A N A LY S I S
Unleashing the full potential of technical assistance Marnix Mulder, Director of market development, Triple Jump
Broadening the technical assistance (TA) toolkit creates a unique and impactful opportunity to help accelerate achievement of the Sustainable Development Goals (SDGs). The value creation potential of technical assistance can be unleashed by taking a systemic approach to market development, investing in talent and result management. and - particularly – in sector collaboration and joint learning.
AN ARTICLE BY MARNIX MULDER Marnix Mulder is an expert on financially inclusive market development strategies with 20-plus years of experience in development finance and advisory in frontier markets. Responsible for developing and implementing Triple Jump's market development program, he has incubated numerous innovative finance initiatives and built financial service providers' capacities and ecosystems.
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nlocking the potential transformative power of entrepreneurship is a crucial strategy to help achieve the SDGs in developing countries. Impact investing, in turn, seems best positioned to fuel that transformation. Impact investing's promotors – like the Global Impact Investing Network (GIIN) – dream of a world where impact considerations are ingrained in the financial sector. They promote more attractive products for investors, standardization and transparency, to enable the impact investing market to be scaled up1. One critical factor is often overlooked: we need impactful and inclusive markets with investable projects to invest in. If there is no absorption capacity for impact investment
capital, it will easily lead to overheating and impact washing. Impact investing has gained in popularity and is growing steadily2. The asset base underpinning impact investing is still relatively thin in emerging markets and very much skewed towards sectors like financial services (29%), energy (23%) and microfinance (12%). It has taken more than 30 years and a significant number of subsidies to bring the microfinance sector to its current level of maturity3. We do not have another 30 years to develop other impact investment markets, like mini-grids, access to water, sanitation and biodiversity. So, how can we gear the value creating power of technical assistance to accelerate the scaling up of new impact investment markets?
TECHNICAL ASSISTANCE 3.0 To grasp the value creating power of technical assistance for developing and scaling new impact investment markets, it is important to have an understanding of recent developments in the use of technical assistance in the impact investment sector. The technical assistance offering has changed considerably over time.
Back in 2006, Triple Jump was one of the few private impact investment managers that offered technical assistance to its investees. Today, most reputable impact investment managers have one or more TA programs completing their financial offer.
1 E.g. 2018 GIIN Roadmap for the Future of Impact Investing: Reshaping Financial Markets. 2 E.g. 2020 GIIN 2020 Annual Impact Investor Survey. 3 2011, Cheng (editor) The impact investor’s handbook: lessons from the World of Microfinance, CAF Venturesome: Market Insight Series.
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