6. Bamboo Ib Workshop Sep16 Vf

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Impact Investing as a Source of IB Finance

September 16, 2013

Manila, Philippines


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Impact Investment Framework and Landscape

Philanthropy Services

Priority is social / environmental

support and change through

charitable donation

Type Grants

Profile Not-profit trusts or

foundations; For profit social

enterprises; CSR initiatives

Impact Investments

Goal is social / environmental change

with moderate to risk-adjusted

financial returns

Type Equity or debt

Profile For profit social enterprises

Commercial Investments

Goal is maximized financial return

Type Equity or debt

Profile For profit enterprises

HIGH

HIGHNONE

NONE

Target Social and/or Environmental Impact

FINANCIAL FLOOR

IMPACTF

LOOR

Philanthropy

Solely Profit-MaximizingInvesting

FINANCIAL FIRSTINVESTORSOptimize financial

return with an impactfloor

IMPACT FIRSTINVESTORSOptimize social orenvironmental impactwith a financial floor

Tar

getFinancialReturn

Source: Monitor Institute, 2011.

Source: Adapted from Investing for impact: How social entrepreneurship is redefining the meaning of return , Credit Suisse, January 2012.


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Comparison of Financing Instruments

Source: Adapted from Social Investment Manual: An Introduction for Social Entrepreneurs. Schwab Foundation for Social Entrepreneurship & Technical University of Munich, 2011.

Financing Instrument Key Terms Implications

Grants Duration: Short-term

Annual payments: None

Repayment: None

Usually restricted use for predefined projects High fundraising costs Low entrepreneurial flexibility in the use of capital

Hybrid / Patient Capital Duration: Long-term (37 years)

Annual payments: NoneRepayment: Depends upon structure

Inexpensive financing instrument

No dilution of ownership Risk sharing with the social investor Great structuring flexibility

Debt Duration: Long-term (37 years)

Annual payments: Interest payments

(variable)

Repayment: Yes

Annual interest payments require low-risk businessmodel

No dilution of ownership Far-reaching rights of capital providers in case of

default

Moderate entrepreneurial flexibility in the use ofcapital

Equity Duration: Long-term (5-7 years)

Annual payments: Dividend payments

(variable)

Repayment: No

Dilution of ownership Social investor receives control and voting rights Profit participation for social investor Potential impact on corporate culture

Mezzanine capital Duration: Short-term (13 years)

Annual payments: Interest payments(variable)

Repayment: Yes

Annual interest payments require predictable cash

flows Dilution of ownership only if converted into equity Mandatory repayment if not converted to equity Profit participation for social investor


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What is a Social Enterprise

Organizations categorized by PURPOSE

Maximize financial benefit to owners

Org

anizationscategorizedbyINCOME

Con

tributed

earned

Maximize social benefit

FOR PROFIT Social Enterprise

Non-Profit /Government

Corporate Social Responsibility (CSR);Environmental, Social, and Governance(ESG)Sustainability

Business MethodsEntrepreneurship

Public-Private PartnershipPrivatizations etc.

Social enterprises blur traditional boundaries between for-profit and non-profit.

Source: Investing for impact: How social entrepreneurship is redefining the meaning of return, Credit Suisse, January 2012.


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Model Management Market

What We Look For in Social Enterprises

Is there a commerciallyviable business model

that can be scaled. Is

there an economic

value proposition across

the supply chain.

Does the teamhave the

capabilities to

execute the

business plan

Is there a marketfor the products or

services and it is

large enough to

support growth


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Impact Measurement: Outputs and Outcomes

Inputs

What is put into theventure

Activities

Ventures primaryactivities

Outputs

Results fromVentures operations

Outcomes

Changes to socialsystems

v/sWhat would have

happened anyway

Goal Alignment

Activity and goaladjustment

Impact Value Chain / Logic Model

Source: Adapted from Investing for impact: How social entrepreneurship is redefining the meaning of return , Credit Suisse, January 2012.

Sample Impact Measurement / Rating Agencies


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Sample Impact Measurement Metrics

Healthcare:Number of patients treatedNumber of doctorsNumber of dentists,Number of HIV+ patientstreatedNumber of employeestraining per quarter

Rural Development:Number of people reached

Number of investments in rural focused enterprisesRenewable Energy:Number of solar products sold,Number of entrepreneurs employed and income generatedCarbon offsets per yearTotal beneficiaries

Number of plants in operation,Total energy capacity installedNumber of households served

Livelihood:

Number of employeesNumber of disadvantage employeesNumber of female employees

Housing:Construction completed,Plots registeredHouses built and sold

Education:Number of student loans,Percentage of female students

Percentage of low-income studentsTeachers employedChildren enrolledLow-income children,Number of hours of teacher training per quarter

We assess the impact of our investments and monitor a list of customizedindicators including the following:


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We Are A GIIRS Rated Pioneer Fund!

Oasis is one of the first funds to receive a rating using this innovative impact measurement system.


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$250MPrivate Equity

A Global Private Equity Group

4Regional Hubs

46Investments

25Countries


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$195M $53M

The Oasis Fund invests in

commercially viable companies that

provide access to housing,

healthcare, education, energy,

financial services and agriculture.

The Financial Inclusion Fundinvests in a range of

microfinance institutions andfunds serving the lowest socio-

economic segments in emergingeconomies.

Bamboo Finance Funds

Financial Inclusion Fund


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XAC BANK(Mongolia)

APOYO INTEGRAL (El Salvador)

EFC(Zambia)EDPYME NUEVA VISION (Peru)

SICSA

AAVISHKAAR

AFRICAP

FASO (Uganda)

APOYO INTEGRAL (Mexico)

BANCO FIE (Bolivia)

FIE GRAN PODER (Argentina)

BANCO WWB CALI (Colombia)

CREATIONINVESTMENTS

APOYO INTEGRAL (Guatemala)

CFE (Panama)

SVASTI (India)ASMITHA (India)

MIBANCO (Peru)

AMfB(Nigeria)

BANCO POPULAR (Honduras)

BAI TUSHUM

(Kyrgyzstan)CHF (Romania)CHF (Lebanon)

CFE (Tanzania)

EAMF (Cameroon)

EASL(Ghana)

CFE (Uganda)

FINAE (Mexico)

BILLE (Brazil)

IMMERSION (Pakistan)

GREENLIGHT PLANET (India)

VAATSALYA(India)

HUSK (India)

VORTEX(India)

JOMA (Vietnam, Laos)

KOPO KOPO (Kenya)

VIDAGAS (Mozambique)

CARECROSS (South Africa)

Financial Inclusion Fund Current InvestmentsOasis Fund Current Investments Office

Bogot (Colombia)

Geneva & Zurich (Switzerland)

Singapore

Luxembourg

ORB (India)

Global Team Managing Global Portfolios

Nairobi

BRIDGE (Philippines)


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ConfidentialJuly 2012

12

Focus on growth-stage companies providing products

and services to low-income consumers in developing

and emerging markets

A Global Multi-Sector Private Equity Fund

Education

Oasis Fund: Portfolio of Companies

Mexican financial institution providing loansto University level students from low andmiddle income households.

Operates K-12 schools pin India providingaffordable education to students in semi-urban areas.

Operates a network of hospitalsproviding affordable primary andsecondary care in rural and semiurban areas in India

One of the few micro venture fundsin India focused on investing in earlystage social enterprises.

AavishkaarIndia MicroVentureCapital Fund(AIMVCF)

Combines cutting-edge technologywith innovative distributionnetworks to manufacture and selllow-power LED lanterns at low cost.

Provides electricity to ruralhouseholds and businesses usinglocally based biogas plants that arepowered from rice husk.

Manufactures and sells solarphotovoltaic and solar-thermalsystems in rural/semi-urban areasof India through a unique networkof direct branches.

Provides access to affordablehealthcare in South Africa with afocus on primary care services,HIV/AIDS testing / treatment, andthe manufacturing and distribution

of low-cost generic medicines.

Housing project in Brazil

focused on construction ofaffordable houses to low-income families.

Affordable housing projectthat develops, builds andsells homes targeted at lowand middle income familiesin Lahore, Pakistan.

Healthcare

Entrepreneurship

Energy

Sells LPG to rural customers inMozambique primarily to ruralhealth centres to power vaccinerefrigeration units.

Livelihood

Operates a chain of bakeries andcafs in Southeast Asia providingemployment to severelydisadvantaged women who arevictims of domestic abuse, sexualviolence or trafficking.

Housing

Designs, develops, anddistributes low costATMs for semi urbanand rural areas in India.

Financial Services

Debt fund created toprovide financingprimarily to second andthird-tier MFIs in Central

America.

Agriculture

Coconut oil processorincreasing income for farmers,workers, and micro franchisersin rural Kenya and Tanzania.


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Broad Requirements for a Business Plan

A business model that is financially sustainable or has a clear path toward sustainability with significantsocial impact.

Business Overview

Brief description of facilitiesand/or services provided. What

the company does.

Social Mission / Scope

Brief description of what the impactis, how it is achieved and details onimpact till date

Management / Founders

Brief bios of Founders and KeyManagement (current andprospective) team.

Shareholders / Partners

Brief background on existinginvestors, advisors and partners

Business Model

Brief description on how thecompany executes its business.

Description of revenue sources.Organisation Chart. KeyGeographies.

Growth Plans

Brief description on what and how

the Company plans to grow.Expected financial and operationaltargets.Details on potential impact.

Use of Proceeds

Investment amount required anddescription on use of proceeds.

Market Analysis

Market size/ potentialCompetitive analysis

Regulatory risk assessment

Financial Overview

Historical (2-3 years) and future (3

to 5 years)Operating figuresIncome Statement figuresBalance sheet figures


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Broad Investment Overview

Investment Criteria

Investment Requirements

1. Social Impact : Product or service that directly benefits low income communities or integrates them in a value chain.2. Stage of Business: Growth or expansion phase. At least three years of operating history.3. Financial Requirement: At least US$500,000 of annual revenues.4. Legal Requirement: For-Profit registered Company.5. Investment Size: Minimum investment of US$3mn.6. Sectors: Healthcare, Energy, Education, Housing, Clean Water, Sanitation, Livelihood and Financial Inclusion.7. Geographies: All.

1. Shareholding: Significant minority. At least 20% and up to 40%.2. Board Seat.3. Typical equity investor rights right of first refusal, anti-dilution, tag, drag, affirmative rights etc.4. Instrument: Equity or convertible debt

Investment Readiness

1. Audited Financials2. Governance Structure existing board structure and influence on business strategy3. Internal controls risk management systems and process4. Reporting structure periodicity, transparency5. Business viability based on onsite financial, social impact and legal due diligence conducted to analyse, review and substantiate the

business plan and operations .

Post-Investment Value-add1. Strengthening governance, financial management and internal controls2. Building organizational capacity3. Facilitating international expansion plans4. Enabling both debt and equity fundraising


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THANK YOU

www.bamboofinance.com/impact-report/

Learn More About the Progress of Our Portfolio by Downloading

the Bamboo Finance 2013 Impact Report

[email protected]

6. Bamboo Ib Workshop Sep16 Vf

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