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A UN-backed boost for women-run businesses in the developing world

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A client in Cambodia supported by IIX’s WLB1 (Women’s Livelihood Bond 1)., by Impact Investment Exchange. Photo: UN

Many women running small businesses in emerging markets in developing countries have to juggle their business objectives with family obligations and personal savings goals. By supporting a women-focused bond providing loans to microfinance institutions and impact enterprises, the UN is helping women entrepreneurs facing similar challenges, to succeed in their professional and private lives.

Sokkheng, who runs a village store in Cambodia with her husband, lacked confidence when it comes to choosing the best approach to reinvest in her business, potentially making her vulnerable to economic and financial risks.

Today, her prospects have markedly improved, thanks to the support of a microfinance institution with a history of promoting the well-being of rural society, backed by a loan from the world’s first financial product focused on women to be listed on a stock exchange; the product is called the Women’s Livelihood Bond Series (WLB Series) and has been launched by Impact Investment Exchange (IIX).

Microfinance, major impact

The microfinance company approved a microloan for Sokkheng’s store and, crucially, provided expert financial advice. According to a UN-backed study, around 89 per cent of Cambodian adults find it challenging to manage their personal finances.

Financial education is an important way to ensure that more people can establish savings priorities, spend in a smarter way and, crucially for women entrepreneurs such as Sokkheng, feel more fully informed when they take out loans or look for other forms of financial support.

Armed with the information she received, Sokkheng now has better cash management knowledge, helping her to improve the profitability of her business. She also signed up for microinsurance, which now provide her with additional economic security in times of emergencies.

Forging stronger bonds

The microfinance institution that helped Sokkheng has been able to scale up its operations and help more women borrowers, thanks to IIX’s WLB1, the first in a series of gender bonds, listed on the Singapore Exchange. IIX’s WLB Series is designed to create sustainable livelihoods for some two million women in Cambodia, Philippines, Sri Lanka, Indonesia and India.

Following the success of the first bond, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) and the UN Capital Development Fund (UNCDF), have partnered to provide support for the second bond in the series.

This support came in the form of a grant to help IIX to undertake impact monitoring and to help scale up the WLB Series.

The second WLB (WLB2), a $12 million bond, focuses on supporting 250,000 women in the region: capital is lent to several microfinance institutions and impact enterprises (companies which look to make a positive impact to society, alongside making a profit), chosen because they improve women’s access to finance, essential goods, assets that generate income, and vocational training.

Commenting on the launch of the second bond, Armida Salsiah Alisjahbana, Under-Secretary-General and Executive Secretary of ESCAP, said “we are proud to announce our partnership with IIX’s Women’s Livelihood Bond Series, which embodies the bold innovations that are needed to advance progress for the world’s poorest communities.”

Judith Karl, Executive Secretary of UNCDF, said, “We are excited to work with IIX, ESCAP, the Rockefeller Foundation and other key partners to demonstrate that viable investment vehicles can be created to attract finance from the international capital markets to the countries and people that need it most.”

Life for Sokkheng and her family has been transformed by IIX and microfinance: her business has expanded, and her household income has grown. She can now set aside savings every month, and look forward to a comfortable, and secure retirement.

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Finance

APEC BEST Award Announced Top Female Entrepreneurs

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The annual APEC Business Efficiency and Success Target Award, known as the APEC BEST Award, announced its 2020 winners, from a diverse group of effective entrepreneurs, innovators and managers around the APEC region.

Producer of gluten-free, healthy food products, Svetlana Shmakova, from Russia, won the top prize of APEC BEST Award with her company, Foodcode.

“The idea of Foodcode is not only about business, but also about protecting family and ensuring that we put health and well-being of people first, through quality, healthy and sustainably produce products,” Shmakova explained.

“The contest provided us with a unique opportunity to learn more about other business models, connect with fellow entrepreneurs and managers, explore new partnerships and expand our markets,” she added.

Meanwhile, Cherrie De Erit Atilano from the Philippines, founder and chief executive officer of sustainable food system and inclusive agribusiness of her company, AGREA, won the category of Best Top Manager in the post-pandemic economy.

“Inclusive and sustainable agriculture plays an even more critical role in the post-pandemic world,” Atilano said. “This award is a testament to the resiliency and compassion of women in the agricultural supply chain alongside men who persevered in bringing food to the table of both producers and consumers.”

“Women should play a significant role in our concerted efforts to recover and rebuild better as a region,” said Carolina Cuevas, Chair of the APEC Policy Partnership on Women and the Economy. “The innovation, creativity and resiliency shown by our women entrepreneurs and managers involved in the APEC BEST Award are the embodiment of this spirit.”

The contest is an initiative of Russia with China, Japan, Malaysia and Mexico as co-sponsors of this year’s contest. This year’s contest featured 20 nominees from 11 APEC economies, competing under the theme of “Women Business Leadership in Post-Pandemic Recovery.”

“All of us live in extremely challenging times now with the lingering negative impact of the economic and health crisis brought about by the COVID-19 pandemic,” said Natalia Strigunova of Russia’s Ministry of Economic Development. “We believe that women’s entrepreneurship should be a strong driver for post-pandemic recovery.”

Besides the 2020 APEC BEST Award grand prize and the award in the Best Top Managers category, the contest also awarded six winners in the following categories:

  • Best Growth Potential: Lu Yunjuan, Beijing Snowlotus Biotechnology from China
  • International Attractiveness: Winnie Chan Wei Wei, Bynd Artisan from Singapore
  • Best Business Sustainability in Tackling the Pandemic: Norzilawaty Binti Mohd Isa, Lykke Familie Enterprise from Malaysia
  • Fourth Industrial Revolution Project: Hanna Kim, Grip Corporation from Korea
  • Best Family Business Support: Daniela Carolina Schneider Alvear, Celifamily Gluten Free from Chile
  • Best Social Impact: Carys Mihardja, Carys Cares from Indonesia

“The goal of the APEC BEST Award is not only to promote women’s leadership and best practices amidst the COVID-19 pandemic, but also to provide support to female entrepreneurs, replicate the best business models and expand their networks beyond their home economies to encourage more women to establish their own businesses,” added Irina Saltykova, who leads the APEC BEST Award project.

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M&A valuations boom in the second half of 2020, despite COVID-19 impacts on the economy

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M&A valuations are soaring, with rich valuations and intense competition for many digital or technology-based assets driving global deals activity, according to PwC’s latest Global M&A Industry Trends analysis.

Covering the last six months of 2020, the analysis examines global deals activity and incorporates insights from PwC’s deals industry specialists to identify the key trends driving M&A activity, and anticipated investment hotspots in 2021. 

In spite of the uncertainty created by COVID-19, the second half of 2020 saw a surge in M&A activity.

“COVID-19 gave companies a rare glimpse into their future, and many did not like what they saw. An acceleration of digitalisation and transformation of their businesses instantly became a top priority, with M&A the fastest way to make that happen — creating a highly competitive landscape for the right deals,” says Brian Levy, PwC’s Global Deals Industries Leader, Partner, PwC US.

Key insights from the second half of 2020 deals activity include:

  • Dealmaking jumped in the second half of the year with total global deal volumes and values increasing by 18% and 94%, respectively compared to the first half of the year. In addition, both deal volumes and deal values were up compared to the last six months of 2019.
  • The higher deal values in the second half of 2020 were partly due to an increase in megadeals ($5 billion+). Overall, 56 megadeals were announced in the second half of 2020, compared to 27 in the first half of the year.
  • The technology and telecom sub-sectors saw the highest growth in deal volumes and values in the second half of 2020, with technology deal volumes up 34% and values up 118%. Telecom deal volumes were up 15% and values significantly up by almost 300% due to three telecom megadeals.
  • On a regional basis, deal volumes increased by 20% in the Americas, 17% in EMEA and 17% in Asia Pacific between the first and second half of 2020. The Americas saw the biggest growth in deal values of over 200%, primarily due to some significant megadeals in the second half of the year.

COVID-19 accelerates deals activity for digital and technology assets in a highly competitive market

In demand assets have commanded high valuations and fierce competition, driven by macroeconomic factors. These include low interest rates, a desire to acquire innovative, digital or technology-enabled businesses and an abundance of available capital from both corporate (over $7.6 trillion in cash and marketable securities) and private equity buyers ($1.7 trillion).

By comparison, assets in sectors that have been hardest hit by the pandemic like industrial manufacturing or those being shaped by factors such as the transformation to net zero carbon emissions are creating structural changes that companies will need to address. Where the future viability of their business models are challenged, companies may look to distressed M&A opportunities or restructuring to preserve value.

Deal makers widen assessment of value creation to non-traditional sources

Non-traditional sources of value creation such as the impact of environmental, social and governance factors (ESG) are increasingly being considered by deal makers and factored into strategic decision-making and due diligence, as they focus on protecting and maximising returns from high valuations and fierce demand. 

“With so much capital out there, good businesses are commanding high multiples and achieving them. If this continues – and I believe it will – then the need to double down on value creation is now more relevant than ever for successful M&A,” says Malcolm Lloyd, Global Deals Leader, Partner, PwC Spain.

The impact of a hot IPO market on M&A

The last six months saw the prevalence of the use of special-purpose acquisition companies (SPACs) to pool investor capital for acquisition opportunities in a highly active IPO market. In 2020, SPACs raised about $70 billion in capital and accounted for more than half of all US IPOs. Private equity firms have been key players in the recent SPAC boom, finding them a useful alternative source of capital. More SPAC activity is expected in 2021, especially involving assets such as electric vehicle charging infrastructure, power storage, and healthcare technology.

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ILO and LinkedIn launch data insights partnership

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The International Labour Organization (ILO), the Partnership for Action on Green Economy (PAGE)  and LinkedIn have launched a two-year data insights partnership that aims to improve government decision-making, promote green jobs and build the capacities of governments to identify and provide training opportunities.

Through the Memorandum of Understanding (MoU) signed between the ILO and LinkedIn on 15 January 2021, the partners hope to support the development of deep, cross-sector partnerships that benefit governments, the private sector, employers’ and workers’ organizations and civil society organizations. This partnership also supports the achievement of the Sustainable Development Goals (SDGs)  and meeting the unique challenges posed by the COVID-19 pandemic.

LinkedIn’s real-time view into the global labour market will enable partners to leverage its insights into the skills, jobs and occupations that are quickly rising in demand. For example, LinkedIn’s granular, skills-based understanding of green jobs will also detect emerging trends by analysing occupations whose titles may not identify them in a traditional “green” role but are increasingly reliant upon green skills. Complementary LinkedIn data on hiring trends by gender and region will also provide unique insights into the world of work. 

Thanks to its MoU with the ILO, these data can now help inform policy recommendations as well as further research and analysis, with a particular focus on supporting governments to transition to green economies within the context of PAGE’s work on green jobs as well as helping governments and labour market institutions become more responsive to the needs of workers and employers through the promotion of targeted skills training.

The LinkedIn-ILO partnership also welcomes the strategic collaboration of UNEP  and UNITAR , whose complementary mandates and expertise will help translate rich labour related data insights into informed policies and practical capacity building activities.

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