United Kingdom (UK)
The Department for International Development (DFID) administers UK’s overseas development aid. DFID works with other UK government departments, which also spend UK overseas development assistance in line with the government’s UK Aid Strategy.
DFID leads the UK’s work to end extreme poverty. It tackles the global challenges of their time including poverty and disease, mass migration, insecurity and conflict. Its work is building a safer, healthier, more prosperous world for people in developing countries and in the UK, too.
The UK’s development finance institution CDC is the oldest of its kind. It is a public limited company wholly owned by the UK government. Its mission is to support the building of businesses and creation of jobs in Africa and South Asia by providing scarce and patient capital to businesses and entrepreneurs. CDC invests directly through equity, debt, mezzanine finance and guarantees to businesses, and indirectly through supporting fund managers.
The Independent Commission for Aid Impact (ICAI) is an advisory non-departmental public body responsible for scrutiny of UK aid spending. ICAI reports to the International Development Committee of the UK Parliament and thus contributes to the accountability of UK Official Development Assistance (ODA) on behalf of the UK taxpayer.
Inclusive Business in Private Sector Promotion
In 2017, DFID published its first Economic Development Strategy. It focuses on trade and investment as an engine for poverty reduction, aiming to build the potential for developing countries to become international trading partners, increase job growth and integrate developing countries into global value chains. The approach is also in the UK national interest as it strengthens UK trade and investment opportunities. The UK’s exit from the EU creates an opportunity to bring together UK trade and investment policy, aid that unlocks barriers to trade, and investment promotion and job creation to reduce poverty. The 2017 strategy highlights the UK’s commitment to
- Stimulating foreign direct investments (FDI) by reducing barriers to accessing developing markets and working with international companies on business projects with proven benefits for rural communities
- facilitating investment and export sourcing from large international companies and bringing local SMEs into supply chains
- improving the enabling environment for business
- partnering with firms to test new business models, scale up existing successes and encourage replication by others
- prioritising high relevance sectors such as transport, water and communications infrastructure (which can be vital to private sector investment and building competitive businesses) and affordable energy access for the poor
- promoting commercially-viable agriculture (e.g. linking smallholder farmers to markets, supporting rural SMEs)
- fostering financial technology innovations to expand affordable access to financial services
- promoting peer-to-peer finance models to allow small businesses in developing countries to raise investment capital
DFID works in countries across Africa, Asia and the Middle East, many of which are fragile or at risk from fragile neighbours. CDC focuses on Africa and South Asia.
To catalyse the markets for impact investment, to stimulate investment into businesses that benefit poor and low-income people through improving access to affordable goods and services and enabling income-generating opportunities at the base of the economic pyramid (BoP).
The Impact Programme has three components, the first of which was transferred to CDC’s balance sheet at the end of 2017:
- Investments through two funds – the Impact Fund and Impact Accelerator – transferred to CDC in September 2017.
- Technical assistance for underlying investments.
- Grants (at a systems-level) to a range of market building partners.
To develop projects, which generate commercial value whilst improving the lives of the poor in developing countries.
1. Applying a market systems approach in a country window; 2. A Business Partnerships Fund (BPF), which provides support to Multinational Companies (MNCs);
- A Core Fund supporting MNCs to conduct commercial, co-financing projects that help MNCs to overcome barriers when developing IB models;
- A Replication Fund;
- Helping DFID engage more effectively with multinational companies and build public-private partnerships through DFID Support Service;
3. A ‘company-led’ window applies the Market Systems approach but selects markets based on innovation.
Non-profit innovation fund.
To identify and support innovative solutions to development challenges, which show proven, cost effective impacts that vastly exceed current practice.
The programme accepts applications through its website and a panel of experts decides whether to fund the projects through grants and risk capital.
To improve access to jobs and economic opportunities for local people in and around the oil and gas sector in Eastern Africa.
Building strong partnerships with the private sector and standards-setting bodies to ensure technical and vocational education and training provision is directly relevant to the industry and its supply chains.
To enable developing countries with oil, gas and minerals to transform these resources into growth and poverty reduction by raising global standards of transparency, increasing accountability and improving capacity to manage extractives.
The programme helps build international standards and rules on transparency and accountability in the extractives sector and helps cement G8 commitments. It also supports the enabling environment in the extractives sector in its focus countries and more broadly.
To support scaling up of and lending to SMEs through partnership with mainstream commercial banks, leasing companies and other non-banking finance companies in DFID priority countries.
The initiative provides banks with risk sharing mechanisms, technical assistance and advisory services as well as improved credit history information and referencing in support of scaling up their financing to SMEs.
The BEAM Exchange is a specialist platform for information exchange and learning about market systems approaches to reduce poverty.
The Market Systems Development Platform (MSDP) works with donor agencies, project managers, businesses and communities to deliver more efficient markets that contribute to sustainable, private sector-led growth that benefits the poor. By supporting the design of programmes that better understand the role of the poor as consumers, producers and entrepreneurs, the MSDP can help build economic resilience and support poverty reduction.
To identify and support early-stage business ventures across 8 countries. The programme aims to reach 200,000 girls with products, services or opportunities for income generation, which contribute to their economic and wider empowerment and kick-start the wider market for such products and services.
Up to four nine-month accelerator programmes, providing grant funding and technical assistance to drive the business models forward and ensure that products reach girls directly and at scale
The Girls’ Education Challenge helps up to a million of the world’s poorest girls to have an opportunity to improve their lives through education.
The initiative calls on NGOs, charities and the private sector to find better ways of getting girls in school and ensuring they receive a quality of education to transform their future.
To mobilise private sector investment in African agriculture to create jobs and raise farm incomes.
Brokering public private partnerships and coordinating investments along priority value chains. Demand driven, based on country’s CAADP plans and private sector interest. Grow Africa works to bring together public and private sector players, mobilising Letters of Intent.
To scale innovative and sustainable mobile services in emerging markets.
Building synergies between start-ups and mobile operators.
AgDevCo consider investments in primary agriculture or processing for crops, livestock and fisheries.
Operates across the agricultural value chain: supplying farmers with inputs to create benefits along the supply chain, helping farmers to manage their crops and livestock more effectively, improving farming practices and governance systems for immediate financial benefits and to secure sustainable partnerships, connecting farmers to long-term market opportunities and improving logistics, warehousing and transportation to facilitate cost-effective supply.
To catalyse changes leading to the efficient trade of staple foods across the region. To stimulate innovative business models that deliver commercial benefits, solutions to market failures in regional food staple markets as well as jobs, income and market access for the poor and smallholder farmers.
The programme has both challenge fund projects and development fund projects.
To use market-based approaches to meet low-income household needs in developing countries around water, sanitation and hygiene (WASH) and energy.
It funds and provide technical and operational support to business and research projects.
Private sector: Innovative businesses
In addition to funding the initiative, Sida contributes to IB by engaging in dialogue and networking with the other BCtA funders.
Objective: To accelerate progress towards the SDGs.
Activities: Challenging companies to develop IB models, engaging people at the BoP as consumers, producers, suppliers, distributors, and employees.
Through BCtA, over 200 companies have committed to improving the lives and livelihoods of millions of people.