Capturing systemic change from challenge funds lei wageningen 15 june 2012
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Capturing Systemic Change from Challenge Funds LEI WAGENINGEN 15 JUNE 2012. David G.V.SMITH [email protected] AECF is a fund of donor money available to the private sector on a competitive basis. Grants and repayable grants. $0.25mn- $1.5mn. Six year contracts.

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Capturing Systemic Change from Challenge Funds LEI WAGENINGEN 15 JUNE 2012

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Capturing systemic change from challenge funds lei wageningen 15 june 2012

Capturing Systemic Change from Challenge FundsLEI WAGENINGEN 15 JUNE 2012

David G.V.SMITH

[email protected]


Capturing systemic change from challenge funds lei wageningen 15 june 2012

AECF is a fund of donor money available to the private sector on a competitive basis.

Grants and repayable grants. $0.25mn- $1.5mn. Six year contracts.

AECF is a special partnership initiative of the Alliance for a Green Revolution in Africa (AGRA).

Initial capital was US$36m; now over US$150m – and growing...

Offering competitions on continental, country or sector level “Windows”

What Is the AECF?


Capturing systemic change from challenge funds lei wageningen 15 june 2012

Aims and Objectives

  • Objective: Increase jobs and incomes for large numbers of people living in rural areas across Africa.

  • Purpose: to make agribusiness, finance, renewable energy and information market systems work better for the poor in rural areas in Africa


Capturing systemic change from challenge funds lei wageningen 15 june 2012

89

241

537

4230

6749

14 Rounds/Competitions

5 June 2008 to

31st December 2011

Performance to date

Achievements to Date

Awarded grants

Business plans

Shortlisted for IC

Concept notes submitted

Registered companies


Achievements to date

Achievements to Date

  • 89 projects in 17 countries in Africa

  • US$ 65 million committed (US$ 30 million grant, US$ 35 million repayable grant)

  • US$ 245 million matching funds committed

  • Estimated 3 million rural people will benefit from these projects


Finding the right projects

Finding the Right Projects

We seek projects that are commercially motivated & innovative to achieve systemic impact

  • Commercial Motivation: Scale required for systems impact; scale will only be reached if business model is (very) profitable

  • Disruptive Innovation: as a key indicator of systemic change potential

    • Upsetting the market such that others will copy and replicate – the more innovative the better

  • Principle: Start races rather than picking winners


The market system and the aecf

The market system and the AECF

SUPPORTING

FUNCTIONS

MARKET PLAYERS

Private sector

Government

Demand

Supply

Membership organisations

Informal

networks

RULES

Not-for-profit sector

Information

Infrastructure

Related

services

Informing & communicating

CORE

AECF

AECF

Setting & enforcing rules

Regulations

Informal rules & norms

Standards

Laws


What is meant by systemic change

What is Meant by Systemic Change?

What is it?

Regulatory change

Changes in Factor markets

Crowding-in

Copy-cat

Innovation

How do you find out about it ? Ask the business

Laws/regulations formal or informal. Barriers and what you will do about them?

Market Information barriers and changes you will make?

Access to inputs and skills and the changes you will make?

Describe 3- don’t give us a wish list!!.

8


Measurement and accountability

Measurement and Accountability

Measurement

Case Studies

Fund Manager + Validation

Business

Fund Manager

9


Makera rural cattle scheme

Makera Rural Cattle Scheme

Copycat of other buyers to get improved animals?

Systemic

Change

Crowding in of other businesses?

Financial benefits to rural households

Development

Performance

Sales, cost of sales, no sold purchase price gross profit

Jobs FTEs

Created

- team, building

Business Performance

Change in behaviour. increased supply of steers to feedlot

Fattened animals for sale

Improved health and genetics of herd

Outputs

Production of calves for sale

Purchase feed

Provide extension and support

Improved public relations in region

Procurement & transport of cattle/calves to feedlot

Improved communication with farmers

Weekly dipping of animals

Building, Recruiting &training Makera Extension team

Construction of feedlots

Rehabilitation of dip tanks

Mobilization of community and leaders

Activities

Inputs

AECF Grant

Repayable grant

Matching Funds


Capturing systemic change from challenge funds lei wageningen 15 june 2012

Steps with the Businesses

Step 1

Ask the business to define the key development indicators and systemic impacts it will achieve

Contract/M&E Workshop : Redefine all the key indicators Define Baseline and need for a baseline study

Step 2

Step 3

Set the indicators and targets prior to contracting the business. Finalise a results chain at site visit

Step 4

The business reports on key measurable indicators quarterly and development impacts twice annually

The FM validates the indicators against the results chain every six months.

Step 5

Step 6

Additional Steps: Case studies. Longitudinal Impact


Capturing systemic change from challenge funds lei wageningen 15 june 2012

Systemic Change and Challenge Funds

Innovation is the key to systemic change in markets

The key success is in appropriate project selection

It is the innovative business that initiates systemic change. The Fund Manager is not a market facilitator!

The business can report on systemic change but cannot be responsible for measuring it.

Challenge Funds are a cost effective means of achieving systemic change- but be patient for results.


Capturing systemic change from challenge funds lei wageningen 15 june 2012

THANK YOU


Capturing systemic change from challenge funds lei wageningen 15 june 2012

ADDITIONAL SLIDES


Project examples small holder improvement

Project ExamplesSmall holder Improvement

  • Bio United

  • Ltd

  • Makera Cattle Company

  • Zimbabwe

  • Sierra Leone


Input supply

Input Supply

  • Agrobiotech

  • Burundi

  • Kencor Management

  • Services (pvt) Ltd

  • Zimbabwe


The market system and the aecf1

The market system and the AECF

SUPPORTING

FUNCTIONS

MARKET PLAYERS

Private sector

Government

Demand

Supply

Membership organisations

Informal

networks

RULES

Not-for-profit sector

Information

Infrastructure

Related

services

Informing & communicating

CORE

AECF

AECF

Setting & enforcing rules

Regulations

Informal rules & norms

Standards

Laws


Process of developing results chains in the aecf

Process of developing results chains in the AECF


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