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Impact Investing as a Source of IB Finance

September 16, 2013 Manila, Philippines

Confidential 9/13/2013

Impact Investment Framework and Landscape

Philanthropy Services
Priority is social / environmental support and change through charitable donation Type Grants Profile Not-profit trusts or foundations; For profit social enterprises; CSR initiatives

Impact Investments
Goal is social / environmental change with moderate to risk-adjusted financial returns Type Equity or debt Profile For profit social enterprises

Commercial Investments
Goal is maximized financial return Type Equity or debt Profile For profit enterprises

Source: Adapted from Investing for impact: How social entrepreneurship is redefining the meaning of return , Credit Suisse, January 2012.

HIGH Solely ProfitMaximizing Investing

FINANCIAL FIRST INVESTORS Optimize financial return with an impact floor IMPACT FIRST INVESTORS Optimize social or environmental impact with a financial floor

Target Financial Return

IMPACT FLOOR

FINANCIAL FLOOR

NONE NONE
Source: Monitor Institute, 2011.

Philanthropy HIGH

Target Social and/or Environmental Impact

Confidential 9/13/2013

Comparison of Financing Instruments

Financing Instrument
Grants

Key Terms
Duration: Short-term Annual payments: None Repayment: None Duration: Long-term (37 years) Annual payments: None Repayment: Depends upon structure Duration: Long-term (37 years) Annual payments: Interest payments (variable) Repayment: Yes

Implications
Usually restricted use for predefined projects High fundraising costs Low entrepreneurial flexibility in the use of capital Inexpensive financing instrument No dilution of ownership Risk sharing with the social investor Great structuring flexibility Annual interest payments require low-risk business model No dilution of ownership Far-reaching rights of capital providers in case of default Moderate entrepreneurial flexibility in the use of capital Dilution of ownership Social investor receives control and voting rights Profit participation for social investor Potential impact on corporate culture Annual interest payments require predictable cash flows Dilution of ownership only if converted into equity Mandatory repayment if not converted to equity Profit participation for social investor

Hybrid / Patient Capital

Debt

Equity

Duration: Long-term (5-7 years) Annual payments: Dividend payments (variable) Repayment: No Duration: Short-term (13 years) Annual payments: Interest payments (variable) Repayment: Yes

Mezzanine capital

Source: Adapted from Social Investment Manual: An Introduction for Social Entrepreneurs. Schwab Foundation for Social Entrepreneurship & Technical University of Munich, 2011.

Confidential 9/13/2013

What is a Social Enterprise

Social enterprises blur traditional boundaries between for-profit and non-profit.
Organizations categorized by PURPOSE Maximize financial benefit to owners earned Maximize social benefit

FOR PROFIT
Organizations categorized by INCOME

Corporate Social Responsibility (CSR); Environmental, Social, and Governance (ESG)Sustainability

Social Enterprise

Business Methods Entrepreneurship Public-Private Partnership Privatizations etc.

Source: Investing for impact: How social entrepreneurship is redefining the meaning of return, Credit Suisse, January 2012.

Contributed

Non-Profit / Government

Confidential 9/13/2013

What We Look For in Social Enterprises Model Management Market

Is there a commercially viable business model that can be scaled. Is there an economic value proposition across the supply chain.

Does the team have the capabilities to execute the business plan

Is there a market for the products or services and it is large enough to support growth

Confidential 9/13/2013

Impact Measurement: Outputs and Outcomes

Impact Value Chain / Logic Model
Inputs What is put into the venture Activities Ventures primary activities Outputs Results from Ventures operations Outcomes Changes to social systems v/s What would have happened anyway Goal Alignment Activity and goal adjustment

Source: Adapted from Investing for impact: How social entrepreneurship is redefining the meaning of return , Credit Suisse, January 2012.

Sample Impact Measurement / Rating Agencies

Confidential 9/13/2013

Sample Impact Measurement Metrics

We assess the impact of our investments and monitor a list of customized indicators including the following: Healthcare:
Number of patients treated Number of doctors Number of dentists, Number of HIV+ patients treated Number of employees training per quarter

Rural Development:
Number of people reached Number of investments in rural focused enterprises

Renewable Energy:
Number of solar products sold, Number of entrepreneurs employed and income generated Carbon offsets per year Total beneficiaries Number of plants in operation, Total energy capacity installed Number of households served

Housing:
Construction completed, Plots registered Houses built and sold

Education:
Number of student loans, Percentage of female students Percentage of low-income students Teachers employed Children enrolled Low-income children, Number of hours of teacher training per quarter

Livelihood:
Number of employees Number of disadvantage employees Number of female employees

Confidential 9/13/2013

We Are A GIIRS Rated Pioneer Fund!

Oasis is one of the first funds to receive a rating using this innovative impact measurement system.

Confidential 9/13/2013

A Global Private Equity Group

$250M

46

25

Private Equity Investments Countries Regional Hubs

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Bamboo Finance Funds

Financial Inclusion Fund

$195M
The Financial Inclusion Fund invests in a range of microfinance institutions and funds serving the lowest socioeconomic segments in emerging economies.

$53M
The Oasis Fund invests in commercially viable companies that provide access to housing, healthcare, education, energy, financial services and agriculture.

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Global Team Managing Global Portfolios

Luxembourg Geneva & Zurich (Switzerland)

FINAE (Mexico) APOYO INTEGRAL (Mexico) APOYO INTEGRAL (Guatemala) BANCO POPULAR (Honduras) SICSA

CREATION INVESTMENTS BAI TUSHUM XAC BANK (Mongolia) (Kyrgyzstan) CHF (Romania) CHF (Lebanon) ORB (India) IMMERSION (Pakistan) GREENLIGHT PLANET (India) HUSK (India) SVASTI (India) AAVISHKAAR ASMITHA (India) JOMA (Vietnam, Laos) VAATSALYA VORTEX (India) BRIDGE (Philippines) (India) CFE (Uganda)

APOYO INTEGRAL (El Salvador) CFE (Panama)

Bogot (Colombia)

EASL (Ghana)

AMfB (Nigeria)

BANCO WWB CALI (Colombia)

EAMF (Cameroon) FASO (Uganda) KOPO KOPO (Kenya)

Singapore

Nairobi
CFE (Tanzania) VIDAGAS (Mozambique)

MIBANCO (Peru) EDPYME NUEVA VISION (Peru)

BILLE (Brazil) BANCO FIE (Bolivia) FIE GRAN PODER (Argentina)

EFC (Zambia)

AFRICAP CARECROSS (South Africa)

Financial Inclusion Fund Current Investments Oasis Fund Current Investments

Office

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Oasis Fund: Portfolio of Companies

A Global Multi-Sector Private Equity Fund
Focus on growth-stage companies providing products and services to low-income consumers in developing and emerging markets

Education
Mexican financial institution providing loans to University level students from low and middle income households. Operates K-12 schools pin India providing affordable education to students in semiurban areas.

Energy
Combines cutting-edge technology with innovative distribution networks to manufacture and sell low-power LED lanterns at low cost. Provides electricity to rural households and businesses using locally based biogas plants that are powered from rice husk. Manufactures and sells solar photovoltaic and solar-thermal systems in rural/semi-urban areas of India through a unique network of direct branches. Sells LPG to rural customers in Mozambique primarily to rural health centres to power vaccine refrigeration units.

Financial Services
Designs, develops, and distributes low cost ATMs for semi urban and rural areas in India. Debt fund created to provide financing primarily to second and third-tier MFIs in Central America.

Healthcare
Operates a network of hospitals providing affordable primary and secondary care in rural and semi urban areas in India Provides access to affordable healthcare in South Africa with a focus on primary care services, HIV/AIDS testing / treatment, and the manufacturing and distribution of low-cost generic medicines.

Agriculture
Coconut oil processor increasing income for farmers, workers, and micro franchisers in rural Kenya and Tanzania.

Housing
Housing project in Brazil focused on construction of affordable houses to lowincome families. Affordable housing project that develops, builds and sells homes targeted at low and middle income families in Lahore, Pakistan.

Livelihood
Operates a chain of bakeries and cafs in Southeast Asia providing employment to severely disadvantaged women who are victims of domestic abuse, sexual violence or trafficking.

Entrepreneurship
Aavishkaar India Micro Venture Capital Fund (AIMVCF)

One of the few micro venture funds in India focused on investing in early stage social enterprises.

Confidential Confidential 9/13/2013 July 2012

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Broad Requirements for a Business Plan

A business model that is financially sustainable or has a clear path toward sustainability with significant social impact. Business Overview
Brief description of facilities and/or services provided. What the company does.

Business Model
Brief description on how the company executes its business. Description of revenue sources. Organisation Chart. Key Geographies.

Market Analysis
Market size/ potential Competitive analysis Regulatory risk assessment

Social Mission / Scope

Brief description of what the impact is, how it is achieved and details on impact till date

Growth Plans
Brief description on what and how the Company plans to grow. Expected financial and operational targets. Details on potential impact.

Financial Overview
Historical (2-3 years) and future (3 to 5 years) Operating figures Income Statement figures Balance sheet figures

Management / Founders
Brief bios of Founders and Key Management (current and prospective) team.

Shareholders / Partners
Brief background on existing investors, advisors and partners

Use of Proceeds
Investment amount required and description on use of proceeds.

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Broad Investment Overview

Investment Criteria
1. 2. 3. 4. 5. 6. 7. Social Impact : Product or service that directly benefits low income communities or integrates them in a value chain. Stage of Business: Growth or expansion phase. At least three years of operating history. Financial Requirement: At least US$500,000 of annual revenues. Legal Requirement: For-Profit registered Company. Investment Size: Minimum investment of US$3mn. Sectors: Healthcare, Energy, Education, Housing, Clean Water, Sanitation, Livelihood and Financial Inclusion. Geographies: All.

Investment Readiness
1. 2. 3. 4. 5. Audited Financials Governance Structure existing board structure and influence on business strategy Internal controls risk management systems and process Reporting structure periodicity, transparency Business viability based on onsite financial, social impact and legal due diligence conducted to analyse, review and substantiate the business plan and operations .

Investment Requirements
1. 2. 3. 4. Shareholding: Significant minority. At least 20% and up to 40%. Board Seat. Typical equity investor rights right of first refusal, anti-dilution, tag, drag, affirmative rights etc. Instrument: Equity or convertible debt

Post-Investment Value-add
1. 2. 3. 4. Strengthening governance, financial management and internal controls Building organizational capacity Facilitating international expansion plans Enabling both debt and equity fundraising

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THANK YOU
Learn More About the Progress of Our Portfolio by Downloading the Bamboo Finance 2013 Impact Report

www.bamboofinance.com/impact-report/ anu@bamboofinance.com

Confidential 9/13/2013