Completed Project: SME Impact Investment Opportunities

In the countries and regions where CFC has been able to work, its primary mission was creating impact to find lasting solutions to poverty. CFC, therefore, strived to provide sustainable paid employment for better income. Research shows that this is perhaps the best route towards alleviation of poverty, with its constant fragility of income, vulnerability to all kinds of adverse circumstances, and accompanying lack of confidence to assert personal and civil rights. We are now happy to report that one such CFC funded project has been completed.

Project Description

The project, proposed by the Financial Alliance for Sustainable Trade (FAST), aimed at creating a service enabling Small and Medium Enterprises (SMEs) in Africa and Latin America to take advantage of Impact Investment financing. Impact investment combines financial returns with achieving clearly defined social, economic and environmental indicators of sustainability. Sustainable SME present, in principle, the core target group for the rapidly growing number of and size of impact investment. However, bridging the information gap between SMEs and impact investors remains an unresolved challenge which severely constrains their cooperation. The project, supported by the CFC, aimed to bridge this gap by developing a SME Impact Investment Platform, making financing opportunities more transparent to Financial Service Providers (FSPs).

FAST is a member-driven organization representing a global community of financial institutions and SMEs dedicated to bring sustainable products and sustainable finance to market. FAST develops resources and activities aimed at increasing the number of producers in developing nations that successfully access quality finance.

Current status

The SME Impact Investment Platform, AXIIS (www.axiis.ca), was launched in December 2016, with a total initial financial request of USD 32 million from agriculture and forestry SMEs. Additionally, on the supply side there was USD 2.3 billion worth of FSPs assets under management. Based on the initial SMEs registered on the platform, the overall findings demonstrate that around 66% were located in Latin America, 27% in Africa and 7% in the Caribbean. Also, there was a balanced distribution of the commodities produced where 30% of the SMEs produces fruits and vegetable, followed by coffee 23% and grains and cereals 20%.

By early 2018, the platform had more than USD 6.7 billion declared available by the FSPs to invest in SMEs. At the same time, the needs of the SMEs in the platform summed USD 44 million. Currently, the platform is active and operating, helping to connect the funds available from the FSPs to the needs of the SMEs in the agriculture sector. The CFC involvement in support of the platform has ended in December 2018.