NEW YORK, NY– Entrepreneurs launching new financial services targeting the two billion poor and underserved customers around the world now have more resources available, thanks to Catalyst Fund, a sponsored project of Rockefeller Philanthropy Advisors managed by Bankable Frontier Associates (BFA).
Funded by JPMorgan Chase & Co and the Bill & Melinda Gates Foundation, and developed in partnership with Accion Venture Lab, Catalyst Fund aims to support startups that have not raised institutional venture capital, but may be able to if they achieve specific milestones for the growth or development of their businesses. The Fund will provide small, flexible grants as well as one-on-one mentoring support to help develop new financial inclusion products and businesses and improve the investment readiness of the start-up ventures. With the support of Accion Venture Lab, the Fund will set up technical assistance modules, as well as collect and disseminate impact evidence and lessons learned from the startups.
“Improving financial health not only helps individuals thrive, but also supports more resilient communities and economies,” said Janis Bowdler, Head of Financial Capability Initiatives, JPMorgan Chase. “JPMorgan Chase is proud to be a part of Catalyst Fund to create opportunities for more inclusive economic growth across the globe.”
According to the World Bank, two billion people worldwide lack access to regulated financial services, such as savings, credit or insurance. This lack of access is due to a variety of factors, including banking outlets being too few or too inconvenient, or due to the poor or nonexistent credit history for the poorest consumers; lack of awareness of such services; cultural barriers and costs. However, financial inclusion can help alleviate poverty and create economic growth.
Recognizing financial inclusion’s importance, digital startups are rapidly disrupting and finding new ways to partner within the financial services ecosystem in the developing world. Emerging technologies—smartphones and cloud computing, mobile money and branchless banking, social media and machine learning—make it cheaper and easier to deliver financial services to poor and underserved markets. Catalyst Fund aims to accelerate the industry’s collective understanding of these new models by funding promising startups, supporting them with expert technical assistance and generating insights and interesting lessons. Additionally, it will help facilitate new relationships and create a pipeline of potential investment opportunities for investors.
“The opportunity here is two-fold,” said David Porteous, Managing Director of BFA. “Success will come by fostering innovation breakthroughs that create both significant traction for the startups and valuable insights for the sector.”
Over the next two years, Catalyst Fund will deploy $2M in grant capital and $1M in in-kind advisory services to about 20 start-up enterprises globally. Mentorship will be provided by a steering committee of leading impact investors: Accion Venture Lab, Bill & Melinda Gates Foundation, Gray Ghost Ventures, Omidyar Network, and Quona. In addition, the Fund will collect and share lessons about financial inclusion products, technologies and business models and the process of startup-led innovation with the industry via blog posts, bootcamps, panel discussions, and more.
“Catalyst Fund is itself an innovative example of industry collaboration,” said Chris Page, Executive Vice President of Rockefeller Philanthropy Advisors. “It combines mentoring from impact investors, grant capital from committed donors and advisory services from expert consulting firms.”
The Fund will start operations in January and aims to make its first investments in the first half of 2016.
For more information about Catalyst Fund, please visit catalyst-fund.org.
About Rockefeller Philanthropy Advisors
Rockefeller Philanthropy Advisors (RPA) is a nonprofit organization that currently advises on and manages more than $200 million in annual giving by individuals, families, corporations, and major foundations. Continuing the Rockefeller family’s legacy of thoughtful, effective philanthropy, RPA remains at the forefront of philanthropic growth and innovation, with a diverse team led by experienced grantmakers with significant depth of knowledge across the spectrum of issue areas. Founded in 2002, RPA has grown into one of the world’s largest philanthropic service organizations and, as a whole, has facilitated more than $3 billion in grantmaking to nearly 70 countries. RPA also serves as a fiscal sponsor for more than 25 projects, providing governance, management and operational infrastructure to support their charitable purposes. For more information, please visit rockpa.org.
About Bankable Frontier Associates LLC
Bankable Frontier Associations LLC (BFA) is a niche consulting firm that focuses on providing clients with high quality advice on strategy, policy and implementation of financial sector development in emerging markets. BFA has undertaken several projects for the Bill & Melinda Gates Foundation Financial Services for the Poor group in the past three years. Other BFA clients include a number of leading public agencies such as the World Bank Group and innovative private financial providers such as international NGOs, international banking groups and mobile network operators. BFA focuses on the questions and opportunities created by financial sector development, and it has completed assignments for clients based in Europe, Asia, Africa, the US and Latin America. With a core team based in Boston, MA (USA), BFA draws on expertise in specialist areas from a range of skilled associates across the globe. For more information, please visit bankablefrontier.com.