Spice, a “time bank,” named for its mission to “add some spice” to the organization of society. Like many other community currency initiatives, Spice isn’t aiming to replace conventional money but rather to supplement it: “Our ambition is to counterbalance what the mainstream system is not good at.”
A forward-looking company is radically changing the rules of the game in the financial industry. This is the view advanced by Lenddo, a social enterprise started in 2011 with the goal of economically empowering the middle class in developing countries. Founded by Jeff Stewart and Richard Eldridge, two businessmen who formerly worked in the financial and technology industries, Lenddo is based in Hong Kong and has a data science team in New York City. Despite a small staff of only 66, the company has grown to more than 380,000 members in the Philippines, Colombia and Mexico in the past two years. This extraordinary success is due to the company’s innovative online model.
Sunnie Toelle provides her opinion on the recent state of the financial industry in Switzerland. ZURICH, Switzerland – Peter Munk is a poor young man desperately wishing to be wealthy. Tempted by the evil ghost of the woods, he trades his warm heart for riches and a heart of stone. Even though Wilhelm Hauff penned this Black Forest parable about the neglect of ethical values in favor of uninhibited materialism in 1827, it appears today timelier than ever. In the past years, headlines of calculated, cold-hearted financial decision-makers have flooded the news.
Human capital contracts are a new and innovative method to finance university and post-graduate education. These equity-like arrangements could provide a solution to education accessibility issues for students in developing countries. In 2008, four professors from the Harvard Business School published a book entitled Entrepreneurship in the Social Sector. They suggest that a business-like approach in the social sector would help to maximize its impact and value.
Despite recent drawbacks, the Eurozone is out of the emergency room after years of trials and tribulations. But the latest report by the European Commission throws some doubt on this assessment. It is clear that the Eurozone has issues to tackle that are beyond the immediate economic collapse of some of its members.
At a Wall Street Journal conference in 2009, then White House Chief of Staff Rahm Emanuel stated that one should never let a crisis go to waste. In this sense, the 2008 financial crisis is just like any other crisis: a disaster and an opportunity. A disaster because it led to the destruction of $4 trillion worth of global assets, millions of people losing their livelihood, and bringing the whole economic system incredibly close to a cataclysmic meltdown.
Social capital markets attempt to connect social entrepreneurs with impact-oriented investors. The ability to measure “impact” is still considered to be important in order to create such marketplaces, even though this measurability might often not be given. To create market structures that efficiently transfer resources from investors to entrepreneurs, an old resource rises anew – trust! This would be a lesson from SOCAP 2012. The promise
A new understanding of value creation is at the core of a social capital market.
This article is cross-posted in NextBillion. The Earth Security Initiative is bringing attention to the new investment agenda emerging around the notion of ecological limits. Among other things, argued its founder Alejandro Litovsky at SOCAP in Malmo last week, the limited quantity of resources like water and fertile land present a series of risks to investors, as well as opportunities for creating long-term value.
Changing Perspectives: Risk and Resilience
This initiative aims to focus financial markets and political leaders on ecological limits as an issue of economic risk and national security. Over the last year the Earth Security Initiative has launched high-profile agendas on resources like the the Amazon (Amazonia: The Focus on Risk) and fisheries (Fisheries: A Security System) which show why investors and policy makers must factor the risks of losing the resilience of these ecosystems. At the same time, the Earth Security Initiative calls upon investors and businesses to allocate capital in ways that build the resilience of natural capital and human security.
Impact investment is receiving increasing attention. It is seen as the financial sector’s answer to inclusive business to benefit the poor in developing countries. More and more capital is flowing into this sector due to popular demand. However, as for any incubator, the step from blueprint to scale is big and for social entrepreneurs, the step is even bigger as they are embarking on a journey that in most cases is truly innovative and hasn’t been done before. The solution, according to Acumen Fund and the Monitor Group lies with philanthropy, to use grants and donor aids as catalyst to get these social enterprises to the stage where they can start scaling up, the stage where impact investors come in.
The SOCAP conference in Malmö Sweden has gathered around 400 people interested and involved in investment with a social impact. One of the participants is Johan Sundholm from Mikrofinansinstitutet i Sverige (the Microfinance Institute Sweden) that is giving loans to the otherwise unbankable segment in society. The bank targets entrepreneurs and helps them to build their businesses in order to repay their loans. So far so good – we’ve heard it all before. But!
When I meet up with David Zetland, he’s chatting up two Forum attendees over complimentary drinks and light hors d’ouvres from the Brazilian Pavilion at Parc Chanot’s Palais Phoceen. Usually the center of attention by virtue of a lightning quick wit and polymathic knowledge, Zetland is skewering a newly-formed NGO designed to help investment banks and other financiers assess risks associated with climate change… “Which makes perfect sense,” proclaims a sardonic Zetland, “because NGO’s are so adept at evaluating investment risks and investment banks have no idea.” (more…)