By providing goods and services to low-income people, social enterprises create huge benefits to clients and society. But market prices may not always cover fully the costs and stay appropriate and accessible for low-income clients (e.g. in education, when benefits are far away in the future or when households do not have liquidity or access to finance, etc.). This may hurt profitability of social enterprises, their access to capital and their growth to scale. On the other hand, there is an exponentially growing market of impact investors interested in enterprises aiming at financial and social return. This programme suggests innovative, catalytic models to use development finance in bridging the gap.

The programme creates synergies between the Interamerican Development Bank (IDB) and SDC with pay-for-outcome funds administered by IDB/MIF.

Overall objective (impact) is poverty reduction and improved livelihood of low-income households, in particular female headed ones, in LAC.

Low income households in LAC, in particular female headed.

The three main outcomes (change of the performance of the system) are

1. Up to 4 SE (per USD 1 Mio. inside the LAC-IMPACT facility administered by IDB/MIF) can scale their operations and provide products and services to 4’000 low-income clients, who shall have net additional incomes (or a corresponding value in livelihood improvement) of a total of USD 3 Mio. during several years.
   Special attention is given to gender inequalities.
2. The SIINC model proves attractive to impact investors and more deals will follow the model. At least USD 3 Mio. capital are invested into the 4 SE (non-SDC funds) and more capital via other Social Impact Incentives (SIINC)-inspired programs (copy cats).
3. The approach is adopted and utilized by further funders, additional investment of USD 4 Mio. into the IDB/MIF facility and multiplying the leverage from outcome 2 further.

Risultati principali attesi:  

1. 4 SE receive appropriate support and investment (USD 3 Mio.)
2. Social impact incentives (SIINC) based payments ensure financial viability in the short term and long term sustainable solution are set up.
3. Robust and convincing social impact data made available (gender disaggregated).
4. Impact investment industry and philanthropic bodies incl. donors inspired, and strong double bottom-line impact investors able to reassess SEs investability explicitly factoring in social contribution.

Risultati fasi precedenti:  

First phase, single phase multi-bi pool project

(Results of collaboration with Social Entrepreneurs in Latin America in project 7F-08735.01 are promising, with important outreach numbers (hundreds of thousands) after 1,5 years, good impact and good progress of project.)

IDB/MIF Social Entrepreneurship Program (SEP)
7F-08735.01 - Public Private Development Partnership: Promoting Social Entrepreneurship in Latin America