G20 Finance Challenge Unlocking Funds for SMEs

G20 Finance Challenge Unlocking Funds for SMEs

14 winners attending G20 Summit next week

The G20's worldwide call to the private sector to unearth the best models for private-public partnerships to catalyze finance for small and medium-sized enterprises (SMEs) resulted in 14 winning proposals this week.

Called the G-20 SME Finance Challenge, the G20 partnered with Ashoka’s Changemakers, a pioneer in global competitions to solve social problems, with support from the Rockefeller Foundation.

The competition recognizes that social finance is at the forefront of supporting SMEs, which are often the largest source of job creation, especially in emerging economies. According to Changemakers, it is estimated only 20 per cent of small firms in low-income countries have credit access.

The challenge asked for proposals for how public finance can maximize the use of private finance in a sustainable and scalable manner.

Proposals were welcome from private financial institutions, private investors and companies, socially responsible investors, foundations and civil society organizations.

“The Rockefeller Foundation knows that investments by government, philanthropy and charity alone will unfortunately not be enough to solve the world’s most difficult problems,” says Rockefeller Foundation president Judith Rodin, in a press release.

“It is only through partnerships seeking out the best innovations that will engage a broad portion of the private sector and allow us to continue to solve the social and environmental challenges we confront,” she notes.

Sarah Mintz, community manager at Ashoka’s Changemakers, says surfacing innovation in a new way was an exciting part of the challenge.

"Looking for sustainable solutions with high impact and the ability to leverage public finance to scale dramatically and ultimately support SMEs in new ways is also very exciting,” says Mintz.

Canadian Prime Minister Stephen Harper revealed the competition June 26 as part of the G20 Business Summit and pledged $20 million from Canada to scale up winning solutions.

“The G20 is very much committed to finding solutions that will support the missing middle right now,” Mintz tells Axiom News.

She notes many small and medium-sized businesses are not receiving access to the funding they need and lack capacity-building support, as well as policy reform that would help them receive funds. These are the three areas targeted through the competition.

Eight judges selected the 14 competition winners out of more than 350 entries. G20 leaders committed to mobilize a public share of funding to implement winning proposals, with funding coming from development institutions and bilateral donors. IFC and the World Bank, the Asian Development Bank, the Inter-American Development Bank Group, the African Development Bank and the European Bank for Reconstruction and Development all indicated their support.

Successful entries demonstrated innovation, leverage, scalability, social and economic impact, and sustainability.

At least one solution targeted the geographic regions of East Asia and Pacific, Europe and Central Asia, Latin America and Caribbean, Middle East and North Africa, South Asia, and Sub-Saharan Africa.

The winners will be recognized for their innovations by G20 officials at the G20 Summit in Seoul, South Korea, Nov. 11-12, 2010.

“I’m really hoping to see a lot of interesting collaboration to come from the 14 winners that are going to be together in Seoul next week,” says Mintz, who will be at the event with the winners.

Mintz notes that through using an open-source platform all of the entries are archived on Changemakers, which may foster entrants to be identified by a funder or collaboration opportunity.

“When solutions are on the Changemakers platform in such a transparent way, exciting and unexpected collaborations take place. Investors are connected with entrepreneurs, the media is connected to grassroots stories, innovators find partners, and so on. Changemakers serves as a convening place for all of these powerful connections to take place,” she says.

There is a people’s choice recognition that will be given to three of the winners, based on people’s online votes until Nov. 5. To learn about the competition winners or to vote, click here.

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Jennifer Neutel's picture
Jennifer Neutel

Jennifer Neutel is a Story Advocate and Generative Journalist at Axiom News. She completed her Bachelor of Journalism at Carleton University in Ottawa in 2006, and joined Axiom News in 2007. She has taken on a variety of roles at Axiom including new social media intiatives and has a passion for creating strengths-based questions that can lead to positive change.

Contact Jennifer: jennifer@axiomnews.ca, or 705-741-4421 ext. 26.

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