With the Innovations Against Poverty Fund in full swing, IBA checked in with two of IAP’s global evaluators, Geertje Otten from SNV and Mike Debelak from Inclusive Business Sweden. Read more to get their thoughts on what makes for a successful IAP application.
What differentiates IAP from other Funds?
Mike: IAP seeks to provide end-to-end support for new innovations in low-income markets – not just through funding, but with local support and technical advice, and through to helping investees become investment ready and finally connecting with investors who can support the scaling of the initiative in the longer-term.
In IAP, there is a strong focus on innovation. How do you define what is innovative in your evaluation?
Mike: Innovation is about finding a new way to meet a need and address poverty in the local market – in a way that is more effective, impactful and valuable than the status quo. Innovation is not just about the product, but about delivering a new and effective end-to-end business model for addressing the challenge of poverty.
Geertje: Together with our local teams we evaluate whether the proposed concept already exists in the local market (eligible IAP country) or not. Are there other similar products or business models in the local context? Furthermore, we look at the level of innovation of the idea in the local context. The higher level (‘disruptive’) of innovation, the higher score it gets. Finally, our question is whether the innovation is critical for the success of the proposed inclusive business idea.
Impact is also an important consideration. How do you measure the level of impact of ventures applying to the Fund?
Geertje; We look at the number of LIP (low income people) reached by the proposed project: either LIP as employees (number of jobs), LIP as producer or distributor with increased income or LIP as consumers/beneficiaries with access to basic goods and services. Furthermore, we take into account the percentage of women involved and whether there is a focus on working with young LIP. In first instance we only look at the social impact of the proposed project, but of course there is a relation with scale potential and whether more LIP can be reached after the project closure when scaling the concept to other places, markets etc.
Mike: For impact, I try and consider both breadth and depth. By breath, I mean how many low-income people are helped by the initiative. For depth, I look at the extent to which each person benefits from the initiative. Initiatives that will help really transform lives of many people have the greatest positive impact.
From you current experience evaluating IAP applications, what is the most common mistake that applicants make in their application?
Geertje: We are really looking for combined factors of innovation, viability, social impact and scale potential. What I see from many applications is that one or two of these fields are well described, well others do not become clear from the concept notes. Another recommendation is to explain more on the “HOW” of your proposed concept. So, how are you going to reach women (not only how many and why), or how will your business idea becomes a sustainable business idea also after IAP support, or how are you going to mitigate certain risks etc.
Mike: As an average, applications have “scored” lowest against the innovation criteria. Applicants should be careful to consider how greatly their whole business model is different from existing solutions. Applicants should aim to be clear on how their initiative is not just incrementally innovative, but can transform the way things are done for large-scale impact.
Any further thoughts on IAP in general?
Geertje: IAP offers a great opportunity for social entrepreneurs active in the 4 IAP countries. Our ambition is to specifically focus on supporting those innovative inclusive business concepts that can bring high to very high scale and reach high numbers of low income people as suppliers, distributors employees and or consumers.