Kim-Andrée Potvin, Partner – Head of Operations at Bamboo Capital Partners
Financier for the past 20 years in traditional banking and currently asset manager in impact investing (investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return)
Ideas and concepts
The sustainable finance professionals are often seen by traditional finance stakeholders as utopist dreamers that do not have enough means to change the world. It can indeed be idealistic but it is useful to be reminded about the “drop in the ocean” concept where the collective effort of many drops has the power to have tremendous effect. Tech4Good is one such approach that can have huge impact through both the power of state-of-the-art develop- ments in new technology breakthroughs and its reach in terms of access to numerous markets and geographies at the same time as well as in real time.
As its name implies Tech4Good means using technology to improve the lives of others. For example,remote and underserved populations gaining access to energy with off-grid solarpanels with paymentto the service with a “pay-as-you-go” solution though a mobile phone. Being able to bring financial inclusion to the unbanked populations through micro credits being reimbursed through one’s cellular phone is another example.
Technology and the importance of entrepreneurs both in developed and developing countries
In the last 20 years, technology was increasingly used to accelerate the reach and the expansion of products, their deployment and monitoring. This does not need to be further developed here because in 2020 and the 4.0 digital era we are living in, this is now a given. What is instrumental in the development of the technological innovations all industries is the importance of Small and Medium Enterprises (SMEs) in local economies as most of the tech
breakthroughs are brought by start-ups/SMEs. This is even more true in developing countries and frontier markets and even more so with the COVID-19 crisis.
Indeed, recently released figures from the UN predict the downward pressure on foreign direct investment flows could range from – 30 % to – 40 % in 2020-2021, significantly more than previous estimates of – 5 % to –15 % 1. As financial conditions tighten and access to credit becomes more challenging, SMEs are at a particular disadvantage – yet their role in formal employment and livelihoods in the informal sector are vital. According to the international Labour Organization, more than 70 % of the workforce in emerging markets works in micro and small enterprises or is self-employed 2. In Asia alone, SMEs account for 96 % of all businesses, employing millions of workers who lack protections and safety nets. Most SMEs do not qualify as “essential services” and are therefore shut down or operating only partially due to various lockdown measures, creating massive job and income losses for their employees. Priority sectors such as food security, financial services, and energy access will need to be significantly ramped up to provide momentum to the economic recovery efforts. Any economic recovery plans should therefore prioritize increasing access to funding of SMEs in those sectors. Because SMEs are the backbone of developing economies, they have a key role to play in the recovery from the current crisis and it is crucial to address their liquidity needs and overcome the challenges due to the crisis while enabling them to strengthen their business and be more resilient to future shocks. Read the whole article