With access to finance a longstanding barrier to cooperative growth, an update on the new Global Cooperative Impact (GCI) Fund was given at the World Cooperative Congress.
The GCI Fund is an answer to the pressing need of the movement to attract funds or access loans to enable growth. It will answer those needs by providing finance for long-term necessities to sustain cooperative development.
Sponsored by cooperatives, for cooperatives, the GCI Fund will promote their values and identity, becoming a cooperative vehicle “from A to Z”. “We want – at every moment, at every stage of the development and implementation of the fund – to be true to the cooperative DNA,” said Bruno Dunkel, Director at Inpulse Investment Manager, a specialised impact fund manager which is rooted in the cooperative movement, which has been working with the ICA to develop the new scheme.
The GCI aims to provide a holistic answer to the cooperative challenges and offer a tool to achieve the 2030 Vision for cooperatives. In addition to meeting the need for long-term finance, the fund will build management capacity via technical assistance. Indeed, making cooperatives investment-ready is a key success for the sector’s sustainability, bringing leverage for cooperatives looking to access other local and international lenders.
The team has already developed “a full set of key documents that will represent the basis on which to build the Fund”. These documents include national case studies, terms of reference of the fund and an investment strategy.
Moreover, because of its DNA, the support of the cooperative movement in developing the Fund has been crucial. Thus, preliminary preparatory work included four regional workshops, with around 20 organisations involved, to determine the main features of the fund and ensure it fits the needs of the movement.
Instruments are being put in place to measure the impact of the fund against predetermined targets, including the UN Sustainable Development Goals, with an emphasis on reducing gender inequalities and tackling climate change. “We do believe that cooperatives can make very valuable contributions,” said Mr Dunkel. Social impact studies will be prepared, he said, because “it’s very important to show and disseminate the impact we are creating – not just through the fund, but the whole sector”.
The development of the GCI Fund has been supported by the Framework Partnership Agreement (#coops4dev🌏) signed between the ICA and the European Commission. The Partnership sought to strengthen the cooperative movement and its capacity to foster international development, through policy, knowledge building and sharing, networking, and visibility actions.
“The next step will be to secure an anchor investor, and start the fundraising,” said Mr Dunkel. “We are having high interest from different development finance institutions and international institutions, and need to secure the one which will anchor this fund, for example the European Commission.
“It could take another year before the fund is up and running. We hope next time to be showing you what the first investments of the fund will be.”