Investing in an interconnected world
Thereâ€™s another side to finance that starts with a youthful impulse to save the world and evolves into something both savvy and humane.
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We hear a lot about social entrepreneurship in the world these days. An entrepreneurial apporach to philanthropy is typified by the Gates Foundation and others that attempt to create sustainable projects around the world that go beyond simply aid to poor places, traditional cash payments from one place to another.
After a funny encounter with a child wearing her cast-off sweater in Rwanda, Jacqueline Novogratz realized how interconnected the world really is. Novogratz has been at the front of a movement that combines social investing and social entrepreneurship in some of the poorest countries in the world.
Novogratz is founder of The Acumen Fund, a nonprofit that supports small businesses in developing countries, and author of "The Blue Sweater: Bridging the Gap between Rich and Poor in an Interconnected World."
"In the 1980s, through building a micro-finance bank, as it turned out, the women with whom I started the bank, played out every conceivable role in the Rwandan genocide. It was that whole experience in the 1990s that made me reevaluate both markets as well as traditional aid, and decided that neither markets alone nor traditional aid alone were really aleviating poverty in a way that I thought we could as a world.
"In 2001, we built the Acumen Fund which uses a concept called 'patient capital' between the market and traditional development and invests in entrepreneurs looking at bringing afordable quality services to low-income people."
Novogratz disagrees with the pure-market critics that claim the way out is acheived by markets alone. She says that without access to low-priced goods and services, these impoverished numbers will remain where they are, economically.
"I do see, in slums, unbelievable potential, but without the opportunity to access affordable goods and services people are going to stay there."
"With Acumen, we have seen tens of millions of people access services that they wouldn't otherwise be able to, and 23,000 job created over the last seven years."