One of the main challenges of development cooperation remains on how to fuel economic growth in an inclusive, socially and environmentally sustainable manner, in order to deliver maximum benefits for current and future generations. UNCDF’s approach, within its unique financial mandate, comes two-folded. Through its two areas of expertise, Inclusive Finance and Local Development Finance, UNCDF promotes financial and territorial inclusion by providing investment capital and technical support. The belief is that, though the public sector has a crucial role to play, inclusive growth and hence, poverty reduction can only be achieved by also supporting the private sector and creating linkages and synergies between the two sectors.
While UNCDF’s Inclusive Finance Practice area provides seed capital and technical support through Inclusive Finance programmes to ensure that more households and small businesses gain access to financial services, the Local Development Finance practice area re-invests international and domestic resources back into local economies and local services through, for example, fiscal decentralization, project finance and climate finance. UNCDF’s ability to provide risk capital directly to the private sector is helping bring new financial products to underserved and hard to reach markets, spurring innovations, expanding opportunities and reducing vulnerabilities. The innovative nature of UNCDF’s approach helps enhancing existing value chains by leveraging private investments in local economies, creating a business-friendly environment, mobilizing private savings for Local Economic Development, promoting and nurturing the local private sector and particularly private enterprises.
In the context of UNCDF’s work on private sector support, it was a natural step to join the Aspen Network of Development Entrepreneurs (ANDE) in November 2013. ANDE, part of the Aspen Institute, is a global network of organizations that propel entrepreneurship in developing countries as a way to create prosperity for the world’s poor. ANDE members support “the missing middle”, believing that targeted support for small and growing businesses (SGBs) represent the engines of growth in emerging markets. They provide critical financial, educational, and business support services to SGBs based on the conviction that SGBs will create jobs, stimulate long-term economic growth, and trigger social benefits.
The close dialogue that ANDE enables between its more than 190 member organizations, including leading investors, capacity development providers, foundations, banks, corporations, and research institutions, helps triggering new ideas and fruitful partnerships. UNCDF is excited to be part of this network through its membership in ANDE.