Flexible finance for development: bridging research and practice

BII and PEDL Research conference

A one-day research conference combining the latest academic research with discussion from providers of flexible and risk-bearing finance to SMEs in Africa and Asia.

This event officially kicked off the 3rd edition of the PSDRN Annual Seminar Series (2024-2025).

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Key event information

Date: Friday 27 September 2024

Time: 8:15am – 5:00pm BST (Online event starts at 9:00am)

Venue: BII’s London office and online

Organizers: British International Investment (BII) and Private Enterprise Development in Low-Income Countries Initiative (PEDL)

Overview

The growth of more productive and sustainable firms is at the heart of development finance and impact investing. However, traditional lending with short-term and inflexible payment schedules, is not always well-suited to financing the growth of these businesses. And when firm owners’ livelihoods are dependent on their business, the rewards of growth may not be enough to put the business at risk by taking on inflexible debts.

Economists increasingly recognize the need for the development of more flexible forms of finance, which can absorb some of the risks that entrepreneurs face. The financial industry has long supplied forms of risk-bearing capital, of which venture capital is perhaps the best-known example. But these products have historically only been available to larger firms in high-income countries and are rarely offered in lower income countries. That is now changing.

This conference will bring together cutting-edge research about the impact of flexible finance in Africa and Asia, with the investors and companies that are supplying it. Our goal is to not only understand the positive impacts of flexible finance, but also explore how it can be delivered at scale in a commercially sustainable way.

Detailed Agenda Below – (may be subject to change)

8:15 – 9:00     Registration and light breakfast

9:00 – 9:15      Welcome remarks

• Paddy Carter, Head of Development Economics, British International Investment

9:15 – 10:00    Collateral-based lending

• Paul J. Gertler, Professor of Economics, University of California, Berkeley Haas

Research: Digital collateral and/or The Welfare Benefits of PAYGO

• Practitioner discussants: PayGo Labs and Geoff Manley, Head of Energy Access and Efficiency, British International Investment

10:00 – 11:30 Risk-bearing capital

10:00-10:40

• Rowan Clarke, PHD Candidate – strategy, entrepreneurship and AI for Development, Harvard Business School
• Practitioner discussant

10:40-11:30

• Emanuele Colonnelli, Professor of Finance and Entrepreneurship, University of Chicago Booth School of Business

Research: Paper in progress

• Muhammad Meki, Associate Professor – International Development, University of Oxford

Research: Small firm investment – role of equity.  Revenue Based Financing

• Practitioner discussant

11:30 – 11:45 Break

11:45 – 1:00    Flexible repayments

• Giorgia Barboni, Assistant Professor of Finance, University of Warwick

Research: Innovations in repayment structures in MFI contracts.

• Francesco Loiacono, Principal Research Economist, EBRD

Research: Ugandan flexible terms experiment. Paper in progress

• Practitioner discussant

1:00 – 1:45     Lunch

1:45 – 2:45      Policy panel – Flexible finance for larger firms: the challenges of scaling-up

• Maria Smith, Chief Impact Officer, British International Investment
• Nikolay Angelov, Associate Director, SME Finance and Development, EBRD
• Benedicta Wontumi, Head of Credit Risk, Growth Investment Partners – Ghana
• Barthout van Slingelandt, Managing Partner, XSML

2:45 – 3:15     Break

3:15 – 4:30      Psychometric testing for lending decisions

• Rachel Cassidy, Economist, International Finance Corporation

Research: Evening the credit score.

• Gharad Bryan, Associate Professor of Economics, London School of Economics

Research: Big loans to small businesses

• Practitioner discussant

4:30 – 5:00     Closing remarks

• Chris Woodruff, Non-executive Director, British International Investment, Professor of Development Economics, University of Oxford and Scientific Coordinator, PEDL