At what point should grant funding be replaced by more commercial forms of funding such as debt or equity? The question is at the heart of a challenge facing many fledgling development organizations. Read MicroEnsure founder Richard Leftley’s exclusive guest opinion, or check out this excerpt:
Four years ago, we set up MicroEnsure with a grant from the Bill & Melinda Gates Foundation. Our aim was to serve a large number of people with a range of affordable and relevant insurance products. Today we are serving in excess of 3.1 million people whilst growing in excess of 200,000 new clients per month. By the end of 2012, we should be approaching 10 million active clients being provided with a safety net that stops the poor from falling back into poverty when disaster strikes.
MicroEnsure is entering that difficult stage in its development where the grant funds are coming to an end and donors are rightly asking whether more grants are really needed for an organization serving millions of clients. And yet, it is still early to demonstrate to potential investors that it’s a sound investment that will offer a compelling return.
Our approach to this conundrum has been to contemplate separating our operations into those that have been proven and are rapidly scaling up and those, such as the development of health insurance in Africa, which are still at an early stage.
Read Richard Leftley’s full op-ed, brought to you by Devex in partnership with the United Nations Foundation.