FAST Forward: Building Sustainable Supply Chain Finance through Market Transparency

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FAST Forward Building Sustainable Supply Chain
Finance through Market Transparency

• Jason Potts
• Finance Alliance for Sustainable Trade (FAST)

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Outline

1. Context and Consultation
2. Mission, Objectives and Activities
3. Field Information Services
4. Market Information Services
5. Member Networking Service
6. Implementation
7. Strategic Questions

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Sustainable Supply Chain Finance Opportunity
Contract Based- Lending Buyer (1) Places order
with Producer Org and/.or provides quality
assurance Lender (2) Provides credit based on
order volume and value Producer (3) Delivers
coffee to Buyer Buyer (4) Pays full value to
lender Lender (5) Pays order value minus loan
amount and interest to Producer Org
Certifier

• Certifier
• Sets, verifies and communicates good management
  practices
• Facilitates access to market

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FAST Strategic Planning Process

• Consultation with Members
• Draft Business Plan
• Board Review and Restructuring
• Validation and Vetting
• Full Implementation

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Strategic Planning Process Content Developments
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Vision and Mission

• Objective To promote sustainable economic
  development by improving efficiency and
  transparency in financial markets for sustainable
  SMEs in emerging economies.
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• Vision FAST is the global reference for data on
  sustainable SME finance and related markets.
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• Mission The Finance Alliance for Sustainable
  Trade facilitates efficiency, transparency and
  stability in financial markets for sustainable
  SMEs by providing objective data while developing
  and promoting reporting and quality standards.
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• All FAST activities under the new business plan
  contribute to building the evidence base related
  to investment in sustainable supply chains with a
  primary focus on sustainable SMEs in agricultural
  supply chains.

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FAST Information Services

• Field Information Services
• Impact Data
• SME Investment Opportunities Data
• Field Info Capacity Building Servicres
• Market Information Services
• Sustainable Product Data
• Financial Markets Data

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Field Info Shared Impact Data

• A data collection and management system for SME
  impact data. Built in partnership with IRIS.
  Facilitates collection and reporting of impact
  data directly from SMEs.
• Data comes from investors, financial institutions
  and SMEs
• Core deliverables
• Design and deployment of Shared Impact database
• Maintenance and improvement of platform
• Annual shared impact report
• Customized benchmarking reports

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Field Info SME Investment Opportunity Data

• A data repository of SMEs seeking finance ranging
  from basic financial statistics, demand for
  finance and any user submitted ratings
• Data sourced directly from SMEs via Financial
  Fairs or from partner technical assistance
  agencies or other data collectors (eg. Cropster)
• Core deliverables
• Design and launch of SME Investment Opportunity
  database
• Preparation of 400 quality new SME online
  profiles
• Negotiation of data alliance with major supply
  chain initiatives covering more than 50 of
  sustainable SMEs

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Field Info Capacity Building Services

• A series of activities providing quality control
  and training for third parties to collect field
  level data for FAST
• Data sourced from third parties conducting FAST
  financial fairs, technical assistance agencies
  and SMEs directly.
• Core deliverables
• Training sessions for financial institutions,
  SMEs and technical assistance bodies
• 12 FAST Certified Financial Fairs (organized by
  third parties)
• Facilitation services for technical assistance
  fund
• Financial literacy training tools
• Impact Assessment Guidance

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Field Info Information SErvices
SME Data What FAST Does and Does Not Do SME Data What FAST Does and Does Not Do
Does Does Not
a. Develops Field Info Data Portal a. Guarantee data quality
b. Sets standards for SME impact and financial data b. Formally rank lenders, SMEs or individual sustainability initiatives (based on impacts or financial profiles)
c. Solicits and performs quality checks on data from SMEs c. Guarantee access to deals
d. Disseminates data in the form of queries and reports d. Conduct field level impact analysis
e. Provides guidance and training on filing data e. Determine eligibility requiremernts for finance
f. Provides guidance on conducting impact analysis f. Provide direct SME training
g. Facilitates location of funding to gather SME level data g. Directly OrganizeMatchmaking events
h. Provides guidance on technical assistance necessary (possibly to donors, TA bodies or members)
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Market Info Product Market Data

• A data collection, reporting and analysis service
  on products certified as sustainable by globally
  recognized certification organizations
• Data sourced from standards bodies, companies,
  secondary research and SMEs directly
• Core deliverables
• Design and deployment of product market database
• Annual global product markets review (The State
  of Sustainability Initiatives)
• 13 national product reviews

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Market info Financial Market Data

• Data and reporting service on market conditions,
  performance and trends for sustainable supply
  chain finance
• Data sourced from financial service providers,
  other industry data houses and FAST other data
  services
• Core deliverables
• Design and implementation of financial markets
  data collection and reporting system
• Sustainable supply chain finance market trends
  and performance annual report
• Sustainable supply chain risk management
  quarterly newsletter
• Risk profile research

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Market Information Services
Market Information SErvices What FAST Does and Does Not Do Market Information SErvices What FAST Does and Does Not Do
Does Does Not
a. Develops Market Info Portal a. Guarantee data quality
b. Set standards for market data collection b. Rank of promote individual sustainability initiatives or financial service providers
c. Solicits data and performs data quality control from secondary literature and third parties c. Provide guidance on providing market data
d. Disseminates data in the form of queries and reports

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Member NETWORKING Activities

• FAST communications with members will be
  significantly strengthened with a focus on using
  communication to identify shared reporting and
  data indicators, data sharing tools but also to
  build consensus on quality standards as
  appropriate.
• Core deliverable
• FAST lenders lab
• Data sharing platform for members
• Lenders meetings and forums
• Special member communications projects including
  standards development discussions

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Implementation Fitting the Pieces together

• Individual Field and Market Information Services
  will be designed and implemented as a single
  vision and infrastructure that ensure maximum
  synergies and efficiencies between the individual
  products.

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Implementation Strategy
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Fitting the Organizations Together

• Big tent for SME Development Finance
• Dialogue
• Networking
• Strategic Planning
• Research
• Membership Impact investors and all stakeholders
  in impact investing and SE development

• Impact Investment (SME and beyond)
• Strategic Dialogue
• Impact Standards
• Membership Impact Investors

• Leadership group for smallholder agricultural
  finance
• Strategic Dialogue
• Standards and Best Practice
• Membership Social Lenders serving Ag Finance to
  Smallholders

• Microfinance Market Information Hub
• Market and performance data for microfinance
  sector
• Standards for reporting
• Membership no membership structure

• Sustainable SME Finance (Ag Focus) Market
  Information Hub
• Market and performance data
• Standards for reporting
• Standards for matchmaking
• Standards for best practice
• Membership Social Lenders, Impact Investors and
  Socially Oriented Financial Institutions

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Implementation FAST Membership Strategy

• Current Membership 142 total
• 16 Full Member Lenders
• 13 NGO Associate Members
• 113 Producer Associate Members
• Board
• 8 Full Member Lenders (75) 4 Associate Members
  (25)

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New Membership Structure?

• Proposal To strategically bring in a broader
  membership base of financial institutions
  (investors, banks etc)
• Challenge 1 current members cannot contribute
  significantly to operating costs
• Challenge 2 limited number of social lenders
  limits the ability for continuity and growth.
• Challenge 3 new entrants moving into market
  without sufficient guidance/leadership (Risk
  Factor)

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Implementation Executive and Staffing Strategy
Data Collection Services
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Thank You! Think Sustainably Act
FAST www.fastinternational.org