Suggestions
John Min
Highlights
I recently attended AFIFORUM - Asia Financial Institutions Forum 2024 in Bangkok, Thailand to engage thought leaders and practitioners in frontier development economics (in addition to watching friends like Sonika Manandhar crush conference panels).
The preeminent topic of discussion: local currency financing. Here were some of my highlights and key takeaways:
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To paraphrase Sedef Gunsur from IFC - International Finance Corporation, we have done a pretty good job of scaling from millions to billions. However, a new paradigm is needed to scale billions to trillions to hit SDG goals and navigate the post-COVID macro environment.
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Blended finance is incredibly useful and impactful. It is inspiring to hear Eigo Azukizawa from Japan International Cooperation Agency (JICA) articulate the central facilitator role that DFIs assume in the ecosystem. However, blended finance shouldn't be a requirement. It is neither replicable nor scalable. And it is clear that we need more solutions that can scale local currency financing that enable local operators to affordably execute projects.
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Nepal was a hot topic this year. The country needs $46 billion in local currency bonds to meet the SDGs. But, FX costs can be high, adding 3-4%, and Tim Gocher OBE DL, private equity pioneer of Dolma Impact Fund, exclaims that "Nepal needs a sovereign credit rating."
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For trailblazer Joost Zuidberg of Cardano Development, managing FX / currency risk has, alas, come to the forefront of discussion. TCX plays a pivotal role in absorbing the currency risk of loans provided by development finance investors worldwide.
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GuarantCo's flexible credit guarantee solutions in local currency are invaluable in the creation of investable assets and capacity building for long-term infrastructure projects, particularly, in challenging and volatile markets like Pakistan. Nishant Kumar is as compelling and convincing as GuarantCo's impact and solutioning itself. Credit guarantees are here to say, he says, and he implores the audience to build more organizations alongside GuarantCo.
The most rewarding part of this conference was to hear investors and operators unite and celebrate in success stories. Here were the ones that I found remarkable and noteworthy.
- Maheen Rahman, CEO of Infra Zamin Pakistan, celebrated the AAA / A1+ rated and fully guaranteed $2.5B PKR (approx. $8.7M USD) gender bond to finance women-led small businesses and micro-infrastructure projects.
- Impact Investment Exchange (IIX)s Orange Bond initiative seeks $10B USD by 2030 to mobilize a gender-empowered financing system.
- Bao Dinh of EVN Finance highlighted Vietnam's first internationally certified green-bond of $75M USD (equivalent in VND).
- Sheng Yang from Zuoli Kechuang Micro-finance Co Ltd and Wang Xingzui of Chongho Bridge Group are seasoned veterans of Chinese rural microfinance who demonstrate that lasting financial solutions can be built to "serve the last hectometer".
I am so thankful and proud to be part of the Pngme (We're Hiring) team as we embark on an extraordinary journey to create and deliver meaningful impact for African financial institutions and consumers! #africa #fintech #financialinclusion
