Microfinance, the practice of making very small loans to people to support their businesses in developing countries, has been helpful to many, and is growing with the emergence of such partnerships as Kiva B4B. But what if your business is too big to be helped much from a microloan, but not big enough or your ideas/skills developed enough to warrant the attention of large scale venture capital? Agora Partnerships in Nicaragua provides one great example of how to bridge that gap.
Based in Nicaragua, they are an NGO with a deep commitment to developing and supporting sustainability minded businesses so that they can make an impact, both on those now employed by these organizations, and the communities surrounding that are the beneficiaries of a more ecologically benevolent business, whose success is therefore a financial support to that community as well.
How does socially responsible venture funding in a developing country such as Nicaragua work? The same as it does anywhere else, and perhaps with lessons for others elsewhere.
Agora lays it out clearly in four words: Identify. Advise. Invest. Support.
First they identify businesses that are socially responsible that want to grow their enterprise, create local jobs, and combat the poverty that is at times pervasive in their country. Once found, these businesses get help from Agora in identifying the constraints to their growth, whether financial, managerial, or conceptual. That in itself would be of tremendous benefit to any business, but for some, Agora goes further: They choose the promising prospects and give them access to capital that is of a long term nature. For others that may not necessarily have capital needs but could use access to a broader network of contacts and support, Agora Partnerships can provide that too.
What are some examples of businesses they support? As they put it, “Agora Entrepreneurs come from all walks of life but share an intense energy and passion to create change.” One particularly successful example is Llamadas, who have created among other things pedal powerful mobile phone booths, capable of supporting multiple phones and bringing affordable access to communication to a wider range of the population. Another is TecnoSol, which at this time installs 500 small scale solar systems a month, at a price accessible to rural farmers, area medical clinics, and grocery stores.
In what is looking to be an ongoing venture, TecnoSol and Llamadas partnered to create No Apagones, or No Blackouts, to promote CFL lighting among the rural poor, a market segment one might dismiss as unconcerned with ecological benefits and without the income to buy these lights. Through keen insight into what matters most to them and skillful execution of explaining how and why they are relevant to their needs, It’s proved a tremendous success, inspiring competition among neighboring counties to see who could buy the most.
Other examples include a fledgling bamboo house builder, an eco immersion tourist company, and an organic restaurant.
Agora Partnerships model is one that people from any part of the world could learn from, and I suggest you investigate it for your region, and perhaps create something like it yourself!
Readers: What are other examples of deep support for innovation and socially responsible ventures you know of, whether if developed or developing countries? What ideas do you have for improving what’s currently out there?
Paul Smith is a sustainable business innovator, the founder of GreenSmith Consulting, and has an MBA in Sustainable Management from Presidio School of Management in San Francisco. His overarching talent is “bottom lining” complex ideas, in a way that is understandable and accessible to a variety of audiences, internal and external to a company.