It only takes a small loan – sometimes $2,000, sometimes $10,000 – for an entrepreneur in a developing country to create a business that has the potential to transform a community.
The Small and Growing Business (SGB) program, run by Origin Capital, World Vision Canada’s impact investing arm, and VisionFund International, the NGO’s microfinance arm, does exactly this. It was created in partnership with Kerry and Mandy Shapansky of the Shapansky Foundation.
While there are millions of people accessing microfinance, there is no pathway for their businesses to become larger and graduate to a conventional banking relationship.
SGB’s model is to select those people who have received micro-financing and who demonstrate the potential to scale up and increase the size of their businesses. In partnership with VisionFund, Origin Capital provides loans (of up to $25,000) to these entrepreneurs and coaches them on business fundamentals. The program’s investors in Canada receive a three per cent annual return over a three-year term.
“By selecting maybe one or two per cent of those people, our goal is to enable sustainable change through providing capital and coaching. And when they move to a conventional banking relationship, we can recycle that money back into the program,” says Mandy Shapansky.
“The secret sauce is identifying the right clients with an entrepreneurial mindset and a willingness to be coached – those are the ingredients that make this program successful and capable of being leveraged,” says Mandy Shapansky, former CEO of Xerox Canada, who formed the family foundation with her husband, Kerry Shapansky, a self-described serial entrepreneur who has started, sold and bought 15 companies during his career.
“When I was a young boy, my mother said, ‘Some people are born with small gifts and they have a small requirement to give back to the world. You have large gifts and you have a large requirement to give back,’” recalls Mr. Shapansky.
At the time he thought he was singled out, but later learned his mother had given that same guidance to his siblings. That early motivation resulted in many opportunities to give back, including through the Shapansky Foundation, culminating in the partnership with World Vision.
Since its inception, the SGB program has supported more than 1,000 businesses in Africa, Asia and Latin America.
“As we have visited the field many times to provide training and operational support, we have had the opportunity to witness the growth and development of these businesses and their transformative impact on surrounding communities,” say the husband and wife duo.
“We are committed to the expansion and development of the program and excited about the long-term impact,” they say, noting that as businesses in developing countries grow, they provide employment, spawn other businesses and bring much-needed infrastructure to vulnerable communities.
“We loved the idea of combining a business return and a social impact return – it seemed right up our alley. We had the opportunity to see the work of World Vision in the field and its global reach. We were impressed with the resources, the leadership and the strong relationships in the community where they work,” says Mr. Shapansky.
For those investors considering the SGB program, Mr. Shapansky says: “When we think of charity and impact, we tend to lead with the heart, and in business we lead with the head. Impact investment is a fusion of the two.”
Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved in its creation.