroots business organizations in developing countries that empower large numbers of the poor as producers of income-generating commodities and products, as consumers of affordable goods and services, and as independent entrepreneurs. GBF actively supports enterprises throughout Latin America, Africa, India, and Southeast Asia.
The origins of GBF can be traced back as far as 2000 at the International Finance Corporation (IFC), when Harold Rosen founded the Small and Medium Enterprise (SME) department, a joint IFC/World Bank department. In 2004, Mr. Rosen started the Grassroots Business Initiatives (GBI), which aimed to build sustainable, non-financial intermediaries that would empower large numbers of High Impact Businesses and individual producers, consumers, and entrepreneurs. GBI worked directly with High Impact Businesses to strengthen their business performance, scale up their operations, and improve their sustainability. From 2004 to 2007, GBI implemented over 40 technical assistance projects and investments impacting the lives of over 3.4 million direct and indirect beneficiaries at the bottom of the socioeconomic pyramid.
In 2008, the GBI department was transformed into an independent organization called the Grassroots Business Fund (GBF).
Harold Rosen is Executive Director of the Grassroots Business Fund. Harold spent 30 years managing IFC’s emerging markets investments and leading IFC into new geographic areas and sectors, such as microfinance, technical assistance and SMEs. He founded the World Bank’s group SME department, and then spun this off into Grassroots Business Fund, an independent organisation funded by IFC and a number of others.
GBF makes equity, quasi-equity, and debt investments. Quasi-equity investments are debt instruments with embedded equity features, such as convertible loans, royalty-based loans, and warrants. GBF targets investments between $250,000 and $1,000,000 and has an average investment horizon of 5 years. GBF can also provide short-term working capital loans to export-oriented businesses between $40,000 and $150,000 through a separate facility (SME Export Facility). To date, GBF has invested $7 million invested in 26 businesses across 10 countries.
During 2009, Keystone supported GBF to make a significant investment in its own evaluation systems, captured in what they believe is a 'best in class' framework called Impact Planning, Assessment and Learning (iPAL) framework.
GBF's innovative monitoring and evaluation framework called, Impact Planning, Assessment, and Learning (iPAL), which allows GBF and its clients to better respond to results and experiences of their beneficiaries. iPAL effectively measures, analyzes and communicates the poverty alleviation impact of its clients, not only for internal purposes, but more importantly to guide and support its clients’ social mission. In doing so, GBF focuses on capturing impact data from its clients rather than just narrative reports. GBF’s initial focus is determining metrics that allow its clients to set and manage objectives, improve impacts, and strengthen management systems. GBF integrates its iPAL framework throughout the investment life cycle and ensures that iPAL is integrated into its clients’ business processes. GBF tailors iPAL to each GBO, which includes basic reporting on activities and outputs, a survey-based review of beneficiary impacts, a social return on investment calculation, and client feedback
The Group of 20 and Ashoka’s Changemakers, with support from the Rockefeller Foundation, have launched an online competition to find the best models worldwide for public-private partnerships that catalyze finance for small and medium enterprises (SMEs). The G-20 SME Finance Challenge, the first ever competition launched by the G-20, is a unique financial inclusion effort aimed at giving small entrepreneurs a chance to grow their businesses
GBF was named one of 14 winners out of over 350 submitted proposals. The winners receive funding and GBF’s executive director, Harold Rosen, accepted an invitation to the November 2010 G-20 Summit in South Korea. For this event, he will join the leaders from around the world to discuss SME’s role in poverty alleviation, including GBF’s innovate solutions to some of the most challenging problems facing the world today.
GBF’s proposal to establish the “East African Rural Enterprise Facility” will help create wealth, and provide jobs for up to 150 SMEs specializing in agribusiness. These groups are typically underserved by existing financial service providers, a situation which has prevented many of them from obtaining equipment to increase productivity, expand operations, or generate revenue. In addition, the East African Rural Enterprise Facility will provide technical assistance targeted at improving the business management, reporting systems, and internal controls of these SMEs.