Changing the Poverty Reduction Paradigm through a Private Equity Strategy

Given the very recent demise of USAID and major cutbacks in European foreign aid to fund defense, the suffering being endured by the world’s poorest is about to become immense. Poverty, widening income divides and massive youth unemployment, have propelled tens of thousands of migrants to risk their lives and travel north to the United States and Europe.

Essentially if you want to “Save the Children” you need to get their parents jobs.

But sustainable job creation requires equity investment and most social impact and ESG investors, National and Global Finance Corporations and Regional Development Banks do not make equity investments at the “Base of the Pyramid” (people making under $4 a day) because they are risk averse and so “the poor stay poor.” This means that 25% of the global population or one in 4 people who make under $4 a day will be left in a cycle of ongoing poverty from generation to generation.

The session will focus on the social “offshoot” of one of the largest retail scaling models on the planet which is franchising. The Foundation is focused on engaging social impact equity investors in seed, early-stage and mature social franchises that meet local poverty reduction challenges in health, sanitation, nutrition, education, agriculture, energy, housing, etc. and provide jobs for unemployed youth, especially women, to deliver affordable social impact for low-income communities. The session will address how social franchising can mitigate investor risk and address the “elephant in the room” which is the lack of socially impactful equity investments at the Base of the Pyramid.

Several examples of social franchises will be discussed including highly innovative seed stage ventures in health diagnostics, micro-grow climate resistant high protein mushrooms, micro production of biogas, and more mature social franchises in water distribution, pharmacies, childcare and more.