Our Investment Principles
Private sector demand-driven: The AECF is demand-driven, and harnesses private sector initiative and implementation capacity to achieve pro-poor economic and social outcomes. It does not undertake research, nor implement projects in its own right. However, to enable its portfolio increase their level of impact, where appropriate facilitate access to technical assistance;
High Impact Models: AECF-funded projects must illustrate that they are high social impact on key impact metrics;
Systemic Change: AECF-funded projects must illustrate the potential for pro-poor economic and social impact beyond their immediate project impact and which will change the way the market works;
Address Market Failure: The AECF funds projects constrained by market failure for access to finance, within the context of the specific markets within which they are to be implemented as well as in fragile contexts;
Risk sharing: The AECF shares risk with private firms. The underlying principle is that AECF funds recipients that are more at risk in the proposed project than the AECF. For practical purposes, recipient companies make matching contributions to the projects/businesses funded by the AECF as this maximises resource mobilisation and applicant commitment to successful implementation;
Competition: AECF investments (non-reimbursable grants and reimbursable grants) are put in the public domain to ensure that all eligible organisations have equal opportunity to compete for the available funds. Applicant firms compete for funding in multiple funding rounds, against fixed deadlines. Funding is approved and allocated by the independent AECF Investment Committee;
Portfolio approach: The AECF seeks to build a portfolio of investments that is diversified in terms of risk, geographical\distribution, sector distribution, and economic, social and market impact;
Rural poor and fragile communities as beneficiaries: The primary focus of the AECF is the rural poor and fragile communities. All projects supported by the AECF must show large, direct benefits for the rural poor. Projects that benefit the urban poor may be funded provided they align with the objectives of the program.
Additionality: AECF-funded projects seek to create social and economic benefits that would not have been attained without this funding support.
Do No Harm: AECF-funded projects must take into consideration potential conflict and risk drivers with the intention of minimizing potential project harm and avoiding negative impacts on social, economic and on the environment.
Gender and Social Inclusion: AECF funded projects should seek to address challenges and provide opportunities for women and youth in access to finance and employment.
Business Sustainability: AECF funded projects should demonstrate innovation and potential for sustainability.