2024-02-13 23:20:40
The Innovation Fund for Development, launched in 2020 and hosted by AFD, saw its allocation renewed and increased on February 8, going from 15 to 25 million annually. It is chaired by Nobel Prize winner Esther Duflo, a specialist in development issues. Supported projects are chosen for their recognized or probable social impacts. Projects that are not very promising for traditional fundraising, particularly on the African continent.
In the field of impact funds in 2022, only 2% were intended for sub-Saharan Africa, according to a survey by the Global impact investing network. A difficulty that was clearly felt by the Ivorian Hugues Kouadio, who is developing a project to fight once morest lead poisoning. “ Clearly, it’s a bit like the question of a public good. It doesn’t speak to the banks, that’s for surehe confirms. It’s much more a question of public policy at the state level, and therefore obviously these are more public funds. Clearly, banks are not going to finance this type of project immediately. »
Kenyan Tom Osborn works on the mental health of young people. His experience goes in the same direction. “ For the moment, in the field of mental health for example, we do not always have very solid and viable economic cases for more traditional venture capital. », explains the entrepreneur.
Esther Duflo is Nobel Prize winner in economics and president of Development Innovation Fund. The goal of the FID is to change the paradigm: “ It’s really a fund that aims to enable lots of new players, whether NGOs, universities, governments, laboratories, to propose social innovation. So it’s not innovation to make a profit, that’s what’s really very different. »
Making a difference in people’s lives
The ultimate goal is to improve people’s quality of life. “ Always with this objective of creating social value, not market value, insists Esther Duflo specialist in development issues. But since there is no profitability as an indicator of success, what replaces it is impact. » The financing decisions of the Fund and then the evaluation which follows are based in a ” really very organic regarding what difference it makes in people’s lives “. A series of indicators and evaluations have been put in place to do this.
Present to sign a new financing agreement, the director general of the French Treasury admits to liking innovation “ when we are sure that it will succeed “. A paradoxical vision that the development economist challenges.
« For us, when a particular project does not succeed, it is not as such a failure », highlights the Nobel Prize. What counts is to have been able to test a good idea a priori. “ It doesn’t work, too bad, let’s move on to the next thing. If it works, on the other hand, to have this rigorous evaluation that the project has made a real difference in people’s lives, that allows it to be scaled up. “, she further emphasizes.
Sixty-six projects have already received support from the FID. Whether they are in the testing phase to prove the effectiveness of the innovation or in the development and scaling phase. 90% of them are on the African continent.
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