The Multilateral Investment Fund (MIF) supports economic growth and poverty reduction in Latin America and the Caribbean through encouraging increased private investment and advancing private sector development. It works with the private sector to develop, finance, and execute innovative business models that benefit entrepreneurs and poor and low-income households; partners with a wide variety of institutions from the private, public and nonprofit sectors; evaluates results; and shares lessons learned.
The MIF is a laboratory for testing pioneering, market-based approaches to development, and an agent of change that seeks to broaden the reach and deepen the impact of its most successful interventions.
POVERTY REDUCTION THROUGH ACCESS
Interventions and programs at the MIF are mainly focused on poor and low-income populations: their households, farms, and businesses. As the MIF sees it, the most effective way to help these individuals and communities overcome poverty in the long term is to address their lack of access to basic services, to finance, to markets and skills. The MIF works to break down barriers in these areas in order to spur productive, equitable growth, and to provide a sustainable means of exiting poverty.
The MIF is the largest provider of technical assistance for private sector development in the region, providing financing in the form of grants, loans, guarantees, equity, and/or quasi-equity, as well as advisory services. This flexible toolkit of instruments allows the MIF to customize its interventions to specific situations and conditions, thereby maximizing its developmental impact.
ON THE GROUND AND IN PARTNERSHIP
45% of the MIF’s staff is based in the region, working on the ground and in partnership with a network of more than 1,000 institutions.
Projects financed by the MIF are executed through partner agencies, which contribute both a significant portion of the project costs, and on-the-ground resources to execute operations and supervise other personnel and entities involved. 70% of this partner network, which includes civil society organizations, nonprofits, industry associations, chambers of commerce, and foundations, has never previously worked with a development bank.
The MIF helps banks and other private financial institutions lend to micro, small, and medium businesses; and is a pioneer in supporting high-impact, dynamic entrepreneurs through the rapidly-developing venture capital, business incubator, and impact investment industries in the region.
The MIF also partners with corporations and corporate foundations in a variety of projects and region-wide initiatives. The MIF has worked with companies seeking to increase their social impact, green their operations, access new suppliers, and/or connect with clients and customers whose needs are not met through traditional business models. Through corporate partnerships, companies benefit from the MIF’s expertise, convening power, and ability to leverage private and public resources for shared aims; while the MIF receives resources that enable its interventions to reach poor and low-income communities on a larger scale.
RESULTS & IMPACT
The MIF’s monitoring, evaluation and impact assessment programs place it at the forefront of results-based management, allowing for constant assessment of its projects’ development impact and sustainability, and in-depth analysis of selected projects. It is committed to thorough evaluation of the results and impact of its work, not only to strengthen the design and focus of its future projects, but also to identify innovative, replicable solutions for development that can be scaled up by the public and private sectors.
The MIF considers the lessons learned from its work to be a public good. By systematizing and disseminating the wealth of knowledge captured from its projects, it allows companies, governments, development organizations, and others working to build economic opportunity to adapt its most promising and innovative development solutions and take them to scale, multiplying their overall impact. Through its events, innovative online platforms, publications and other products, the MIF acts as a knowledge broker, creating opportunities for cooperative knowledge generation and exchange.
AN AGENT OF SYSTEMIC CHANGE
Since its founding, the MIF has built up a broad range of experience and expertise through developing and executing over one thousand individual projects. In several areas, it has built up enough depth to be able to demonstrate its systemic impact. Examples include:
Microfinance: The MIF has played a pivotal role in developing the microfinance sector in the region, from supporting the establishment and growth of microfinance institutions through technical assistance and equity investments, to helping create strong regulations that protect clients from over-indebtedness. Today, there are over 12.5 million microfinance clients in the region, a full third of whom have benefited from MIF support, directly or indirectly. The MIF continues to work on bringing microfinance to underserved communities like rural areas, and on expanding the range of financial services available to microfinance customers.
Remittances: The MIF was the first institution to track and measure remittances to Latin America and the Caribbean—an annual flow of over $60 billion. With the increase in information about this significant source of money, and with MIF projects that have focused on using technology to make remittance transfers less expensive and more secure, the cost of sending money to the region dropped an average of 60% between 2000 and 2010. The MIF has worked with central banks in the region on building their capacity to measure and track remittance flows, and continues to develop financial services, such as savings accounts, for remittance senders and recipients.
Venture Capital: The MIF has been instrumental to the establishment of the venture capital industry in the region. It has worked with governments to develop regulations, directly invested over $200 million in seed funds, leveraged investments from additional investors totaling over $1 billion, and has worked with dozens of first-time fund managers to build leadership capacity. The MIF supported the creation of the Latin American Venture Capital Association, and remains a leader in scaling up the venture capital industry in the region by building larger funds and bringing more countries into the sector.
Youth Training: The region’s economies have grown significantly over the last 20 years, and the MIF has helped ensure that young people are well-prepared for the 21st century workforce. Through 120 projects, the MIF has provided high-impact, comprehensive job training and placement services to over 200,000 youth in 22 countries. Its projects increasingly target low-income, at-risk youth. Through its new multi-stakeholder NEO initiative, the MIF and its corporate, government and nonprofit partners are scaling up its most successful training models, with the goal of reaching at least one million young people by 2022.
Haiti: The MIF has a longstanding relationship with Haiti, having worked there since 1995 in sectors ranging from microfinance and remittances to youth training and agriculture. The MIF was one of the first responders after the 2010 earthquake, providing vital support to financial institutions serving the poor within 72 hours of the disaster, and helping 16 partner institutions in the country resume operations over the following months. Since the earthquake, the MIF has tripled its Haiti project portfolio, and remains committed to bringing innovative models to the island’s households, entrepreneurs and farmers.
NEXT GENERATION PROJECTS
As new priorities and problems emerge, the MIF remains committed to staying on the leading edge of creating innovative solutions to development challenges in the region. Examples of new projects and areas of interest include:
- MICROINSURANCE products that protect the lives and livelihoods of microentrepreneurs and small business owners
- MOBILE BANKING that provides not only payment services, but also savings accounts and other financial products
- MICROFRANCHISING, which connects microentrepreneurs to proven business models from established companies
- INCLUSIVE RECYCLING initiatives that allow informal “waste-pickers” to convert trash into income by participating in large corporations’ recycling programs
- PSYCHOMETRIC TESTING models through which banks assess loan applicants’ intelligence and entrepreneurial potential instead of their credit history or collateral
- SAVINGS PRODUCTS targeting the needs of very low-income households
- BASIC SERVICES such as electricity, water, health care and education, which can be offered through sustainable, affordable models
- WOMEN’S EMPOWERMENT, an area that draws on multiple kinds of interventions to provide training, networking, and financing support to women seeking to start and grow businesses