MICROCAPITAL BRIEF: Public Sector Commits $61m to SMEs via Bamboo-UNCDF Initiative for the Least Developed (BUILD) Fund

The UN Capital Development Fund (UNCDF) recently announced that it and the Luxembourg-based fund manager Bamboo Capital Partners have raised the equivalent of USD 55 million for the Bamboo-UNCDF Initiative for the Least Developed (BUILD), a fund investing equity and debt in small and medium-sized enterprises (SMEs) in low- and middle-income countries. The partners also have raised USD 6.5 million for the BUILD Enterprise Resource Technical Assistance (BUILDER TA) facility to provide advisory support to BUILD clients.

The purpose of BUILD is to attract commercial funding to sectors such as food security, financial inclusion and renewable energy, with a significant portion supporting entrepreneurs who are female, young or both. Thus the majority of the funding committed to BUILD so far, which is all from public institutions, is in the form of first-loss capital. The funds are from the governments of Canada, Luxembourg, Norway and Sweden plus development finance institutions of the Nordic countries and the US. The largest sum is CAD 32 million (USD 24.9 million) from Global Affairs Canada.

BUILD garnered its first investment in December 2020. Its outgoing investments range in size from USD 250,000 to USD 2.5 million. The fund’s target returns range up to 5 percent per year.

Founded in 2007, Bamboo Capital deploys investments intended to “generate lasting impact and improve the lives of the world’s most marginalised communities while delivering strong financial returns” in four main sectors: access to clean energy, access to healthcare, agribusiness and financial inclusion. Since its launch through 2020, the firm raised approximately USD 370 million for investments in approximately 30 countries.

Established in 1966 and headquartered in the US city of New York, UNCDF endeavours to create opportunities for poor people and their businesses by increasing access to microfinance and other forms of investment capital. The organisation operates in 47 low-income countries in Africa, Asia and the Pacific with a particular focus on countries emerging from crises. For 2020, UNCDF had a budget of USD 75 million and supported initiatives providing financial services to 3 million unbanked and underbanked clients.

By Saulius Simonas Ramanauskas, Research Associate

Sources and Additional Sources

UNCDF press release
https://www.uncdf.org/article/7668/us60-million-in-commitments-for-un-affiliated-impact-investment-vehicle-announced-at-the-finance-for-development-forum

BUILD description
https://s.tiled.co/1HdPVv5/the-build-fund

Bamboo homepage
https://bamboocp.com

UNCDF homepage
https://www.uncdf.org

Global Affairs Canada homepage
https://www.international.gc.ca/global-affairs-affaires-mondiales/home-accueil.aspx?lang=eng

Previous MicroCapital brief on UNCDF
https://www.microcapital.org/microcapital-brief-empire-mosabi-orange-uncdf-seek-to-boost-financial-inclusion-in-sierra-leone-with-focus-on-financial-literacy-recruiting-women-as-mobile-money-agents

Previous MicroCapital brief on Bamboo and BUILD
https://www.microcapital.org/microcapital-brief-mwezi-nets-inaugural-500k-from-build-fund-of-bamboo-capital-uncdf-to-expand-access-to-pay-as-you-go-solar-products-in-east-africa

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