How we work
The Financing Innovation Tool (FIT) offers a broad range of tailored and flexible financing instruments, including debt, subordinated debt, equity and guarantees. These diverse options will enable FIT to invest into innovative enterprises with a strong social mission societal impact companies at different stages of development, depending on their risk-return profile, size, scale, management structure and financial skills.
Funding requirements
FIT supports organisations that stimulate independent economic activities, foster a spirit of innovative, social entrepreneurship and create sustainable employment opportunities in developing countries. This is in line with ADA’s goal of strengthening the autonomy of vulnerable people by leveraging inclusive finance to improve their living conditions.
Organisations must meet the following requirements to qualify for FIT funding:
Type of organisations
Micro and small enterprises (MSEs), incubators, accelerators, fintech companies, training centres, basic service providers and digital solution providers
Supported activities
Strengthening agricultural and forestry value chains, providing business support for young entrepreneurs and facilitating access to basic services
Innovation
Innovative business model in terms of products or targeted clients
Existing partner
Already participated in one of ADA’s programmes in the past
Social mission
Create economic opportunities for and improve the quality of life of vulnerable people
Alignment with ADA
Comply with at least one of ADA’s strategic priorities of promoting digital and environmentally sustainable technologies, mitigating the effects of climate change and ensuring an equal participation of women in the economy
Innovation as a key funding requirement
To qualify for funding from the Financial Innovation Tool, investees must show some form of innovation and sense of initiative. For example, they can serve previously marginalised groups, be the first local provider of certain services, have an unusually high level of digitalisation and innovation for an entity of their size or invent a completely new product or service.
Investees must meet at least one of these innovation criteria:
Innovative access
Traditional products and services for excluded and marginalised people. This first-time access represents an innovation for these clients
Product innovation
New, innovative products or services compared to competitors
Innovation as an organisational value
An unusually high commitment to innovation relative to the organisation’s size and stage of development
Sector/market innovation
Innovative products or services compared to global market standards.
FIT helps to transform these innovative ideas into impactful development solutions that create opportunities for growth and improve the quality of life of vulnerable people. For example, FIT can help innovative, early-stage businesses to introduce new products and expand into new markets.
FIT will build on ADA’s longstanding experience in helping entrepreneurs in developing countries to identify promising and innovative companies for its investment pipeline. This will ensure the development of an investment portfolio with a strong focus on innovation and impact.
The FIT investment process
Market analysis and referencing
Desk analysis + Preselection
Due Diligence
Social and environmental impact indicators
Investment recommendation
In-depth KYC and AML screening
Investment approval
Financial Documents
Fund disbursement
Continuing monitoring and support
ADA’s technical assistance complements FIT funding
FIT investees will benefit from ADA’s longstanding expertise in providing both once-off and integrated technical assistance. Once-off assistance can take the form of training, ratings, financial audits, social performance assessments or specific projects such as developing news products, digitalising internal processes or updating the customer protection policy. This once-off assistance can be tailored to an investee’s current needs in a highly flexible manner and is provided by specialised consultants.
ADA’s team also offers more comprehensive, multiannual technical assistance based on a thorough analysis of investees’ needs in the long term. For example, this can consist of strengthening internal management, increasing operational efficiency or supporting their digital transformation and strategic planning.
FIT investees enjoy privileged access to ADA’s network of local and international partners and ADA can act as a facilitator to unlock further sources of funding or to help find the perfect service provider or business partner.