Impact report “Promoting social entrepreneurship in Latin America

IMPACT REPORT

PROMOTING SOCIAL ENTREPRENEURSHIP IN LATIN AMERICA 2014 - 2018 PHASE 1

* Photo credit for cover photo : Balloon Latam

CONTENT 04

Introduction Who is behind this program?

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Objectives & Structure Opportunity, Sustainability and Global Impact

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Key results What did the program achieve in Phase 1 (2014-2018)

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Publications

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Examples Social entrepreneurs supported by the program

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What now

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

INTRODUCTION

Social entrepreneurship borrows from the principles of business and the social sector to design new and more sustainable solutions to societal problems. Famous social entrepreneurs such as Nobel Peace Prize winner Mohammed Yunus or David Green, who made healthcare accessible to the poorest, have also contributed to increasing people’s attention on the power and potential of social entrepreneurship. While many social entrepreneurs’ organizations operate like non-profits, others use market-based models, proving that a social problem can be addressed with a for-profit solution.

Despite its growing popularity, social entrepreneurship is not yet as widespread as it could be. It lacks appropriate infrastructure and ecosystems to develop to its full potential. Social entrepreneurs face many challenges, and few become successful at a large scale.

To support the uptake of social entrepreneurship, a group of leading organizations came together to accelerate the emergence and growth of social enterprises across Latin America. These efforts take place under the umbrella of the “Promoting Social Entrepreneurship in Latin America” program. The program is distinctive in the sense that it provides social entrepreneurs with targeted support at every stage of their development, including grant funding to help them focus full time on their project, capacity building to become investment ready and achieve systemic impact, and support with research and information-sharing activities. The Phase I of the program was implemented from 2014 until 2018 across Central and Latin America, with the exception of Brazil.

Promoting social entrepreneurship in Latin America

IMPACT REPORT

Who is behind this program?

A group of complementary leading organizations joined efforts to deliver the “Promoting Social Entrepreneurship in Latin America” program.

ASHOKA The largest global network of system-changing social entrepreneurs. Coined the term “social entrepreneur” in the 1980s and led the growth of this new sector.

HYSTRA Consulting firm specialized in inclusive business. It supports corporations, social businesses and social investors in designing sustainable and scalable strategies for the Base of the Pyramid.

Hystra closely partnered with another consultancy – LeFil Consulting – to deliver the program.

NEW VENTURES Group of organizations offering financing, acceleration and promotion services to social and environmental entrepreneurs.

SWISS AGENCY FOR DEVELOPMENT AND COOPERATION (SDC) Agency for international cooperation of the Federal Department of Foreign Affairs of Switzerland. Responsible for the overall coordination with other federal authorities of development and cooperation with Eastern Europe as well as for humanitarian aid delivered by the Swiss Confederation.

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

OBJECTIVES & STRUCTURE

Promoting Social Entrepreneurship in Latin America The “Promoting Social Entrepreneurship in Latin America” program aimed to reduce poverty and contribute to greater economic inclusion of vulnerable groups through social entrepreneurship. Vulnerable populations are supported as: Clients and users of products and services that improved their lives; Producers, who sell goods and services for a livelihood; and Employees, who have facilitated access to remunerated jobs.

The program supported social entrepreneurs at every stage of their growth, through five complementary pillars: 1. Opportunity studies: Identification of the best innovations and business models worldwide in

specific sectors; Analysis of potential measures to accelerate growth and replication to other geographies.

2. Launch of early-stage entrepreneurs: Identification, election and start-up support to 17 new

social entrepreneurs as Ashoka Fellows. Ashoka Fellows display creativity, entrepreneurial mindset, ethical fiber, innovation and strong impact. A key element of their support is a three-year stipend to help sustain the founder’s work as the organization grows.

3. Scale-up and sustainability: Acceleration program with investment readiness support for 43

established social entrepreneurs. The accelerator program includes business advising and access to investors to whom entrepreneurs pitched their work.

Promoting social entrepreneurship in Latin America

IMPACT REPORT

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4. Replication and global impact: Support of 23 social entrepreneurs and their systems change

strategy through the Ashoka Globalizer program. The social entrepreneurs participating in the program were encouraged to reflect on the strategies and the leadership skills they need to scale their innovation and deepen their social impact more efficiently.

5.Knowledge dissemination: Dissemination of knowledge and insights through events and exchanges in Switzerland and Latin America.

Launch of first activities

Success and development scale and Sustainability

Replication and Global impact

Social impact

Mio beneficiaries

Opportunity identification

Potencial impact not yet achieved

Starting entrepreneur

Duration: 5-10 years

Mature entrepreneur

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

KEY RESULTS

What did the program achieve in Phase I 2014-2018 ?

Between 2014 and 2018, the “Promoting Social Entrepreneurship in Latin America� program supported 73 social entrepreneurs from 20 countries across 16 sectors. In turn, these entrepreneurs: Reached +790 000 additional direct beneficiaries and 2.7 million additional indirect beneficiaries.

Created 29.6 million USD in additional income and savings for low-income households.

Raised 53.1 million USD in additional capital for their ventures.

In addition, the program demonstrated high-cost effectiveness.

The total budget of 6.2 million CHF generated almost 5x additional income/savings for low-income households and over 8x additional capital for social entrepreneurs.

Some of them were supported through more than one pillar.

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

Average Financial Sustainability of Social Entrepreneurs 2,61 *Based on a ďŹ nancial sustainability scale from 0 to 4, where:

2,55

2,25

0: Running an operational loss not due to expansion 1: Running an operational loss while expanding 2: Operationally sustainable but not covering overheads 3: Profitable but some grants for non vital operations 4: Fully profitable, no grants 5: Market rate returns, commercially investable

1,66

2013

1,93

2014

2015

2016

2017

Average capacity* of Social Entrepreneurs to create System-change 2,20 1,58

2013

2,42

2,68

0: Not looking to change the ecosystem 1: Actor but no active efforts to change a system 2: Clear objective to create a system change but no achievement yet 3: Clear pathway to provoke system change, with milestones already achieved 4: System(s) is (are) changed

1,82

2014

*Based on a system-change capacity scale from 0 to 5, where:

2015

2016

2017

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

PUBLICATIONS The program was essential in gathering and disseminating insights from the work of dozens of social entrepreneurs, through the publication of two reports.

Smallholder farmers and business This report shows how pioneer companies and organizations have sustainably increased the income and livelihoods of millions of smallholders farmers around the world, by sourcing produce from them or selling products to them.

Reaching scale in access to energy The energy access landscape has been moving rapidly in the past few years: new technologies, emerging leaders, Pay-as-you-Go, momentum for renewables, etc. This report provides new insights on opportunities to scale these innovations

Promoting social entrepreneurship in Latin America

EXAMPLES

Social Entrpreneurs supported by the program

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

DANIEL BUCHBINDER ALTERNA

Sector: Economic development Country: Guatemala

How did the program help him?

“The project provided deep reaffirmation of Alterna´s inclusion approach and where it is going. This support was very important because it challenged current paradigms and amplified our horizon in gender equity.”

Alterna is democratizing the support given to entrepreneurs in Central America by offering a unique program that reaches every entrepreneur that wants to refine or advance a business model, wherever they are, henceforth catalyzing local (social) innovation and economic development. Alterna’s work breaks down the structural barriers that prevent entrepreneurs to flourish in diverse contexts. Daniel Buchbinder wants to demonstrate that any entrepreneur is worth their ‘social’ impact and that they can inspire and uplift their communities.

So far, Alterna has supported over 1 500 entrepreneurs and small and medium size enterprises (SMEs), 80% of which grow thanks to Alterna’s support.

After taking part in a gender mainstreaming training offered by the program, Alterna is now implementing new initiatives to promote female entrepreneurs. For instance, they are setting up a pitch program specifically designed to better prepare women for the challenges they face when seeking investment, such as a lack of self-confidence or questioning bias for funding.

Over the years, the company has brought events to Guatemala that have promoted social entrepreneurship and attracted investment to the country. Alterna is now operating its own fund focusing on supporting early-stage entrepreneurs and on creating a stronger early-stage ecosystem in Guatemala. Alterna is growing across Central America.

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GUILLERMO PEPE MAMOTEST Sector: Health Country: Argentina

Mamotest provides high-quality breast cancer detection for women who have not had access to these services due to their costs or lack of availability locally. Today, 170 000 low income women have undergone diagnostics from Mamotest. In 9 of 10 cases, the early diagnosis of cancer means a life saved. The overall benefits that Mamotest generate for society are very high, estimated at 1 million USD savings generated per Mamotest clinic.

Guillermo Pepe was asked by the government of Argentina to develop an action plan to eradicate breast cancer mortality by 2020. He also leads a national coalition gathering all organizations working on breast and cervical cancers. He has fostered reforms in Argentina and Mexico for all government entities to grant a day to women employees so that they can be examined for breast cancer. Mamotest won the Samsung Innova 2017 award in the social impact category and, in 2016, was elected by the Interamerican Development Bank (IDB) as one of the seven projects with the biggest impact in Latin America.

Currently, Guillermo is working on a platform to increase access to mammograms for other providers.

How did the program help him?

“Though it's difficult to measure exactly, I would assign at least 70% of what we have achieved to our Globalizer process, as it helped us determine the need for systemic change and define precise processes and objectives”.

Additionally, thanks to a study performed by LeFil Consulting, Guillermo changed Mamotest’s model and elaborated a franchise strategy.

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Promoting social entrepreneurship in Latin America

ANDRÉS ALBÁN PUNTORED

Sector: Financial inclusion Country: Colombia

How did the program help him?

“The program made us see more clearly the social impact of our company, and the importance of our shared value model. It enabled us to think big.”

Puntored helps small shopkeepers grow their revenues by diversifying payment methods, in particular for the unbanked population of the country. Puntored installs technology in small stores, which allows the local population (90% of which is low-income) to then purchase products online (e.g. cellphone top-ups), pay bills, order services, receive government benefits, or even access their payroll. Puntored currently connects more than 72 000 shops and operates in over 90% of the country's municipalities, attending to the financial transaction needs of 7 million people every month and covering 300 million transactions a year. Puntored has been growing steadily as an organization, from 79 staff in 2012 to 240 in 2017, and broke even in 2013.

In Colombia, Andrés Albán is a leader in creating a new industrial cluster around ‘transaction services’. His goal is to transition to a cashless economy in a country where 96% of payments are by cash. He founded the Colombian Fintech Association where he works with 50-60 companies and NGOs to lobby the government for more financial inclusion. Puntored is currently scaling up a new device which is cheaper and helps shop owners to better organize their businesses by having access to data, such as number of customers and level of payments received.

Promoting social entrepreneurship in Latin America

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PETER BLOOM RHIZOMATICA

Sector: Information and communication technology Country: Mexico Rhizomatica is democratizing access to communication technology by using a government-owned mobile phone frequency to guarantee communication rights in isolated communities.

Peter Bloom utilizes an innovative technology and approach that is low cost, foments local economic development, and is regulated by the communities themselves. Peter is thus spearheading a movement for rural communities to own their own telecom services, within the limits of the law, in a sustainable way. In 2016, he succeeded in getting the regional American body of the International Telecommunication Union to pass a resolution emphasizing communication inclusiveness, which now can be used to talk to regulators in other countries.

Through Rhizomatica, 60 communities now have access to community-based telephony services, representing approximately 3 250 network users every day. These services generate annual savings of 54 000 USD for the local villagers, as well as additional business opportunities for local entrepreneurs. And there are many more benefits: network users, especially the elderly, feel more secure in case of emergencies because they can notify the authorities and communicate with each other more quickly; and local authorities can reach isolated populations as part of their health campaigns or give notices to beneficiaries of social programs.

How did the program help him? “Being an Ashoka Fellow helped me in three different ways. First, it gave me an income in the early stages of the project to continue and consolidate it. Second, Ashoka put me in touch with interesting people and partners.

Third, the Ashoka label raised my profile (and my project too!) both domestically and abroad.�

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

ITZEL SUĂ REZ GRUPO MURLOTA

Sector: Economic development Country: Mexico

How did the program help her?

Itzel reviewed her strategy with the support from LeFil Consulting and will shift her business strategy to further increase profitability through the sale of organic eggs to B2B customers. This will allow her to make her henhouses even more affordable and available in remote communities She was also selected as an Ashoka Fellow and granted a stipend to support her financially.

Grupo Murlota is helping rural households improve their diet and generate additional income through the production and sale of eggs. Itzel Suårez empowers housewives, senior citizens, people with disabilities, as well as any household or community group by providing low-cost henhouses of various sizes, along with all the required support needed to rear the animals successfully. Egg production empowers these individuals as micro-entrepreneurs and generates an additional 770 USD in income for them annually. While most subsistence farming programs focus only on producing enough for family survival, Itzel supports producers at every step of the supply chain, from production to marketing. Grupo Murlota is also actively trading the eggs produced in the communities. This drastically increases farmers’ yields and their ability to sell their surpluses to markets more broadly through a cooperative model.

While Itzel has thus far focused on small-sized production units (35 hens, a small chicken coop and fence delivered), she is starting to sell larger-scale farms (1 000 hens), thus expecting higher revenues and capital. In parallel, Itzel is talking to the Mexican government to legally distinguish pasture-raised eggs from free-range ones, and a bill is expected in the legislature in 2018.

Promoting social entrepreneurship in Latin America

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SEBASTIÁN SALINAS BALLOON

Sector: Economic development Countries: Chile, Mexico With Balloon, Sebastián Salinas is supporting agents of change among youth, businesses, rural communities and the public sector. Balloon helps develop local entrepreneurs and communities by bringing volunteers and experts from a wide range of horizons together, fostering transformative experiences for all involved.

A year after the program, 71% of the entrepreneurs supported manage to raise money (from private or public sources), 32% increase their revenues by around 30%, and 80% of them are still involved in a social activity. 80% of entrepreneurs supported by Balloon are women. During the duration of the program, Sebastián significantly strengthened Balloon’s impact measurement capacity. After a one-year training, he established a dedicated team and revised the methodology. Balloon recently expanded to two new Mexican locations, which resulted in a strong increase in number of supported local entrepreneurs, from 613 in 2016 to 2 500 in 2018. Balloon also consolidated its presence in Chile by setting up permanent local offices in four regions and is planning to expand to Colombia and Guatemala.

How did the program help him?

“Thanks to Globalizer, we completely revamped the model of Balloon, giving us much more focus on what we do and managing to scale our impact more than the organization. It also was essential to us Balloon winning its biggest contract in Mexico to date.

Thanks to the fellowship, I am now working full time on Balloon Latam. Also, having Ashoka’s seal of approval really helped gain investors’ trust.”

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

PHILIP WILSON ECOFILTRO

Sector: Water & Sanitation Country: Guatemala

How did the program help him? “20% of our rural sales could be attributed to the work with Hystra. They helped us rethink our sales strategy.� Ecofiltro now goes to fewer schools (but higher penetration per area), and only gives the filters for free to schools if a minimum number of parents are ready to buy their own.

Thanks to the support of New Ventures’ i3 acceleration program, Ecofiltro also raised 400 000 USD capital.

Ecofiltro commercializes and distributes water purifiers that eliminates bacteria and parasites from contaminated sources. It is the most culturally accepted and low-cost alternative in rural Guatemala. Philip Wilson operates along a cross-subsidy model that targets two different markets: 1) low-income families in rural areas whose main water source comes from rivers and wells; and 2) families in urban areas that buy bottled water.

Rural customers are served by community entrepreneurs who are responsible for sales, maintenance and payment collection of the financing schemes that these communities receive.

Ecofiltro is present across a number of Central American countries. The organization has a specific focus on providing safe water to school children. It reached 2 800 rural schools and over 750 000 children by distributing filters in remote rural areas. Making free filters available to schools acts as a catalyst to convince the parents to purchase them for the whole family.

Promoting social entrepreneurship in Latin America

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REBECA VILLALOBOS ASEMBIS Sector: Health

Countries: Costa Rica, Nicaragua

Since 1991, Rebeca Villalobos has developed a participatory system of healthcare service across Costa Rica that are high quality, yet low-cost. Today, her company, Asembis offers 30 services, including hearing and dental care, basic vision tests, and sophisticated surgical procedures through 12 clinics with 370 staff.

Asembis helps nearly 500 000 patients a year and has performed 27 000 surgeries to date. Asembis’ consultations and services are roughly 40% cheaper than the competition, which has forced private-sector competitors to lower their prices. At the core of Asembis lies a social work department which provides subsidies to the most vulnerable and disadvantaged populations, thus allowing them to access health services they could otherwise not afford. Asembis covers nearly the whole country and continues to expand through franchises.

How did the program help her?

The i3 program of New Ventures fostered a collaboration between Rebeca and another social entreprise, Doktuz, which led to an alliance allowing patients to receive medical services at home.

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IMPACT REPORT

Promoting social entrepreneurship in Latin America

WHAT NOW

The first phase of the project helped build a robust ecosystem of more than 70 social entrepreneurs across 20 Latin American countries.

The program’s success in the past four years has led the partner organizations to commit and extend the program for another four years.

While the program will continue to foster the social and economic advancement of individuals, families, and communities in Latin America through social entrepreneurship, the second phase will see many improvements and additions:

Increased tailored su

Phase 1 offered a broad range of s support their unique needs, the sec each social entrepreneur’s person tailored support.

Stronger impact mea

Impact measurement will become e be made to collect data directly fro this data .

Even more inclusive

The first phase of the program sup preneurs. The program will now als other entrepreneurs and ecosystem systems change, gender and impac

upport

support to participating entrepreneurs. To more deeply cond phase of the program will focus on understanding nal journey and requirements, and provide even more

asurement

even more granular in Phase II. Considerable efforts will om the users and beneficiaries of social enterprises, and

support

pported a limited number of high-potential social entreso include modules of support available to hundreds of m stakeholders, including online courses on the topics of ct measurement.