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• The Need for Social Finance in Central and
  Eastern Europe
• Allan Bussard, Managing Director
• The Integra Venture
• Slovakia

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Integra Venture

• CDFI working in 7 countries of Central and
  Eastern Europe

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Integra Venture

• CDFI working in 7 countries of Central and
  Eastern Europe
• 393 small business clients (28.2.03)

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Integra Venture

• CDFI working in 7 countries of Central and
  Eastern Europe
• 393 small business clients
• Loan portfolio 1.55 million

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Integra Venture

• CDFI working in 7 countries of Central and
  Eastern Europe
• 393 small business clients
• Loan portfolio 1.55 million
• 38 clients initially below poverty line

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Integra Venture

• CDFI working in 7 countries of Central and
  Eastern Europe
• 393 small business clients
• Loan portfolio 1.55 million
• 38 clients initially below poverty line
• 65 of clients have been unemployed
• 63 start up businesses

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Context
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Context

• Poverty

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Context

• Poverty
• Unemployment

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Context

• Poverty
• Unemployment
• Corruption

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Social Purpose Enterprise?An experimental
response
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Social Purpose Enterprise

• Definition
• A for-profit company that has a community or
  social purpose designed into the business plan,
  the operations model, and the investor
  expectations

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Social Purpose Enterprise

• Business as a source of community healing

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Social Purpose Enterprise

• Business as a source of community healing
• A new kind of purpose-built hybrid, using
  business tools to meet social needs.

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Social Purpose Enterprise

• Business as a source of community healing
• A new kind of purpose-built hybrid, using
  business tools to meet social needs.
• Venture capital finance model, seeking high SROI
  and modest ROI

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David Quarry, Krajina, Croatia
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David Quarry - finance

• 35 000 as debt over 5 years
• 12 000 as deferred debt, repayable as balloon in
  5 years

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David Quarry - Social Purpose

• Community reconciliation
• Preferential pricing to building materials for
  returning Serb refugees
• Employ chronically unemployed

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Majak Flour Mill Ltd.Lutsk, Ukraine
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Majak Flour Mill - finance

• 30 000 equity,to be reinvested in the Ukraine
  due to currency risk
• 10 000 debt, repaid

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Majak Flour Mill Social Purpose

• Free flour to families on welfare, in partnership
  with local social services
• Transparent milling process

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Rabbitex Ltd., Slovakia
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Rabbitex Ltd. - finance

• 25 000 equity
• 25 000 debt

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Rabbitex Social Purpose

• Prisoner rehabilitation
• Partner with womens MED program in live rabbit
  export

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OilPartner Ltd., Slovakia
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OilPartner Ltd. - finance

• Joint venture with Canadian corporation
• Canadian partner-
• 50 000 equity
• 55 000 bank guarantee for local loan
• Integra -
• 46 000 equity
• 12 000 loan
• Local bank -80 000 loan as prize for best
  business plan

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OilPartner Social Purpose

• Taking the fear out of auto service
• Drug rehabilitation partnership with social
  services

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SPE and MED
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SPE and MED
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SPE and MED
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SPE and MED
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SPE and MED
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SPE and MED
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Financing SPE Development

• Investor vs donor mindset

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Financing SPE Development

• Investor vs donor mindset
• Venture Philanthropy

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Financing SPE Development

• Investor vs donor mindset
• Venture Philanthropy
• Social Return on Investment (SROI)

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Financing SPE Development

• Investor vs donor mindset
• Venture Philanthropy
• Social Return on Investment (SROI)
• Double bottom line

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Financing SPE Development

• Investor vs donor mindset
• Venture Philanthropy
• Social Return on Investment (SROI)
• Double bottom line
• For-profit form/ non-profit purpose

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SPE Development Strategies

• Develop and deploy codes of ethics

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits
• SPE networking and support groups

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits
• SPE networking and support groups
• Regular consulting

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits
• SPE networking and support groups
• Regular consulting
• Professional support

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits
• SPE networking and support groups
• Regular consulting
• Professional support
• Pool of visionary investors

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SPE Development Strategies

• Develop and deploy codes of ethics
• Systematic social audits
• SPE networking and support groups
• Regular consulting
• Professional support
• Pool of visionary investors
• CSR for SMEs

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Social Investing in Central Europe - the Need

• Finance not available for start-ups

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Social Investing in Central Europe - the Need

• Finance not available for start-ups
• No reliable credit histories

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Social Investing in Central Europe - the Need

• Finance not available for start-ups
• No reliable credit histories
• Virtual absence of venture philanthropy capital

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Social Investing in Central Europe - the Need

• Finance not available for start-ups
• No reliable credit histories
• Virtual absence of venture philanthropy capital
• Gap left by donor departure

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Social Investing in Central Europe - the Need

• Finance not available for start-ups
• No reliable credit histories
• Virtual absence of venture philanthropy capital
• Gap left by donor departure
• MFIs focus on middle class, introduction of
  consumer credit competition

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Social Investing in Central Europe - the Need

• Finance not available for start-ups
• No reliable credit histories
• Virtual absence of venture philanthropy capital
• Gap left by donor departure
• MFIs focus on middle class, introduction of
  consumer credit
• Local debt or equity to NGOs impossible

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