Innovest recognises the current COVID-19 pandemic threatens an economic downturn not seen since the Great Depression. The International Labour Organisation (ILO) estimates that there could be 25 million jobs lost and additional losses in labour income could reach USD 3.4 trillion.

Emerging markets are set to bare the worst of these impacts. Foreign investors have pulled $83bn from emerging markets since the start of the crisis. Many small businesses, the engines of job creation in these markets, already operate at the margins of social protection, and will likely be the most impacted by the COVID-19 crisis negatively.

Through this severe crisis, Innovest Advisory is continuing its support to create and scale sustainable market-based solutions to development challenges aligned with the United Nations Sustainable Development Goals (SDGs).


Innovest works with a broad range of remarkable social enterprises in emerging markets who are having a catalytic impact on the lives of vulnerable populations in developing countries. These businesses include:


Pawame works to electrify and connect the African continent by offering affordable, reliable solar home systems on pay-as-you-go financing. Currently, Pawame operates in 14 Kenyan counties, including in Kakuma refugee camp which houses 120,000 refugees. In the past 3 years, they have reached over 13,000 households and continue to expand their products and services to reach more underserved families


Sierra Agra Inc, Sierra Leone’s only commercial juicing company which supports 3,500 of the country’s poorest smallholder farmers as an exporter of tropical fruit juice products to EU and North American markets. Their latest initiative, Project 10,000, vertically integrates with farming supply chains to pay village-level farmers greater and more reliable incomes.


KIMS Microfinance, which is the Somali market leader in providing sharia compliant microfinance services. Since 2014, KIMS has disbursed over $18m in financing to 18,200 clients. KIMS aims to enhance local economic development in Somalia by providing high-quality diversified microfinance services to low-income, economically active youth, women, displaced and rural communities, offering savings, microenterprise and SME financing. KIMS combines professional service delivery with competitive pricing, innovative products and supplementary non-financial services.


These businesses, whose core business models focus on providing quality products, services and employment for vulnerable, underserved populations, are now exposed to the economic and health impacts of COVID-19.


Pawame has wasted no time in implementing a COVID-19 Response Plan, built around the objective of “Keeping our business, our people, and our customers healthy”. Since masks are now required in public places in Kenya to slow down the spread of COVID-19, Pawame collaborated with staff member, Davis Okoth, to produce masks for the Pawame network. Davis is a talented cloth designer and is currently helping Pawame to distribute “Pawame Davis Masks” to staff, sales agents and technicians along with guidance on how to best use and wear a mask.


Pawame has also set up hand washing stations in many of its county shops, alongside KomeshaCorona health guideline posters. At their Nairobi HQ, almost all staff work at home, with essential operational staff given alternatives to public transport and maintaining social distance in rearranged, segregated work stations.

Emerging markets are set to bare the worst of these impacts. Foreign investors have pulled $83bn from emerging markets since the start of the crisis. Many small businesses, the engines of job creation in these markets, already operate at the margins of social protection, and will likely be the most impacted by the COVID-19 crisis negatively.

Likewise, KIMS Microfinance have drafted a Covid-19 Response plan that assesses health risks to both staff and the enterprises they serve as well as the financial stress it will place on clients businesses and the overall microfinance company. This has resulted in mandatory mask wearing and social distancing practices by KIMS staff, the provision of hygiene advice to clients and an institutional decision to pause all new lending and consider the rescheduling of client payment instalments on a merit basis.

Sierra Agri Inc. has learned from the experience of struggling through the economic impacts of a pandemic, having been formed out of the collapse of a previous business Africa Felix Juices, which went bust in the 2004 Ebola crisis. Prior to joining Sierra Agra as a Board Director and CEO, Stephen Gaojia (pictured right) was the National Ebola Coordinator of Sierra Leone’s battle to end the spread of the disease. He has been recently met with President Bio and his cabinet to offer his insights on how to keep COVID-19 cases at minimum levels. Learning from these lessons Sierra Agra has instituted a social distancing policy at its juicing facility and among its 3,500 network of smallholder farmers. Sierra Leone as a whole has seen low incidence of COVID-19 due in part to the high degree of government and societal mobilisation given the countries experience with Ebola.


These are strong examples of our partners’ adaptability to transform operations to be resilient against the pandemic while continuing to offer vital services to vulnerable populations. However, with the prospect of a prolonged period of lockdown, social distancing and economic shocks in the areas they operate, these businesses are almost certainly going to need additional financial and technical support from the development and impact investment community.


With the right external support and leadership from the likes Pawame, KIMS and SAI , the social enterprise sector can weather this extended shock to continue serving marginalised clients through these unprecedented times.

Find out more about the work of Pawame, KIMS and SAI at their websites:

https://www.pawame.com/

http://sierra-agra.com/

https://www.kimsmfi.com/

The COVID-19 crisis has exposed vulnerabilities in international aid and development finance cooperation, as governments prioritise domestic responses to the pandemic while NGOs and multilateral agencies are unable to effectively implement development projects due to safety concerns.

However, the crisis has also shown that private and public stakeholders are able and willing to collaborate in new ways to alleviate the effects of the pandemic where the need is most urgent; the World Health Organisation (WHO) has created the Solidarity Response Fund at short notice which has raised more than $200 million from private donors, Norway and France have both called for vast aid to be directed to African countries for pandemic response, the IMF has made $1trn in lending available while bolstering its debt forgiveness trust fund and numerous private companies such as Mercedes-Benz, Dyson and Google have begun using their core productive potential to find creative solutions for those in need.


As the threat of COVID-19 forces a new, distanced way of life for citizens across the world, Innovest remains as committed as ever to working with public and private capital to address the world’s most challenging issues in the world’s most vulnerable countries.


This work is desperately needed in these countries. As advanced health systems battle to avoid being overwhelmed by the virus, it is spreading to the world’s poorest and most vulnerable countries where it may cause far greater destruction. In fragile states, war zones and refugee camps, ‘flattening the curve’ is difficult for the millions that live in crowded conditions without regular access to water for handwashing. Staying at home is not an option for the extreme poor that have no savings to rely on. If they do fall ill, these populations face limited access to health systems that have almost no respiratory capacity.
From Innovest’s new virtual office, our support to develop high quality, market-based solutions with clients has become even more significant as a number of our partners reorganise their operations to offer services that are critical to the response of developing countries to this deadly, global pandemic:

Crown Agents, who are world class logistics and last mile health procurement specialists and were the logistics “spine” of the Ebola response in Sierra Leone in 2014, has an emergency COVID-19 team of over 30 staff across the globe who are working 24 hours a day to respond to the rising global needs, working with the 450 strong global Crown Agents movement.


Since Crown Agents began its COVID-19 Response in early March, it has procured and delivered over 275 tonnes of life saving medical equipment and supplies. It is currently working directly with over 45 countries to support their COVID-19 response, while negotiations are ongoing to expand this service to a group of 13 island nations. Crown Agents are in the process of delivering a shipment of 27 containers of essential supplies such as antibiotics, paracetamol and personal protective equipment to the 800 health clinics they serve under its South Sudan Health Pooled Fund, as well as hygiene and wash posters and the erection of COVID-19 screening tents.

Better Shelter is a humanitarian shelter specialist who provides safe, temporary structures that serve as health care facilities and accommodation for displaced persons all over the world. They have worked with partners such as UNHCR, MSF and UNICEF to establish healthcare clinics for asylum seekers in Mexico, to monitor and treat Ebola in the Democratic Republic of Congo and to serve primary healthcare needs in Bangladesh. Furthermore, the modular design of their structures enables flexible size and layout depending on facility needs, allowing for smaller healthcare modules that have been identified by authorities globally as key to COVID-19 disease management. In the current crisis they are seeing significant demand for their shelters as COVID-19 screening and isolation units both in refugee and non refugee contexts and in both developing and developed markets. One such example is their partnership with IKEA and the Swedish Red Cross to provide temporary health facilities outside of Swedish hospitals.

Innovest has provided strategic support to both of these organisations to help them efficiently pivot to respond to the crisis, including business and impact strategy, communication of their work, facilitation of capital raising and networking.As the development community races to reorganise operations to mitigate the consequences of Covid-19 among developing countries, these organisations are leading the way in providing support to vulnerable communities and less developed countries. Their experience will be vital as we enter the next phase of this pandemic.

Innovest, Founder and Managing Director, Justin Sykes recently authored an publication in on Social Finance in Guernsey. Commissioned by the Guernsey Community Foundation this report explores the potential application of Social Finance models in addressing some of the key current and future social policy challenges that Guernsey faces including the provision of health services.