Social entrepreneurship in Asia
The Aavishkaar Frontier Fund promotes social entrepreneurs in Asia with business models that improve the living conditions of local people. The funds' initial target countries are Bangladesh, Sri Lanka, Indonesia and Pakistan. The fund invests its equity capital in selected socially responsible companies from the beginning through to the growth phase, in addition to offering advisory services. The fund volume currently amounts to USD 45 million.
The companies co-financed by Aavishkaar are engaged in various activities, for instance developing innovative teaching materials for children from disadvantaged families, or producing and marketing organic curry powder and other traditional spice mixes. In doing so, the entrepreneurs focus on innovative, locally adapted solutions, as does the company Ulink Bioenergy, that Aavishkaar has cofinanced since 2013. By using modern mobile phone technology, smallholders in remote areas that were previously reliant on traditional sources of supply can now order seeds and tools per mobile telephone. The goods are delivered promptly and directly to the customer. The optimised supply options mean that smallholders benefit from greater productivity and can produce higher quality goods.
In 2015, DEG provided the Aavishkaar Frontier Fund with USD 10 million. KfW Entwicklungsbank is a further cofinancier with USD 10 million in funds from the Federal Ministry for Economic Cooperation and Development. Through their commitment as anchor investors, DEG and KfW are strengthening the capital base of the fund and thus mobilising additional investors. Small and medium-sized family-run enterprises which find it difficult to access investment capital benefit particularly from this.