Development Marketplace
The Development Marketplace Program (DM) is a pioneer in supporting the testing of early stage products and processes. Housed in the World Bank Institute, the DM has, since its inception in 1998, significantly increased the supply of social goods and services by awarding more than $60 Million in grants to more than 800 innovative projects identified through country, regional and global competitions.
Development Marketplace: A New Call to Arms
The Development Marketplace is now ten years old. It was started at a time when the power and promise of social entrepreneurship was a mere gleam in the eyes of the development community. A movement was just starting to take shape. A movement based on the belief that social entrepreneurs with their passion for equitable growth, with their “out of the box” thinking, with their business skills and with their deep connections with the community could partner and complement public or private sector efforts to deliver products and services needed by the poor and improve livelihood opportunities.
DM has contributed by supporting more than 1,200 social entrepreneurs with about US $60 million of grant funds.
As the DM program enters its second decade it faces a new set of challenges. While a thousand ideas are blooming, the numbers of ideas that go to scale are still limited, and the numbers that go on to have systemic impact are even less.
Going to scale involves many things. A viable business model has to be defined and tested. Then a phased roll out has to happen. Inevitably it is a trial and error process that needs patient capital. The entrepreneur feels less lonely and the challenges appear less daunting if he/she has access to mentoring and advise. And finally scaling requires access to finance at all stages of the roll-out and growth process.
The “for profit” private sector is showing strong interest in partnering with and supporting social enterprises in ways that go beyond Corporate Social Responsibility. Large pools of private individual and institutional capital are now available by way of growth finance. Large foundations are taking the lead and small and medium-sized foundations are looking for mechanisms to collectively channel a significant portion of their annual giving. Investment fund managers and investment advisors are considering debt and equity financing instruments targeted at this sector that could become a new asset class attractive to socially conscious individual and institutional investors.
But surfacing well-conceived projects, identifying the best business models and structuring a pathway to predictable and readily available finance is not easy. The intermediation infrastructure and systems for systematic and quick access to growth finance remain to be established. Costs tend to be high because of limitations of financial data, remoteness of the enterprise and absence of standardized metrics. And most importantly low cost support systems are required to help entrepreneurs think through their growth strategies, tackle implementation bottlenecks, and connect with funders.
These are the challenges that the DM is now taking on. We want to tackle these in partnership with the community of social entrepreneurs, with funders, with technical assistance providers, with governments and with the private sector. Our goal is to go from retail grant support to support for creating a permanent intermediary structure to deliver financial and non-financial services required to go to scale. The issues of strategy and design that we want to address are:
- How do we scale up provision of low cost customized technical assistance and mentoring services?
- How do we construct simple and robust measures of social impact, scalability, and financial sustainability?
- How do we construct a coalition of funders that collectively provide social entrepreneurs with a predictable pathway to growth finance and that enable projects to go to scale?
For more information on the overall program visit: www.developmentmarketplace.org.
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