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December 2017

Powering up Africa through innovation

Simon Bell's picture
Recent World Bank investment climate surveys find that the top two constraints for small and medium enterprises (SMEs) in Africa are access to finance and access to energy. Given that SMEs contribute disproportionately to boosting job creation, GDP, and exports, addressing these two constraints is critical to promoting economic development on the continent.
 
A new project combining skills across the World Bank Group and IFC is taking advantage of disruptive advances in the energy and finance sectors to address these longstanding challenges for SMEs.
 
Current access to electricity remains woefully low and is a major impediment to economic growth. More than half of Africa’s population isn’t connected to the energy grid and has no access to reliable power. At the same time, fewer than 50% of adults have an account with a formal financial institution.
 
In recent years, however, two important developments have made it possible to begin addressing these challenges:
  1. Off-grid energy solutions—notably solar power—have fallen dramatically in price with new business models working to scale them
  2. New digital-based financing mechanisms, such as crowdfunding, cryptocurrencies, peer-to-peer lending, psychometric testing, big data, and blockchain have emerged as tools for under-served finance markets.

There are strong parallels in these advances for both sectors. Whereas both energy and finance are traditionally provided by large-scale, centralized service providers—state-owned electricity utilities and large commercial banks, respectively—new solutions have effectively decentralized and democratized the provision of these services. Now a range of smaller, innovative companies can provide these services and consumers can go “off-the-grid” for both their energy and financial needs.
 

Anne Mwaniki, CEO of Solimpexs Africa, a Kenyan company producing solar-powered heating systems.
Photo © infoDev / World Bank

Delivering secure retirement - lessons from Canada

Fiona Stewart's picture


How does my pension fund invest my money? More and more people around the world are asking this question. As the global population ages, it has becoming increasingly important to ensure that pension funds are efficiently and effectively managed so they can deliver a secure income in retirement.
 
At the same time, countries require more investment in productive areas such as infrastructure, housing and new businesses to continue to grow. Pension funds can provide that long-term domestic capital that countries desperately need for investment in these areas. 

Globally, pension funds have some US$38 trillion in assets under management; the world’s 300 largest pension funds manage around $16 trillion. This ranges from the Government Pension Investment Fund (GPIF) in Japan -- the largest pension fund in the world with $1.3 trillion in assets -- to funds such as the Government Institutions Pension Fund (GIPF) in Namibia which, though smaller in absolute terms (owning $7 billion), constitutes almost 70% of domestic Namibian GDP.

In Singapore, exponential technologies flourish and forward-looking policies are being established to address development challenges

Paramita Dasgupta's picture
Singapore delivers for its talented entrepreneurs by extending assistance, financing, and incentives. In the last decade, Singapore has invested more than US$22 billion into helping companies develop and test new products and solutions. As a result, the number of start-ups in Singapore multiplied from 24,000 in 2005 to 55,000 in 2014.
 
Photo Credit: Mike Behnken

India: Digital finance models for lending to small businesses

Mihasonirina Andrianaivo's picture
Economic analysis suggests that the next impetus for growth in India's economy will come from micro, small, medium-size enterprises (MSMEs) and startups.

A slew of programs announced in recent years have fostered a more favorable business environment for financial technology – or fintech – models to emerge in the MSME lending space – in India. 

Resilience, Sustainability, and Inclusive Growth for Tourism in the Caribbean

Louise Twining-Ward's picture
Tourists have long flocked to the Caribbean to enjoy the turquoise water, island landscapes and diverse cultural experiences. While these trips are vacations for travelers, tourism is the  driving socio-economic sector for most Caribbean nations.  Tourism is the lifeblood of the Caribbean economy, and comprises 40% of the region’s GDP and employs 13.4% of the people.  However, challenges include better harnessing the region’s natural capital in a sustainable way and making the tourism sector more resilient to natural disasters.