Getting private resources on board for sustainable development

By Royston Braganza, CEO, Grameen Capital India


To learn more about this topic, check out the Global Outlook on Financing for Sustainable Development 2019


Global-Outlook-Cover

GOOOOAAAAAALLLLLL! The frenzied celebration that reverberates across the globe, every time a goal is scored, reflects the seemingly universal passion for football – be it the FIFA World Cup, the Champions League or any other national or local leagues. The game cuts across generations, blurs political boundaries and traverses ethnic divisions. Sadly, some other things do too – hunger, refugee crises, poverty and global warming, to name a few. And yet, everywhere I look, shining examples exist of H.O.P.E.

Holistic approach. Governments, corporations, capital markets, non-governmental organisations need to find integrated solutions. One exceptional example is the catalytic potential of using corporate social responsibility/philanthropic capital to de-risk investment from capital markets. The financial sector can help guide companies to look towards a sustainable future. Grameen Foundation’s Growth Guarantees programme, for example, did precisely that by bringing together donors, international and local banks, microfinance institutions, and poor, vulnerable women borrowers.

Outcome funding. For too long, the focus has been financing for inputs such as grants for health programmes, budget allocations for education outreach and similar targets. However, the recent innovations in outcome financing or “pay for success” seem to be gathering momentum. The Educate Girls programme aims to improve learning outcomes and enrolment in schools in Rajasthan, India. This has tremendous potential, as capital market players can collaborate with development agencies to structure innovative financing vehicles that de-risk the investor and ensure outcomes are well-defined, measured and achieved, leading to a win-win situation for all.

Policy-led leadership. Policy makers have a key role as enablers in meeting the 2030 Agenda. Some of the recent policies in India are promising – changing the country’s fund architecture to include social venture capital funds, the Companies Act regulation proposing that 2% of profits be contributed to corporate social responsibility (CSR), the Central Bank regulations related to priority sector lending and small finance banks – and they point as well to a greater sensitivity and a crowding-in of conscious capital. Similar policy initiatives in developing countries could trigger the initial momentum required to catalyse the development of the market. Globally, countries such as the United Kingdom and the United States have also instituted treasury initiatives to attract commercial capital to the impact landscape.

Ecosystem. Each stakeholder has a role to play. But the effect is even more pronounced, scalable and sustainable when an enabling ecosystem is created. It is heartening to witness the collaboration, especially regarding sustainable development, amongst many multilateral agencies, foundations, corporations and non-governmental organisations (NGOs). The OECD is a stellar case in point with its pioneering work on such issues as impact measurement and blended finance. At Grameen Capital India, we are committed to building a “capital-with-a-conscience” ecosystem, helping to connect enterprises serving the poor with mainstream capital markets. Today, a unique debt vehicle has been added, with plans to create a Social Venture Fund and a Social Stock Exchange to democratise funding access for impact enterprises.

Clearly, desperate times call for creative, compassionate and collaborative (and sometimes desperate, out-of-the-box) measures if we are to meet the 2030 Sustainable Development Goals. I can only imagine the universal euphoria that will erupt when each goal is met. I am sure I will be cheering with my loudest, “GOOOOAAAAAALLLLLL!”