Women’s Regenerative Agriculture Project - Good Business Foundation and Good Business Impact Fund
The Good Business Impact Fund provided a loan alongside a philanthropic grant from Good Business Foundation to support women farmers to enable them to increase sustainable practices and grow new markets.
- Investor: The Good Business Foundation
- Source of finance: Grants and Impact Investment
- Financial instrument: Loans (Recoverable and non-recoverable)
- Sector: Philanthropy, Impact Investment
- Geography: Pacific
The Good Business Foundation believes in commercially minded but impact oriented small and medium sized businesses. Small and medium sized businesses make up 90% of businesses worldwide. They are underserved – and their impact sometimes unrecognised but as Good Return (and others) have called them, they are the ‘missing middle’. Too large for microfinance support and too small for mainstream supports and banks. The commercial SME sector employs over 50% of people globally and creates the majority of new jobs. Seven out of ten new jobs in emerging markets like the ones Good Return supports.
Women led SMEs are the fastest growing market segments in most countries. The World Chambers Federation has just established a Global Women’s Council. Mostly because of the growing demand in this area. - Women invest up to 90% of their earnings back into their families and communities (compared to around 35-40% by men) - Research has shown that $12 trillion could be added to global GDP by advancing women’s equality. So, with stats like this it is compelling to say ‘give all the money to the women’! But we and other supporters need to back organisations with strong experience in the cultures and contexts of these places.
The Good Business Foundation applies 4 M’s that they discuss with current and prospective partners:
1. Mission
We want to understand how our partners see the ‘mission’ of business or the business community as they see it. In our mind, future businesses must be commercially minded but also impact oriented to succeed. If we are going to work with business, we must believe that business can be a force for good. We must interrogate the role of business and businesses mission (beyond just making money) in community. It must move beyond simple notions of just ‘give the women the money’ but it must include women as part of the solution.
2. Models
This leads on from the first point. What kinds of models does the organisation work with to enable commercially minded and impact-oriented businesses? One context may look different from the next but in the end of the day it is about helping to create and support profitable but also impactful businesses into being. And that those businesses are the mainstream (not the exception).
3. Markets
How is the organisation working to support enabling markets and capital? It is one of the greatest risks for SMEs. According to a 2023 report by the International Finance Corporation (IFC), there is a $300-billion global gap in financing that exists for women-owned small and medium-sized businesses. Women entrepreneurs and business owners can be the best they can be but if the market and capital is not there or is not right then they will not succeed. Often the downside can be worse than the upside. This is one of the reasons why we are investing in Good Return’s Impact Fund.
4. Mindsets
This is for us all; this comes back to my first point about the world we want to see and how we contribute to it? What does a ‘good business look like’? It also means that we need to work on this as a primary building block. It also means that when supporting women business owners, we help build confidence and resilience despite the challenges. If we and the businesses we support have the right mindset then they are more equipped to take on those challenges.
A project where the Good Return Impact Fund supported by the Good Business Foundation have applied a blended finance is in regenerative agriculture. In West Java in Indonesia the Impact Fund provided a loan guarantee via an Australian bank to underwrite loans to women farmers in Indonesia and Cambodia to grow their agriculture enterprises. This enabled women farmers to access much needed inputs to support the growth of their farm produce. The Good Business Foundation also provided philanthropic capital to Good Return to support these women farmers in capacity building such as value adding to the products they produced, reducing waste, marketing techniques, farming with more sustainable practices and how to best access markets. This work enabled women led businesses to pay back their loans and to expand or stabilise their businesses.
A film about the visit with the farmers in West Java, Indonesia, can also be found here.
Final Insights
Small and medium business have an important role to play in the climate transition. They are active across many supply chains. They can reduce their own emissions in 1,2,3…
High impact philanthropy can include grants and impact investment that play an important catalytic role in blended finance solutions for small and medium businesses operating for purpose.
Philanthropy
Philanthropy includes grants for charitable purposes, as well as allowing an endowed foundation to allocate part of its corpus to impact investment in climate transition funds and companies.
Sustainability for Strategic Advantage
Strategy
Sustainability for Strategic Advantage
A one-day program for senior and mid-level executives, this course is distinct in approaching sustainability as a strategic issue, with a particular focus on climate change.