FY2020

Annual Report

INITIATIVE FOR SMALLHOLDER FINANCE/ISF ADVISORS

NOVEMBER 2020

The publication was produced for review by the United States Agency for

International Development. It was prepared by ISF Advisors.

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The Initiative for Smallholder

Finance / ISF Advisors FY2020 Annual Report

Award No. AID-OAA-A-15-00068

DISCLAIMER

The author’s views expressed in this publication do not necessarily reflect the views of the

United States Agency for International Development or the United States Government.

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Table of Contents

Acronyms 5

Glossary 5

Executive summary (Performance Narrative) 6

ISF overview 9

Management entity information 9

Geographic scope 9

List of program partners 10

Program activities and highlights 10

Administrative/governance 10

1. Learning pathway 11

2. New infrastructure pathway 15

3. Intermediation and facilitation pathway 17

Key accomplishments 19

Future directions 22

Appendices 23

Management and Administrative Issues 23

Other topics and issues 23

Facilitation and Conferences 23

Team members 26

Project list 27

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Acronyms

Glossary

CGAP

CPIC

CSAF

DAI

DFID

FAO

FTF

GAIN

GDI

GIIN

IDH

IFAD

ISF

MSME

RAFLL / RAF Learning Lab

SHF

USAID

USG

Consultative Group to Assist the Poor

Coalition for Private Investment in Conservation

Council on Smallholder Agricultural Finance

Development Alternatives Incorporated

Department for International Development

Food and Agriculture Organization of the United Nations

Feed the Future

The Global Alliance for Improved Nutrition

Global Development Incubator

The Global Impact Investing Network

IDH the Sustainable Trade Initiative

International Fund for Agricultural Development

Initiative for Smallholder Finance

Micro, Small, and Medium Enterprises

Mastercard Foundation’s Rural and Agricultural Finance Learning Lab

Smallholder Farmer

U.S. Agency for International Development

United States Government

Innovative business transactions

Medium enterprises

Micro enterprises

Product or market specific funds

Rural enterprises

Sector shaping initiatives

Small enterprises

Smallholder farmer

Business transactions or models that are new or unique to business as usual

Medium enterprises are defined as enterprises with 50-100 employees

Micro enterprises are defined as enterprises with <10 employees

Funds that focus on a specific product or market

MSMEs that are based in a rural region and/or serve a rural market

Projects, models, or initiatives that contribute to a change in the sector

Small enterprises are defined as enterprises with 10-49 employees

A smallholder household is a household producing crops and/or livestock

on 5 or fewer hectares of land, or nomadically

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Executive summary (Performance Narrative)

Project summary

ISF Advisors (formerly known as the “Initiative for Smallholder Finance”) is an advisory group committed

to transforming rural economies by delivering partnerships and investment structures that promote financial

inclusion for rural enterprises and smallholder farmers. We are housed within the Global Development

Incubator (GDI), an organization that builds startups, incubates partnerships, and strengthens existing

organizations for social impact around the world. We have three key impact pathways: i) learning pathway

to build knowledge and define opportunities to lead to action from others; ii) new infrastructure pathway to

facilitate and broker new partnerships and initiatives; iii) intermediation and facilitation pathway to support

early stage investment ideas as a design catalyst. We conduct these projects globally, historically working

on projects in Africa, Central and South America, Asia, and Europe.

FY2020 performance

Indicator1 Results

Amount of funding (investment) mobilized

through ISF intermediation activities (FTF

indicator)

$26M total value mobilized ($20M committed from

USG and $6M from private institutions)

Number of new institutions, partnerships, and

initiatives established

1 new institutions, partnerships, and initiatives

established

Number of advisory roles ISF participates in 10 advisory roles

Number of organizations using ISF insights to

guide activity

More than 58 organizations using ISF insights2

Key Metrics from ISF Briefing Notes, Pulse

Series, COVID-19 Emergency briefings, ISF

website, and State of the Sector Reports

12,269 total views of ISF’s Briefing Notes

10,722 total views of all Pulse blogs posted since

2017

9,254 total views of the COVID-19 Emergency

Briefs

10,286 views of “Inflection Point” (published

April 2016)

1,655 downloads of “Pathways to Prosperity”

(published November 2019)

In this fiscal year, ISF continued to build our work in our three impact pathways. In our intermediation and

facilitation pathway, we acted as a “design catalyst” to mobilize financing to rural enterprises and replicate

innovative financing models. We completed 8 projects and indirectly or directly mobilized $26M for rural

enterprises. Our current projects alone are expected to mobilize an additional $850M over the next 5-10

years. In our new infrastructure pathway, we supported the creation of initiatives to fill gaps in the industry

infrastructure. We directly participated in 10 advisory roles that helped to influence the sector and shape

our own work. ISF also brought about ~20 organizations together for regular meetings to discuss our new

research report. In our learning pathway, we continued to develop insights in the rural finance space that

both contribute to the development of the space and directly influence our project work. Our key

2 58 organizations have been recorded using ISF insights over the lifetime of the organization; ISF cannot determine

whether these organizations have used these insights in this fiscal year

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accomplishments were disseminating the State of the Sector report (titled “Pathways to Prosperity) released

in November 2019, publishing our COVID-19 Emergency Briefing series, and publishing a briefing note

on the "Role of Government in Agricultural Finance" based on deep dives in Uganda, Turkey and Mexico.

Successes

ISF’s key success was in progressing towards closing the $170B financing gap for smallholder farmers and

rural enterprises. Our projects allowed us to directly and indirectly mobilize $26M and our State of the

Sector Report, “Pathway to Prosperity” will further accelerate progress toward closing this gap.

Key enablers of our success include our team members and our blend of research with advisory work. Our

team includes a unique mix of management consultants form leading strategy firms and financial experts

from investment banking and impact investing backgrounds. This allows us to both design business models

and bring the right forms of capital and investment to address the underlying issue. ISF’s team is a key

aspect of its value proposition, bringing expertise and a network of funders and service providers to the

rural finance space. Meanwhile, our research both anchors our advisory work and allows us to indirectly

impact the entire sector. For example, our research is regularly used by leading donors and investors in the

rural finance space (e.g., USAID, Gates Foundation, Mastercard Foundation, DFID, Dutch Foreign

Ministry, etc.)

Challenges

A key challenge for work in our space is that it takes a long time to achieve meaningful change, and many

external dependencies beyond our control can shape outcomes. This means we must maintain persistence

and flexibility, adapting to areas of opportunity or interest as they appear. For example, we have been

involved in a multi-year coffee and cacao financing product design with Technoserve in Latin America

where important stakeholders have had fluctuating appetite and varying commitment levels. Moving this

initiative forward has required keeping an open mind around the specific product features and flexing

around partners’ interests. Uncertainty also requires us to balance our longer term ideas and research with

shorter term opportunities that stimulate immediate action and momentum.

Lessons learned

Through our projects this fiscal year, we have leveraged the key strengths of our core skillsets across

strategic consulting and investment structuring. While we have always understood the value of embedding

investment experience into the team, the synergy between these skillsets has brought success on a number

of recent projects. In particular, using consulting skillsets upfront has helped us to better influence the

direction of a project when we move onto complex facilitation and investment structuring. For example,

ISF’s pipeline analysis of SMEs for GAIN helped us to clarify the investment strategy and shape the design

of the N3F fund around tangible investment opportunities that address structural problems for nutrition

related enterprises seeking investment financing. The challenge moving into 2021 is to continue to work

together effectively as a remote-based team across geographies and skillsets.

Expected FY2021 activities

ISF will continue to act as a “design catalyst” for smallholder, SME, and rural enterprise financing in the

2020/2021 fiscal year. The team will focus on maintaining a portfolio of at least 5 advisory engagements

in the agricultural finance space, release a bi-monthly briefing series or blog post sharing lessons learned

from our work, convene practitioner meetings, and track performance and measure impact of pilots.

COVID-19 Effects

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As a response to the COVID-19 pandemic, the entirety of the ISF team has moved to a working from home

modality affecting our ability to partake in conferences as well as continue with relationship development.

We have therefore shifted our focus to phone calls to strengthen our network, while we continue to use

virtual platforms to participate in meetings and presentations with relevant stakeholders.

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ISF overview

ISF Advisors (formerly known as the “Initiative for Smallholder Finance”) is an advisory group committed

to transforming rural economies by delivering partnerships and investment structures that promote financial

inclusion for rural enterprises and smallholder farmers. Combining industry-leading research with hands-

on technical expertise, ISF develops practical, profitable, and sustainable rural financial solutions.

ISF was originally launched in May 2013, as a multi-donor initiative to make marked progress in addressing

the gap between the $240 billion in smallholder financing need and the $70 billion supply.3 In the first two

years of its mandate, ISF focused heavily on research and facilitation in order to help funders and impact

investors understand the rural finance market and more intelligently direct their grants and concessional

investments. Since 2015, with the support of USAID’s cooperative agreement, ISF added an advisory and

intermediation function in order to build on its research and directly intervene in the design, development,

and launch of innovative financial structures for rural finance.

Management entity information

ISF Advisors is housed within the Global Development Incubator (GDI), an organization that builds

startups, incubates partnerships, and strengthens existing organizations for social impact around the world.

Geographic scope

ISF is a global organization with projects and team members spread across the world. Historically, ISF has

worked on projects in Africa, South America, Asia, and Europe. Our geographic distribution is expanding

as we take on new long-term projects such as i) Alliance for Inclusive and Nutritious Food Processing

(AINFP), a 5-year project to provide assistance to food processors in Kenya, Tanzania, Zambia, and

Ethiopia, ii) Maximizing Opportunities in Coffee and Cacao in the Americas (MOCCA), a 3-year project

to support rehabilitation and renovation of coffee and cocoa in Guatemala, El Salvador, Honduras,

Nicaragua, Ecuador, and Peru and iii) the Cashew Catalyst Fund, a 5-year project to expand financing and

technical assistance access for cashew processors in Côte d’Ivoire, Ghana, and Nigeria.

ISF currently has 11 team members in the U.S. (New York City and D.C.), Kenya (Nairobi), the Netherlands

(Amsterdam), Spain (Madrid), and Australia (Brisbane). As the team grows, so does the geographic

distribution, allowing the organization to stay in touch with partners and stakeholders globally. This year,

3 ISF and RAF Learning Lab, “Pathways to Prosperity,” 2019

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as a response to the COVID-19 pandemic, the entirety of the ISF team has moved to a working from home

modality affecting our ability to partake in conferences as well as continue with relationship development.4

List of program partners

ISF collaborates with other organizations through our projects and research. For our AINFP project, we

work with Partners for Food Solutions and TechnoServe. On our MOCCA project, we work with

TechnoServe, Lutheran World Relief, Rikolto, World Coffee Research, ad Biodiversity International. For

our PROSPER Cashew project, we work with Technoserve. In our research, we are a long-term partner

with Mastercard Foundation’s RAF Learning Lab, CGAP, IDH, and Mercy Corps.

Program activities and highlights

Administrative/governance

On the team front, we are currently recruiting for a Manager with experience in investment banking,

commercial banking, and/or private equity to support the Cashew Catalyst Fund project that promotes

cashew processing in West Africa. (see full list of team members in the Appendix)

By the beginning of FY 2021, with a full team contingent in place (12 people), we will have no additional

hiring expectations, and our focus is on working together effectively and efficiently across geographies and

skillsets, particularly as we have moved to a fully remote work dynamic since March 2020 (see full list of

team members in the Appendix).

The rest of the program activities and highlights section is structured around ISF’s three impact pathways

as articulated in the Theory of Change and annual work plan: i) learning pathway, ii) new infrastructure

pathway, iii) intermediation and facilitation pathway. Each section includes a reminder of our goals for

2020, a brief description of recent activity in the quarter, and an update on performance indicators.

4 See appendix for more details on how ISF Advisors has managed the COVID-19 pandemic.

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1. Learning pathway

ISF’s research is the foundation of the organization’s work. ISF’s landmark report, Inflection Point,

continues to be a widely cited report with nearly 10,286 views to date. ISF’s research has underpinned key

resources in the rural finance space that have continued on past ISF’s involvement. Navigating Impact, the

Global Impact Investment Network’s project to help investors select impact strategies, uses ISF’s research

in its smallholder agriculture section. The Smallholder Finance Product Explorer (SFPE) product profiles,

hosted by Mastercard Foundation’s RAF Learning Lab, is originally based on ISF research that has been

expanded by RAF Learning Lab and the One Acre Fund. ISF’s research continues to inform the creation

of new rural finance initiatives, projects, and organizations.

Notably FY2020 saw the release of ISF’s new state of the sector report, “Pathways to Prosperity” during

Q4 of 2019. The third in a series of landmark reports into the state of the rural agricultural finance sector,

this research has an established following and practitioner group that is heavily bought into the three-year

stocktaking process that it facilitates.

ISF’s goals for 2020 were to:

Release the State of the Sector report, "Pathways to Prosperity", execute a communications

campaign, and organize a series of release events / speaking opportunities and follow-up articles

Complete and publish a briefing note on the "role of government in agriculture finance" based on

deep dives into three country case examples (Uganda, Turkey and Mexico)

Develop a new short Briefing Note perspective on “Platforms” with RAF Learning Lab

Develop smart subsidy and structured finance mapping to build on capital orientation map

framework

Scope and develop pathways deep dives around Climate and Nutrition

Continue to release the Pulse series with the Rural and Ag Finance Learning Lab, a blog series on

topical issues, covering recent research or transaction work

[addition in March 2020] Develop a series of six Briefing Notes with RAF Learning Lab on the

COVID-19 emergency and how challenges and solutions can be identified using the Pathways

framework

ISF performance on goals:

One of ISF’s key accomplishment this year is the release and communications campaign of the “Pathways

to Prosperity” report that ISF Advisors and RAF Learning Lab released in early November 2019. The State

of the Sector report built on ISF’s 2016 Inflection Point report, which continues to be a widely cited report.

Building on learnings from the 2016 release of Inflection Point, we structured dissemination around three

phases for this report: i) pre-release interest generation; ii) report release activities; and iii) amplification

activities. Having published three pre-release blogs and hosted a range of industry consultations in the first

phase of dissemination, the report release was structured around:

1. A social media campaign

2. Direct distribution through ISF, RAF and partner outlets

3. A key December launch convening in Nairobi attended by ~80 industry practitioners

4. Presentations at a range of industry convenings including AGRF, Microfinance week in Burkina

Faso, SAFIN, The World Congress on Agri-Finance in Delhi, SOCAP and the Agrifin Accelerate

annual learning event.

5. A continued social media dissemination campaign

6. The publication of two Pulse Blogs with a focus on youth and gender respectively

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7. Direct briefings with key funders including USAID, DFID, CDC, Global Affairs Canada, IDRC,

Gates Foundation, Small Foundation, and Argidius Foundation

The report release was also supported by an interactive microsite that facilitated more dynamic interaction

with key report findings and frameworks as well as deep dive research into Youth and Gender. Since the

release, we have seen the highest ever engagement with an ISF research piece which likely reflects the

growing following of the State of the Sector series, a more expansive and interactive dissemination

campaign and the quality of the research (in particular the pathways analysis). However, for the ISF team

it has been the specific instances where practitioners and funders have started to rethink their approaches

that have been the most encouraging, for example:

A number of practitioners assimilating the rural pathways model and new service delivery

characterization in the Nairobi Launch event

The European Union using the rural pathways model to structure its’ forward looking rural finance

investment strategy for the AgriFin initiative

CGAP and IDH using the rural pathways model to deepen and shape their forward looking research

agenda

Ceniarth mapping their investment portfolio using the rural pathways and service delivery model

frameworks to consider forward looking investment parameters

Acumen starting to think through their portfolio in terms of rural pathway alignment

DfID Nigeria using the report as a basis for rethinking a new 90 million GBP market development

program

Mastercard Foundation using the youth deep dive to inform their granting strategy and approach to

stimulating rural employment

Gates Foundation encouraging agriculture teams to orient program design around the pathways

model

Various social enterprises focused on agriculture finance who consider ISF’s research to be

essential reading for employees. For example, Busara wrote to us to say, “[Pathways to Prosperity]

is basically required reading, I make all our new hires read it if they want to get into the smallholder

agriculture space.”

Also in the first quarter of 2020, ISF finished and published a briefing note on the "Role of Government in

Agricultural Finance" based on deep dives in Uganda, Turkey and Mexico. The briefing note focuses on

how governments, donors and private sector financial service providers can build on past experience

through:

Having donors engage more strategically in markets, and with governments, to support more

sustainable participation of the private sector;

Deepening the quality of research available to governments regarding effectiveness and relevance

of specific actions, in order to develop policies and approaches at the macro, meso and micro levels;

Pioneering new ways that Government can work across levels and ministries on a shared agenda.

Building on the briefing note, ISF published a blog (How Governments Incentivize Private Sector

Involvement in Agricultural Finance) highlighting six key insights from the report.

Shortly after the outbreak of the COVID-19 pandemic, ISF decided to focus on drafting and publishing five

Pulse Blogs as part of the “COVID-19 Emergency Briefing” series. The series evaluates the effects and

possible response measures resulting from the novel coronavirus emergency. The blogs carried over the

pathways framework proposed by ISF in the new state of the sector report, “Pathways to Prosperity”

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released in November 2019. The first publication focused on applying the pathways model to the current

crisis resulting in the formulation of the “Cascading rural livelihood effects model: COVID-19”. By

integrating the Pathways Report into ISF’s COVID-19 response work, the ISF team expects to create a

structured framework stakeholders can then use to formulate response measures to this unprecedented

crisis. Building on the release of the series, ISF focused on strategically engaging different stakeholders to

influence their thinking around their responses to the COVID-19 crisis.

Seeking to expand beyond English-speaking media and communications, we wrote for El-País on the

opportunities for development finance and impact capital to mitigate the effects of COVID-19 on

agricultural markets “Tailor-Made Agricultural Investment, A Matter of Survival for Millions (Spanish).”

Late during Q3 2020, we kicked off our research piece on “Emergence of Platform Models in Agriculture.”

We believe this is a timely effort because there is an emerging appreciation of the potential of specific

“platform models,” however there is no holistic view of the differences between models that should be

driving the investment decisions of donors, investors and the providers themselves. This is creating

confusion and complexity within the sector with many practitioners. In partnership with the RAF Learning

Lab and with input from a number of collaborators including CGAP, IDH, Mercy Corps, and Caribou

Digital, we’re drawing on decades of research into platforms in developed countries to distill the current

state of platform development and define new opportunities for their further evolution. With our research

effort, we aim to:

1. Create a global landscape and fact base to connect siloed efforts and stimulate a new conversation

amongst practitioners;

2. Develop a new lexicon and understanding around the types of platforms and how they are

positioned in agricultural markets;

3. Identify opportunities for innovation and future investment to further support rural service

provision to smallholder households and agri SMEs.

Given our focus on the COVID response series, and now looking deeply at agriculture platforms, we have

decided to delay our research on smart subsidy and climate/nutrition for consideration in 2021. However,

we conducted several related pieces of research that were funded independently of our USAID grant.

1. In the first engagement, the Swiss Re Foundation commissioned ISF to look at “Strategies for

supporting sustainable and climate-smart advisory services,” with a particular focus on models that

are commercially viable;

2. In the second engagement, ISF worked with CGAP on drafting a research report on long term trends

in the food system and rural livelihoods and how these changes might impact the ag-finance space.

The analysis formed the basis for a series of structured conversations with leading donors in

agricultural finance;

3. Finally, ISF received a grant from the David and Lucile Packard Foundation to update ISF’s fund

database and draft a report identifying and profiling prominent funds working in the intersection

between tropical landscapes, agriculture and gender. Through the “Landscape Assessment of

Investment Funds Supporting Tropical Forest Areas and Communities” we assessed impact funds

focused on forest-dependent communities and smallholder farmers to identify best practices, gaps,

and opportunities for investment.

These research pieces are a key part of our strategy to share industry learnings with the broader sector, and

we often reference these materials throughout our project work. ISF has increased its emphasis on digital

media to increase its ability share our research with Meredith Husar who replaced Malia Bachesta as ISF’s

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Communications Lead. In that time, our Twitter followers have grown 27% averaging a reach of 2,400

users per month and our LinkedIn followers has grown 75% with an average of 254 profile views per month.

ISF team members continued to participate in and present at conferences and webinars (see Appendix for

more details), most of which have been held virtually since early March. Conferences serve a number of

benefits for ISF. These platforms allow us to share research and influence the sector at large by speaking

and participating in the conferences. Attending conferences allows us to stay informed on the latest trends

in the space. Networking at conferences is critical for keeping in touch with key stakeholders (e.g., the GIIN

conference allows us to stay in contact with key funders). Conferences also allow us to generate key

business development leads for new projects.

We also updated our Global Smallholder Farmer Investment Portal, which includes archetypes to

characterize different types of funds in smallholder finance, a fund database of 100+ funds in rural finance.

All of the research pieces mentioned above are available for public consumption on ISF’s website.

Indicator Annual performance / explanation (see Appendix for information on indicators)

Number of

organizations

using ISF insights

to guide activity

ISF’s distribution list includes over 2,000 contacts. Although we do not know the

total number of organizations using ISF insights, the following organizations have

explicitly mentioned to us that they have used ISF insights to shape their respective

agriculture strategy, investment, and/or programming:

1. Funders (22): USAID, MasterCard Foundation, Gates Foundation, FAO, DFID, CDC,

AFD, Proparco, Developing World Markets, Ceniarth, Calvert Foundation, Small

Foundation, Soros Economic Development Fund, IFAD, FactorE Ventures, Vested

World, Shell Foundation, Rockefeller Foundation, European Union AgriFin, Acumen,

Swiss Re Foundation, Packard Foundation

2. Financial Institutions (12): Rabobank, Root Capital, Oikocredit, Global Partnerships,

Opportunity International, MicroCred Senegal, LAFCo, El Buen Socio, TCX,

NatureVest, Proximity, Huruma Fund

3. Networks/NGOs (14): AGRA, CGAP, Grow Africa, Grow Asia, GAIN, Boulder

Institute of Microfinance, MIX Market, World Cocoa Foundation, Innovation Forum

UK, IDH Sustainable Trade, MEDA Innovate program, Niger Delta Partnership

Initiative, Smallholder Agriculture Finance and Investment Network (SAFIN), Mercy

Corps Agrifin Accelerate Program, TechnoServe, Global Impact Investing Network

(GIIN)

4. Agro-enterprises (10): Joseph Initiative, Eschaton, Esoko, Geotraceability, Biomass

Group, Apollo Agriculture, Haiti Impact Alliance, Tulaa, Blooom, Busara

Key Metrics from

ISF Briefing

Notes, Pulse

Series, COVID-

19 Emergency

briefings, ISF

website, and State

of the Sector

Reports

12,269 total views of ISF’s Briefing Notes

10,722 total views of all Pulse blogs posted since 2017

9,254 total views of the COVID-19 Emergency Briefs, with an average session

duration of 5m 31s.

428 users with an average session duration of 1m 34s of the ISF website

(average for the month of September 2020).

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State of the Sector Reports

10.286 views of “Inflection Point” (published April 2016)

1,655 downloads of “Pathways to Prosperity” (published November 2019)

5,486 users visited the Pathways to Prosperity microsite, with an average session

duration of 2min 48s

2. New infrastructure pathway

ISF supports the creation of institutions, partnerships, and initiatives that fill gaps in industry infrastructure.

ISF utilizes both its experience in facilitation and intermediation and research and knowledge to provide

facilitation support, advisory services, and forums for the donor community. Our team includes

management consultants from leading strategy firms and financial experts from investment banking and

impact investing backgrounds, which brings connections with a broad network of funders and service

providers in the rural finance space.

Initiatives in this pathway may include pre-competitive alliances or collaborations among actors in

particular industry verticals or within countries.

ISF’s goals for 2020 were to:

Engage USAID stakeholders in strategic feedback and learning on agriculture/rural finance (i.e.,

quarterly meetings with MSI team and alignment of ISF learning agenda with USAID learning

agenda)

Engage the "Meeting of the Minds" group to progress a sector learning agenda (ISF, RAF Lab,

IDH, and CGAP)

Take advisory positions on relevant advisory committees, working groups, and boards to shape the

strategy of organizations and networks in the sector (e.g., DFID CASA, Mercy Corps Agrifin

Accelerate)

Participate/speak at conferences and workshops (i.e., Mercy Corps AgriFin Accelerate, GIIN,

AFSIC, SOCAP, World Congress on Agriculture Finance, Farmfit forum, etc.)

ISF performance on goals:

A core strength of ISF’s platform is its donor/funder coordination. ISF provides a structured forum for this

community to share programmatic activity, interests, and research through our advisory work and

collaboration with other institutions. In our work, we bring partners and actors together to anchor our

understanding of the space.

During 2020, we substantially strengthened our relationships within USAID, and began a path towards

more regular structured communication. Notably, in December 2019 we hosted a USAID brown bag

presentation on the Pathways to Prosperity report, and we did a workplan review with the MPI team in

order to ensure alignment of ISF’s priorities. In January 2020, we did a review of the MPI agriculture

finance portfolio in order to give ISF’s feedback on initiatives supported by MPI. And we had a learning

agenda review with USAID’s Knowledge Management Specialist in order to agree how we can better align

ISF’s learning agenda and communications/dissemination plan. As the new agriculture finance team comes

onboard at USAID, we are looking forward to more coordination and engagement.

Since early 2019, we have hosted a “meeting of the minds” with CGAP, IDH, and RAF Learning Lab that

served as a basis for the direction of the State of the Sector research. Following the release of the Pathways

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report, the meeting of the minds group got together in Nairobi in order to review and harmonize our sector

learning agendas for the coming year. We learned that our partners are currently focused on the following

topics:

RAF Learning Lab focusing on client engagement deep dives and Service Delivery model work

including metrics expansion to include youth, gender and employment and expanding the

methodology to platform business models

IDH focusing on Farm Fit Fund development, service delivery model expansion (to 200 cases) and

a more strategic approach to building markets, including the enabling environment

CGAP focusing on super-platforms, digitization, gender and proving stronger livelihood links to

financial services

Mercy Corps focusing on climate smart ag, digitization, platforms and distilling program learnings

from past 5 years of investment

Our advisory work is a key part of our influence on the sector. ISF’s Directors currently advise various

organizations within this space. These advisory roles allow ISF to influence the creation of institutions,

partnerships, and initiatives that support the sector. Our advisory positions are also key to informing the

direction of our research and perspectives in our reports. In this year, we were active in the following

advisory relationships:

MEDA Innovate: The MEDA Innovate program focused on “non-traditional finance” for

agriculture. Dan was a member of the program’s advisory committee, and the program concluded

in March of this year with a final virtual workshop (the in-person workshop was reformatted due

to COVID-19). The program culminated in a publication with an interactive micro-site.

IFAD SAFIN (network of organizations interested in agriculture finance): ISF participated in the

annual SAFIN meeting and gave input/feedback on SAFIN priorities for the year. Dan provided

opening remarks and framing for a closed-doors SAFIN sponsored discussion around COVID-19

and agri-SMEs. He focused on the need to adapt existing funding structures to support liquidity of

farmers and agri-SMEs, and the likelihood of a transition in focus towards domestic food staples

as local governments support food security

UN Joint SDG Fund, Ag and Food Security Work Group: The UN Joint SDG Fund supports

countries as they accelerate their progress towards the Sustainable Development Goals. The Fund

solicited calls for proposals that will be awarded with grants to develop full-fledged programs that

leverage public and private finance. Dan is part of the Investor Advisory Group for the Ag and

Food Security Working Group, which provides advice to the teams transforming their proposals

into promising impact-driven pipelines.

GIIN Impact Performance Study in Agriculture (IRIS+): Dan and Ana served as advisors to

the GIIN in creating and defining IRIS+ metrics for agriculture.

DFID CASA Program (Commercial Agriculture for Smallholders and Agribusiness): Craig

and Matt participated in calls as part of our advisory role in the CASA program in order to give

input on program design and research agenda. Since April 2020 ISF is an associate partner of

CASA.

DFID and Gates Foundation Agriculture Finance Policy Partnership. Dan and Craig

participated in calls to give feedback on a new framework that DFID and Gates have been

preparing and resulted in a publication by FSG titled “Bending the Arc.”

Agrifin Accelerate: In recent months ISF has been supporting Mercy Corps on distilling learnings

around the use of data in agriculture and shaping the phase 3 design of the Agrifin Accelerate

program

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P17 program with Mutual Empathy: Since Q3 2019 ISF, has been advising Mutual Empathy, a

Colombian NGO, on the creation of a design funding facility for its P17 program aimed at

providing grant financing to organizations to design and pilot innovative sustainable finance

structures.

Indicator Annual performance / explanation (see Appendix for information on indicators)

Number of new

institutions,

partnerships, and

initiatives

established

1. Meeting of the Minds – ISF has been working over the past two years to develop a

more connected, industry-wide learning and research agenda involving the

following core organizations: ISF, RAF Learning Lab, CGAP, CSAF/Aceli, IDH,

Mercy Corps AgriFin Accelerate

Number of

advisory roles

ISF participates

in

This year, ISF served as an advisor to:

1. Mercy Corps AgriFin Accelerate program

2. MIX marketplace Advisory Board

3. DFID Commercial Agriculture for Smallholders and Agribusiness (CASA)

Programme Advisory Panel

4. DFID and Gates Foundation Agriculture Finance Policy Partnership (AFPP)

5. MEDA-Innovate project

6. CGAP Advisory Board Member

7. GAIN innovative finance opportunities

8. CSAF Advisory Member

9. SAFIN member

10. UN Joint SDG Fund

3. Intermediation and facilitation pathway

ISF’s primary role is to act as a “design catalyst” to mobilize financing to rural enterprises and replicate

innovative financing models. ISF works with public and private investors to develop new financial and

partnership structures that can drive capital to rural clients and transform their economies. This typically

includes a combination of strategy and partnership development while layering in financial inclusion and

investment structuring expertise. The organization’s projects in rural finance inform the research and, in

turn, the research informs the projects creating a self-reinforcing loop between the two areas. Note that

most of ISF’s intermediation and advisory work is partially or fully funded by clients. ISF typically uses

USAID funding either to shape very early stage concepts or to cross-subsidize efforts where there is

insufficient budget to achieve the task. USAID funding is used for initiatives where ISF research has

indicated there is a clear market gap and/or innovation opportunity related to agricultural finance.

ISF’s goals for 2020 were to:

Continue implementation of existing multi-year project engagements, specifically AINFP and

MOCCA

Pursue new intermediation and facilitation engagements as a design catalyst, including:

o new funds or investment facilities

o sell side capital raising for innovative social enterprises

o inclusive agriculture strategy or product design for financial intermediaries

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o inclusive corporate supply chain programs

ISF performance on goals:

ISF worked on 11 projects, which included 8 new models and structures developed and deployed, and 3

public-partnerships formed. Collectively these projects mobilized $26M in funding to support rural

enterprises and smallholder farmers in FY2020. Over the next 5-10 years, our current projects alone are

expected to mobilize an additional ~$850M.

ISF categorizes its projects in three categories: 1) innovative business transactions; 2) product or market

specific funds; 3) sector shaping initiatives. ISF has engaged in 11 projects across these three categories

this year (full list of projects can be found in the Appendix). Highlighted successes include:

1. Innovative business transactions: ISF is two years into our 5-year engagement on AINFP, an

alliance with TechnoServe and Partners for Food Solutions to provide assistance to food processors

in four countries. ISF is the lead access to finance facilitator and our dedicated access to finance

manager facilitates linkages to appropriate forms of investment for processors. Across the 4 AINFP

countries, ISF has identified 17 SMEs with financing needs and supported ~$2.8M of financing

transactions across 10 SMEs, with another 5 pending execution of ~$8.9M. We have identified 39

capital providers to develop relationships and explore financing opportunities for the SMEs and

executed 3 MOUs with capital providers in Kenya, and Ethiopia. This engagement will continue to

expand ISF’s relationships with SMEs and financial institutions in East Africa over the next three

years.5

2. Product or market specific funds: ISF completed our advisory work with GAIN’s Nutritious Foods

Financing Facility, a new investment vehicle to catalyze private sector financing to help scale up

locally produced nutritious foods. We concluded our work by helping GAIN onboard the fund

manager, Incofin. This work marks an expansion of ISF’s mandate as we move into adjacent and

interrelated spaces such as nutrition.

3. Sector shaping initiatives: ISF believes there is an opportunity to bring mainstream asset managers

into the agriculture space, especially those that have launched dedicated impact funds (e.g., TPG

Rise, Apollo, etc.) and have an interest in the sector. Over the course of the last year, ISF helped to

define a potential pipeline of innovative agricultural enterprises for one such asset manager. The

COVID-19 situation has meant this asset manager has retrenched to focus on current investees, but

we plan to pick this work up again as markets settle. This work is part of our broader mandate to

shape the sector and to bring new forms of capital in support of smallholder farming and sustainable

agriculture supply chains.

Other projects the ISF team worked on without using funding from this grant include:

Swiss Re Foundation: Assessing the landscape of advisory service delivery models for farmers

(particularly climate smart services).

Grow Asia: ISF conducted an engagement supporting IFAD in a project design effort to expand

the existing Grow Asia Digital Program with the objective to accelerate the adoption of digital tools

by smallholder farmers in ASEAN.

5 ISF has been sub-contracted by TechnoServe to lead the financial facilitation on the project. TechnoServe reports

our performance metrics in their consolidated report, and therefore we have not included the impact metrics from

this project in our indicators

19

CGAP: Supported CGAP on the creation of a series of documents that will serve to inform the

impact investment space around trends shaping smallholder and agriculture finance in the coming

decade.

Small Foundation: ISF advised the Small Foundation on strategies to manage or hedge foreign

exchange risk for the proposed Social Enterprise Fund for Agriculture in Africa.

Microinsurance Firm in Latin America: ISF is advising a secondary sale of shares for a

Microinsurance firm in Latin America. The current owner of the sales, a philanthropic organization

is seeking to donate all proceeds to strengthen the company’s expansion plan in the region.

Prosper Africa Cashew Program: ISF began an engagement with the Prosper Cashew program

to support the design of the Cashew Catalyst Fund, an investment fund focused on strengthening

businesses in the cashew value chain in West Africa.

Indicator Annual performance / explanation (see Appendix for information on indicators)

Number of new

models and

structures

developed and

deployed

ISF has facilitated the creation of 1 new models and structures.

Structures where funding from this grant has been partially used include:

1. GAIN’s Nutritious Food Financing Facility: ISF provided design and

development support for a new investment vehicle to catalyze private sector

financing to help scale locally produced nutritious foods.

ISF is working on a number of other leads (described above) for 2021.

Amount of

funding

(investment)

mobilized

through ISF

intermediation

activities

(FTF Indicator

EG 3.1-14)

Since its inception, ISF has mobilized over $200M in funding through the various

funds, mechanisms, and businesses it has advised on.

In FY2020, ISF helped raise US$11M for GAIN’s Nutritious Food Financing Facility.

The ABC Fund was the recipient of an additional $9M investment from IFAD (bringing

the total capital raised for the ABC fund to $68 million. We expect that our work with

GAIN, MOCCA, Prosper Cashew, SEFAA and others will result in new funding being

raised during the upcoming fiscal year.

Key accomplishments

Over the course of ISF’s work since 2013, we have catalyzed ~$215M in financing for rural agriculture

directly or indirectly. Over the next 5-10 years, ISF’s current projects alone are expected to catalyze an

additional $850M. The catalytic nature of our projects highlights the importance of our research in creating

change. Research is often the mechanism through which effective advisory engagements can be identified

and executed. The reverse also applies, as each project builds practical knowledge and feeds more public

research and better partnerships/infrastructure. The strategy has resonated with the market, as evidence by

ISF’s involvement in many of the most innovative financing solutions currently under development in the

rural finance space (e.g., IFAD’s ABC Fund, Aceli Africa, GAIN N3F, MOCCA, AINFP, and SEFAA).

Furthermore, ISF’s management team is regularly sought out for advice among new entrants and

experienced practitioners. ISF’s publications are widely cited and referenced by notable funders and

investors involved in rural finance.

20

We expect that ISF’s State of the Sector report (titled “Pathways to Prosperity”) will represent continued

thought leadership in the sector that will translate to catalytic capital with the aim of closing the $170B gap

in smallholder financing. ISF expects to publish additional reports related to our State of the Sector report

focused on nutrition and climate. These reports will allow ISF to provide further insights into nuances of

rural communities and support the design and development of specific initiatives in the sector.

Funds mobilized by ISF projects to date

Project

name

Description Funds raised ($) Funds expected ($)

Aceli

Africa

Aceli Africa seeks to address the

$65B financing gap for

agricultural SMEs in Africa

through a financing facility that

uses incentives to increase lending

from local financial institutions

and international lenders to SMEs.

$13M raised in FY2019

$10M from

USAID (USG)

$2.5M from a

number of other

organizations

(Private)

$50M additional

expected

$40M expected for

financial incentives and

$10M for agri-SME

technical assistance

GAIN

Nutritious

Financing

Facility

(N3F)

The N3F is a new investment

vehicle to catalyze private sector

financing to help scale locally

produced nutritious foods in

Kenya, Mozambique, Tanzania,

and Nigeria.

$11M raised in FY2020

$6M from

private sector

organizations

$5M from non-

USG sources

$60M additional

expected

IFAD Agri-

Business

Capital

(ABC)

Fund

ISF advised IFAD on the design

and development of a blended

public and private debt investment

fund focused on rural SMEs and

smallholder producer

organizations.

~$60M raised in FY2019

~$55M from EU

(45M EUR) and

Luxembourg

government (5M

EUR for TA)

(non USG and

not counted in

FTF indicator)

~$5M from

AGRA (Private)

$220M additional

expected

MOCCA ISF is working on MOCCA for 3

years to support the design and

structure of a long-term financing

solution for coffee and cacao

R&R.

$0 raised in FY2020

MOCCA is in the

investor mobilization

phase

$450M additional

expected

21

MOCCA team is in

discussions for a

potential $450M facility

Proximity

Designs

Proximity Designs is a leading

NGO in Myanmar that provides

finance, farm advisory services,

and technology solutions to

smallholder farmers.

$15M raised in equity in

FY2020 from Finnfund,

NMI and Proparco

$10M raised in long-

term debt raised in

FY2019

$8M from OPIC

$2M from Skoll

Foundation

-

Rockefeller

supply

chain

financing

solution

Rockefeller Foundation co-

developed a product with ISF to

address a key constraint in many

smallholder farmer supply chains.

Rabobank has developed the

product and tested appetite with

multiple corporate clients

$2M raised as fist-loss

guarantee from Rabo

Foundation and

Rockefeller Foundation

(Private) in FY2019

$20M additional

expected

Tropical

Landscapes

Financing

Facility

(TLFF)

ISF advised TFF in developing

pipeline, fundraising, and

designing a technical assistance

facility for the Indonesia TLFF

$95M sustainability

bond to finance

sustainable natural

rubber production

completed in FY2018

Tulaa Tulaa is a digital financial service

company working in Kenya,

Ghana, and Tanzania. ISF helped

Tulaa with the refinement of their

partnership model and market

positioning including with key

investors and donors.

~$630K raised in

FY2018

-

Social

Enterprise

Facility for

Agriculture

in Africa

(SEFAA)

SEFAA is a new investment

vehicle from KfW and Small

Foundation to support initiatives

that improve business ecosystems

that proliferate income

opportunities for those in extreme

poverty. ISF conducted initial

proof of concept assessments and

advised the vehicle’s foreign

exchange risk-management

strategy

The vehicle is its

intermediate design

stage.

TBD

22

Microinsur

ance

company

equity sale

ISF is advising a Latin American

Microinsurance company in the

secondary sale of equity, the

proceeds of which are going to be

donated as a grant to the company.

The engagement began

during the latter part of

FY2020.

$3M expected in

FY2021

Cashew

Catalyst

Fund

ISF is a technical advisor to the

structuring of the Cashew Catalyst

Fund, which aims to provide long-

term working capital for existing

cashew processors in West Africa,

supported by technical assistance.

The engagement began

during the latter part of

FY2020.

$45M expected by FY

2025

Total funds mobilized through ISF projects ~$215M raised to date

($26M in FY2020)

$850M expected in

future

($330M expected

FY2021)

Future directions

ISF will continue to act as a “design catalyst” for smallholder, SME, and rural enterprise financing in the

2020/2021 fiscal year. As per the goals and objectives outlined in ISF’s technical application, the team will

focus on the following:

Maintain a portfolio of at least 5 advisory engagements in partnerships or transactions in the

agricultural finance space, such as creating new intermediary vehicles, financing products, or

delivery mechanisms which are aimed at reducing poverty for the world’s poorest rural farmers

Release a bi-monthly briefing series or blog post sharing lessons learned from the transaction work,

or from original research

Place developed information assets (especially databases) with an industry data partner and

periodically hone the focus by seeking feedback from practitioners

Convene practitioner meetings or participate in/present at conferences to publicize successful

models

Track performance and measure impact of pilots

Notable expectations for the 2020/2021 fiscal year include professional development for our 11 team

members, a team-wide retreat in late 2021, and an exit from the Global Development Incubator (as

discussed in “Other topics and issues”).

More detail on the 2020/2021 activities for ISF can be found in the USAID-ISF Annual Work-plan 2020-

2021.

23

Appendices

Management and Administrative Issues

During FY2020, new branding marking requirements were approved by USAID and the ISF websites and

publications were updated accordingly.

As a response to the COVID-19 pandemic, the entirety of the ISF team has moved to a working from home

modality affecting our ability to partake in conferences as well as continue with relationship development.

We have therefore shifted our focus to phone calls to strengthen our network, while we continue to use

virtual platforms to participate in meetings and presentations with relevant stakeholders.

Other topics and issues

ISF is actively exploring an exit from the Global Development Incubator, process that has been delayed

due to the COVID-19 pandemic. We are exploring three possible exit scenarios: i) incorporating as a stand-

alone advisory firm with a strategy similar to our current trajectory, ii) joining/merging with an ISF

peer/competitor, particularly one that would bring complementary sector expertise in an area such as energy

or health, iii) merging into a larger platform that would position us to design and manage much larger

tenders from investors, bi-lateral and multi-lateral donors. This would likely be one of the USAID prime

sub-contractors (e.g., Palladium, DAI, Chemonics, ACDI/VOCA). ISF is in active conversations and

negotiations on this front.

Facilitation and Conferences

Despite a reduced volume of events due to COVID-19, the ISF team members continued to participate in

and present at virtual conferences. These platforms allow us to share research and influence the sector at

large by speaking and networking. Attending conferences allows us to stay informed on the latest trends in

the space. Networking at conferences is critical for keeping in touch with key stakeholders (e.g., the GIIN

conference allows us to stay in contact with key funders). Conferences also allow us to generate business

development leads and/or partners for new projects. In FY2020, ISF participated in the following:

October – GIIN Forum: Craig participated in the Global Impact Investing Forum in Amsterdam

where he connected with leading impact investors and DFIs to expand and refresh ISF’s network

among investors.

October – Global Food Forum: Dan attended the Wall Street Journal sponsored forum in order

to connect with global food and agricultural companies.

October – African Microfinance Week: Dan presented an overview of the Farmer Pathways

framework with a focus on climate adaptation and the role of financial institutions at the annual

gathering in Burkina Faso.

October – Swiss Impact Investing forum: Craig presented on a panel at an annual gathering of

European impact investors where he had a chance to share ISF insights on blended finance and

connect with various European investors

November – World Congress on Agriculture Finance: Matt presented an overview of the

Pathways to Prosperity report in New Delhi for this annual gathering of institutions working in

agricultural finance

December – World Bank panel on platforms: Dan presented on a World Bank panel webinar

discussion focused on agriculture platforms. It was quite clear from this event that there is very

little consensus on the term “platform”, which is why ISF is planning to do a publication to unpack

and frame the topic in the coming year.

24

December – Mercy Corps AgriFin Accelerate Learning Event: Dan participated on a panel

about blended finance for agriculture, and connected with leading digital and fintech providers at

the annual Mercy Corps event in Nairobi.

December – Pathways to Prosperity launch event: ISF hosted a launch event for East African

based practitioners and stakeholders on the back of the Mercy Corps event. Dan presented an

overview of the report and facilitated dynamic sessions to apply frameworks from the report with

participants.

January – OECD Conference on Private Finance for Sustainable Development: ISF's Senior

Advisor Craig Courtney and Manager Ana Raviña attended the conference in Paris, France and

used the event to broaden their professional network and reactivate working relationships. The

meetings crystallized in a number of follow up discussions with Canada Global Affairs, FAO,

IFC, CDC, UNDP, WFP, NORAD, Big Win Philanthropy, Trade and Development Bank and

Moore Foundation among other organizations.

Key take-aways: The sessions centered around the idea that we are at risk of not fulfilling the

2030 Agenda and that one of the major roadblocks to attaining the SDGs is mobilizing private

capital for developing and emerging economies, and that the investment that is being mobilized

must be aligned with low-carbon, climate-resilient objectives. The conference explored

challenges and lessons learnt about successful experiences of the use of private capital for a

sustainable future. It addressed the use of philanthropy in funding common goods, or providing

"smart subsidies". The private sector was well represented, including large corporations like Illy,

who helped frame some discussions around the role of public-private partnerships and the much

needed collaboration of different stakeholders in transformational projects. Finally, the

conference discussed some of the most recent innovations that have successfully mobilized

private capital (e.g., Grameen's social bonds in India and the SDG500 initiative)

January – Coalition for Private Investment in Conservation Semi-Annual Meeting: Dan

attended a meeting convening several key funders and organizations working in the conservation

finance space seeking opportunities to align SHF finance with landscape / conservation finance.

Key take-aways: CPIC has developed a blueprint for various conservation focused financing

opportunities and are looking to mobilize investors. Rockefeller Foundation and the GEF are

looking to commit funding into some of the structures.

February – Sankalp Summit: ISF's Senior Advisor Craig Courtney and Manager Ana Raviña

attended the Salkalp Summit in Nairobi, Kenya and used the event to broaden their professional

network and reactivate working relationships. They held more than 30 meetings with

organizations such as Tulaa, Nordic Impact Funds, Maj Invest, Novastar, Agribazaar, Open Value

Foundation, Pact, GAIN, AECF, Grofin, AATIF, and GBF. ISF's Pathways to Progress report

was showcased in the research wall throughout the event.

Key take-aways: The conference revolved around the social entrepreneurship sector in Sub-

Saharan Africa. Participants discussed the challenges of start-ups and entrepreneurs, and some of

the different journeys of investors and entrepreneurs across sectors (i.e. healthcare, agriculture,

education). Presenters shared innovative products and business models that have gained traction,

and common challenges of company managers that hindered company growth and strategy

execution.

March – MEDA Innovate NTF4Ag Online: Dan attended a fireside chat where he shared insights

on trends, drivers and challenges that exist for non-traditional financial providers in agriculture

finance.

Key take-aways: Dan focused on key themes of the Pathways to Prosperity report, notably the

importance of segmentation, the trend towards bundling of finance with other value added services,

25

and the ability to use digital technologies to address challenges of rural finance. Resources and

publications from the program are available on the program website.

April – USAID Food Security Finance Virtual Meeting: Dan, Tom and Juan Jose participated

in a virtual meeting convened by USAID on Food Security Finance. The ISF team contributed

insights and learnings from the Pathways to Prosperity report during the online breakout discussion

sessions.

Key take-aways: Participants discussed implications of COVID, including the need to take a

systems-level approach, be realistic about local markets and maintain flexibility, and have

conversations around policy changes that will allow quicker responses.

April – MIX Agri-SME Advisory Board: Tom, who sits in the advisory board, participated in a

discussion to evaluate MIX’s progress on their Agri-SME portal as well as their transition from an

independent organization to a business unit within the Center for Financial Inclusion at Accion.

April - Blended Finance Approaches to Promote Sustainable Landscapes and Reduce

Deforestation in Mexico: Elizabeth and Ana participated in an online co-creation workshop

attended by over 25 organizations that jointly worked to develop a shared understanding of

problems and challenges, revise precedents in the space and identify opportunities for

collaboration.

April – Gates Foundation Pathways to Prosperity: ISF held a virtual brownbag with over 40

members of the Gates Foundation to share the Pathways to Prosperity report. ISF then had a follow-

up conversation with the Gates foundation team to talk about platforms research, commercial

advisory, and the Role of Governments brief and possible opportunities for interventions.

May - Innovation Forum Future of Food: Dan participated in the Future of Food forum which

gathered over 200+ attendees from the food and beverage industry. A key theme of the Innovation

Forum is the need for more coordination across commodity silos, as companies tend to focus on

single commodities, but rural households are often dependent on multiple crops. Thus the need for

“landscape” approaches that involve private sector and public sector actors working together.

May – IRIS+: Dan and Ana participated in the small industry discussion (10-12 participants)

convened by the Global Impact Investment Initiative around impact performance in the agriculture

space. The session explored different contexts of impact investments and various considerations

when exploring outcomes, two critical components for understanding performance results. This

discussion built from IRIS+ impact performance system and contributed to the GIIN's ongoing

impact performance standards and evidence.

May – Making Digital Work for Agriculture: Dan joined a webinar hosted with the RAF

Learning and AgDevCo’s Smallholder Development Unit (SDU) where they presented a series of

step-by-step guidelines designed to cut through the ambiguity and uncertainty farmers are facing

when implementing technologies in their businesses during the COVID-19 pandemic.

September – SpainNAB: Camino al Impacto: Ana joined a virtual conference on Spain’s impact

investment space. This year’s SpainNAB conference focused on the nexus between public and

private capital with respect to the UN 2030 Agenda, as well as public-private financing and

contracting schemes.

October – Convergence State of Blended Finance: Dan and Ana attend the virtual yearly

presentation of Convergence’s State of Blended Finance report. This year's report provides an

updated analysis of the blended finance market, including blending approaches, sectors, regions

and investor trends.

November – Sankalp Global Summit: The 2020 Sankalp Global Summit is a 5-day event

comprised of more than 100 sessions around different thematic areas, including healthcare and

26

sanitation, agriculture, financial services, the future of work, climate and energy, or gender lens

investing. ISF designed a session around blended finance approaches to achieve joint social and

environmental impact. The session, moderated by ISF’s Ana Ravina, had speakers from Mirova,

IDH and 12Tree.

Team members

Dan Zook, Executive Director (New York City, USA)

• 14+ years of financial services and strategic consulting experience in Asia, Africa, Latin America,

and Middle East

• Experience managing complex stakeholder partnerships, supporting early stage development of

blended finance structures, and engaging on technical design of novel rural financing models

• Formerly at Dalberg, Booz&Co., Standard Chartered, and Plan International

• MBA from Cornell University and a BA from Princeton University

Craig Courtney, Senior Advisor (DC, USA)

• 25+ years of international corporate finance experience at ABN AMRO Rothschild and HSBC in

Asia and Europe

• Strategic leadership of development finance, including origination, incubation, and execution of

investment processes and structures using private and philanthropic capital to stimulate private

sector innovation

• Experience advising high level government officials, private sector leaders, and investment

professionals

• MBA from Cornell University and a BA in Economics from UC Davis

Tom Carroll, Senior Advisor and Founder (DC, USA)

• Manages the AgEnterprise portfolio for the Global Development Incubator, which supports multi-

stakeholder initiatives and social enterprises that focus on the development and application of

products and services for small agricultural enterprises, including finance, digital technology, and

education

• Previously a Partner at Dalberg where he founded and led the global agriculture practice

• MBA from Yale School of Management and a BA from the University of Notre Dame

Matt Shakhovskoy, Senior Advisor (Brisbane, Australia)

• 12+ years of experience in the areas of private equity and development advisory for a number of

leading organizations including Agis Investments, Dalberg, and Deloitte

• Involved in over 60 projects in 25 countries working with partners such as the Gates Foundation,

the World Bank, USAID, MTN, and the G8

• MSc in Sustainable Development from the University of London and BA from the University of

Queensland

Elizabeth Lara, Associate Director (New York City, USA)

• 12 years of principal investing, financial advisory, and development experience across emerging

markets

• Responsible for transaction development and deal execution at ISF

• Formerly at Wolfensohn Fund Management, Rhone Capital, International Finance Corporation's

Oil & Gas Division, Morgan Stanley Latin America Investment Banking Division

• MBA from Harvard Business School and a BA from New York University

William Saab, Senior Manager (Amsterdam, the Netherlands)

• 10 years of experience in management and strategy consulting experience in Europe, Middle East,

and Africa

27

• Experience in optimizing the sustainability business for supply chain players, as well as modeling

of farm- and program-level data, supporting private and public organizations, NGOs, multi-

stakeholder initiatives, and financial institutions

• Formerly at NewForesight leading the sustainable business model work, and Booz&Co strategy

consulting

• MA from Johns Hopkins SAIS and BA from Cambridge Univ.

Beatrice Kithinji, Manager (Nairobi, Kenya)

• 15 years in the Kenyan and East African banking sector with a wealth of experience in the financial

industry encompassing agribusiness investment analysis, credit analysis, risk monitoring, client

relationship management, environmental and social risk assessment, policy design and

implementation

• Manages a regional project for ISF around financial inclusion for SMEs in East Africa

• MBA from Kenyatta University and a BA in Business and Economics from Kenyatta University

Ana Raviña Eirín, Manager (Madrid, Spain)

• 6+ years of financial advisory, debt capital markets and principal investing experience

• Formerly at the high yield desk of the Canada Pension Plan Investment Board and at Morgan

Stanley Investment Banking Division

• Responsible for designing and structuring innovative development finance solutions, including

financial, market, and legal analyses

• MPA in Development from Columbia University, MSc in International Finance from HEC Paris,

BA in Management from ESADE Business School

Sommers Kline, Associate (New York City, USA)

• 4+ years of strategy consulting experience in East Africa, Australia, and the U.S

• Formerly consultant at L.E.K. Consulting, a strategy consulting firm, as well as the Acumen Fund

and TechnoServe

• Responsible for analyzing and designing products and services that can expand the reach of

financing for rural enterprises and smallholder farmers

• BA in Environmental Justice from Vanderbilt University

Juan José Guzmán, Analyst (New York City, USA)

• 2+ years of sustainability and financial consulting experience in Colombia and the U.S.

• Formerly consultant at Transforma, a sustainability think-tank based in Colombia, as well as

Violy&Co. and the Earth Institute

• Responsible for conducting research, as well as analyzing and designing products and services that

can expand the reach of financing for rural stakeholders

• BA in Economics and Sustainable Development from Columbia University

Meredith Husar, Digital Media Associate (DC, USA)

• 1+ years of digital media experience

• Formerly a Production Assistant and Production Associate at Georgetown Post, a post-production

company that specializes in political media

• Responsible for digital media strategy for GDI, which hosts ISF; Meredith works part-time as a

digital media associate for ISF and RAF Learning Lab

• BA in Journalism and Politics at Ithaca College

Project list

28

Alliance for Inclusive and Nutritious Food Processing (AINFP) Status: Ongoing

Description: The Alliance (which includes Partners in Food Solutions and TechnoServe) will provide

customized assistance to food processors in four countries, increasing the volume supplied by smallholders,

doubling the processors’ sale of therapeutic and complementary foods to vulnerable populations, and doubling

the number of assisted processors able to attract finance. ISF, as the lead access to finance partner, will assess

existing local and regional lending institutions and risk-reduction mechanisms to strengthen the financial

ecosystem supporting small and growing processors in the focus countries. Where local services are not available

or sufficient, ISF's dedicated Access to Finance Manager will facilitate the creation of platforms made up of

multilateral, commercial and private banks, and investors to provide equity and debt to business in the PFS

portfolio and beyond. Meanwhile, TechnoServe will provide business development services, including market

linkages and sourcing strategy that is inclusive of smallholder farmers. PFS will provide food technology support

through their network of volunteer technical food experts.

Results/impact: Across the 4 AINFP countries, ISF has identified 16 SMEs with financing needs and supported

~$3.2M of financing transactions across 7 SMEs, with another 6 pending execution of ~$4.5M. We have

identified >30 capital providers to develop relationships and explore financing opportunities for the SMEs and

executed 2 MOUs with capital providers in Kenya, and Tanzania.

Insights: A key lesson in the AINFP project has been the value of embedding a banking expert within a technical

assistance project in order to assess financing needs and build relationships with financial institutions. In this

case, Beatrice, our Access to Finance Manager, brings a commercial banking lens from her experience as an

agricultural debt banker in East Africa that is critical. Not only does she improve the ability of AINFP pipeline

companies to access financing, but through her banking relationships, she has identified economically viable

agro-processors that have been referred into the project in order to improve their inclusive business practices with

support from TechnoServe and Partners in Food Solutions.

Social Enterprise Facility for Agriculture in Africa Status: Completed

Description: Small Foundation and KfW are developing a Social Enterprise Facility for Agriculture in Africa

(SEFAA) to support initiatives that improve business ecosystems that proliferate income opportunities for those

in extreme poverty. After completing an initial feasibility testing, ISF began developing a catalog of currency

risk mitigation strategies available for SEFAA.

Results/impact: ISF analysis will inform the design of the local currency management strategy for SEFAA.

Insights: From ISF’s analysis, we identified the main players offering foreign currency risk management

products in selected SEFAA countries, and devised a decision tree SEFAA will be able to utilize when

determining the management strategy that will best fit the requirements of the fund’s objective as well as investee

constraints.

ISF used a portion of the USAID core grant to cross-subsidize the total cost of this work.

GAIN Nutritious Foods Financing Facility (CONFIDENTIAL) Status: Completed

Description: ISF is providing design and development support for GAIN's Nutritious Foods Financing Facility,

a new investment vehicle to catalyze private sector financing to help scale up locally produced nutritious foods

in four countries in sub-Saharan Africa (Kenya, Mozambique, Tanzania, Nigeria). ISF's role includes: i) drafting

an investor-ready concept note, including governance structures, ii) drafting a fund manager RFP and selection

criteria, iii) supporting fundraising strategy and funder negotiation.

Results/impact: GAIN has received a commitment from a private foundation for a portion of the initial capital

on both the investment fund and technical assistance facility. With ISF’s support GAIN selected and onboarded

a fund manager (Incofin)

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Insights: As an NGO that is neither the investor nor the fund manager, it is tricky to maintain influence over a

new thematic fund. But the investment pipeline and programmatic work of an NGO can be valuable to an

investment fund because it de-risks the portfolio. ISF has helped GAIN maintain a seat at the table while

simultaneously supporting a fund management tender and fundraising effort.

ISF used a portion of the USAID core grant to cross-subsidize the total cost of this work.

MOCCA Status: Ongoing

Description: ISF is part of a 5-year USDA-funded initiative to support coffee and cacao tree renovation and

rehabilitation (“R&R”) in six countries in Central America and the Andean region. During the first 3-years, ISF’s

tasks will include: i) Researching current landscape of smallholder access to long-term financing solutions for

R&R across the two crops and six countries; ii) Design and structuring of long-term financing solutions for R&R

efforts; iii) Mobilizing stakeholders along selected long-term financing solutions to execute funding structure(s);

and iv) Assistance with implementation of long-term financing designed and post-close support

Results/impacts: The MOCCA project has identified and is actively pursuing two financial solutions. The first

involves working alongside TechnoServe and the Government of El Salvador to issue a green bond seeking to

refinance the coffee sector’s debt in the country. The second involves supporting the creation of ITRECAFE, a

regional coffee and cacao fund led by Banco Lafise and the Central American Bank for Economic Integration.

Insights: A significant obstacle to structuring R&R programs in the region has been the limited technical

capacities of local financial institutions in understanding and structuring credit products for smallholder farmers.

Packard Foundation Tropical Landscapes Fund Database Status: Completed

Description: ISF received a grant from the Packard Foundation to develop a report and database to provide

insight into the landscape of investment vehicles that support forest-dependent communities and smallholder

farmers in tropical forest areas. The report presents findings from the landscape analysis, dissects emerging trends

and identifies gaps and opportunities in this space.

Results/impacts: ISF identified 26 funds in tropical forest areas that benefit smallholder farmers and forest-

dependent communities. These funds represent $2.6B in capital and focus on investees generating revenue from

forestry and agriculture products

Insights: Fund managers are able to mobilize capital and have increasing sophistication around this space, as

reflected in the myriad of unique investment strategies, but still face challenges to scale and impact. Only a small

set of funds are able to balance conservation and livelihood impacts effectively. A key challenge expressed by

fund managers is the slim pipeline of investable projects and lack of consensus around best practices for pipeline

development.

SwissRe Foundation Advisory Services Report Status: Completed

Description: The SwissRe Foundation commissioned ISF to analyze the advisory services (AS) for smallholder

farmers space, with a particular focus on climate-smart agriculture (CSA) and sustainable AS models.

Results/impacts: ISF developed a report later jointly published with the SwissRe Foundation highlighting the

main trends, players and an overview of the advisory services market.

Insights: Farmers cultivating export-oriented cash crops are most likely to be served by integrated models

provided by offtakers and/or input providers, and AS is typically provided to farmers for free or heavily cross

subsidized. Large funders/donors (e.g., BMGF, World Bank) are active in contributing to public goods that

benefit this space, but efforts are fragmented.

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CGAP Status: Completed

Description: CGAP commissioned ISF to develop a report seeking to have a clear and structured understanding

of trends that will likely shape the smallholder finance space over the next decade. This report was planned to

serve as a guiding document for CGAP’s May convening in Copenhagen, however following the outbreak of the

COVID-19 pandemic, CGAP decided the report would remain as an analysis document that would guide smaller

internal discussions.

Results/impacts: We synthesized the findings and insights from the research above in a synthesis paper and a

short Powerpoint presentation. We then explored how to integrate aspects of the work into the Pathway

progression model in collaboration with the RAF Learning Lab and Dalberg Design. We held donor discussions

to uncover individuals with higher levels of interest and receptivity to the ideas in this work for continued

engagement beyond this project in the “conversations that need to be had” and we helped facilitate a public

webinar on rural livelihoods in a changing food system.

Insights: We identified the opportunity for organizations to get more sophisticated about thinking about ¨trends¨

through the strategic foresight body of work. We concluded that thinking more broadly about the future of

smallholder livelihoods inevitably leads to discussions about the future of food systems and how they might

evolve (e.g., the quality vs. price vs. availability tradeoffs, the role of government, or the tension between public

and private sector). Finally, we identified a number of underlying tensions in the food system were particularly

relevant to rural livelihoods (e.g., the tension between near-term responses vs. longer-term planning and visions,

the donor funding system and cycle, the "sacred" position of smallholder farming, or outcome and expertise silos

that do not support integrated programming about rural beneficiaries).

IFC/Unique CSA Status: Ongoing

Description: ISF partnered with Unique consulting to identify and assess financing opportunities for climate

smart agriculture in Ethiopia, Ghana, and Rwanda for the IFC. As the lead access to finance partner, ISF

interviewed financial instituions in order to understand appetite and barriers to climate smart investments. ISF

contributed recommendations to the final report on the size and nature of IFC investment options.

Results/impacts: The project is still ongoing

Insights: In many cases, climate smart agriculture practices are not so different from agricultural best practices.

ISF has made recommendations on investment opportunities that include asset financing, supply chain financing,

and working capital for climate smart practices.

Grow Asia Status: Completed

Description: Grow Asia and IFAD engaged ISF to identify and evaluate design components to expand the Grow

Asia Digital Program with the objective to accelerate the adoption of digital tools by smallholder farmers in

ASEAN, seeing farmers achieve higher productivity and incomes. Through a process of desk research,

stakeholder consultations, and engagement with Grow Asia and IFAD, ISF prepared a preliminary design for the

new three year Grow Asia Digital Program, a multi-stakeholder partnership platform for farmers, governments,

the private sector and NGOs.

Results/impacts: IFAD and Grow Asia agreed on a new three year digital program.

Insights: Many digital solutions are working on a “tech-first” basis and then struggling to adapt to service

requirements of farmers (particularly those in looser value chains). While governments recognize the potential

of digital ag solutions, direct action is limited and many lack the expertise and experience of working with the

private sector. The many emerging programs lack an overarching programmatic structure or strategy

IDH Archetypes Status: Ongoing

Description: ISF advised IDH's FarmFit program on the development of archetypes at an ecosystem level and

financing model archetypes that help inform the strategy and decision-making of Farmfit overall. These

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archetypes provide a way of clustering/segmenting service delivery models along a set of common characteristics

on specific dimensions.

Results/impacts: Still ongoing

Insights: Pending