Testing novel approaches to brokering impact investment

Frontier Brokers supports four lighthouse models that are testing ways to better meet social enterprises' capital needs. These initiatives have intentionally applied a gender lens to ensure gender equality and empowerment outcomes for target communities. DFAT also supports the Frontier Brokers through a Brokers Network mechanism to promote collaboration and knowledge sharing.

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Innovative Approaches

Innovative approaches to forming partnerships, learning and iterating based on lessons from implementation and market needs, and co-creation in both procurement and implementation have been core features of this component.

  • Co-Creation
  • Collaborative Partnering
  • Adaptive Management

Outcomes Achieved

Asia Pacific Notes Series, BIDUK, Equity@Scale, and Impact Connect all have been launched. They were selected through DFAT’s first procurement that applied co-creation from among 40 expressions of interest received and 13 final proposal from 25 co-creation participants.

  • FOUR
    FOUR lighthouse models for brokering capital developed
  • 554
    554 stakeholders trained in gender lens investing
  • 73
    73 Participants convened 2 Brokers Network meetings and 1 Ecosystem Engagement Event
  • 30
    30 promotional items developed and disseminated

Development Impact Data

Frontier Brokers launched in 2019, and development impact data will be available in 2021.

Key Takeaways

Interested in learning more about Frontier Brokers? For more information check out Frontier Brokers. The Frontier Brokers Interim Results and Learning report is forthcoming in March 2021.

  • Co-Creation is an efficient procurement approach to facilitate collaboration across public, private, and civil society and contributes to interventions that are coherent with the existing ecosystem. DFAT should consider

    • Using co-creation when designing any program where solutions are unknown, or when existing expertise is being sought from a diverse range of ecosystem players and
    • Training more DFAT staff in procurement that leverages Co-Creation would be beneficial to ensure that this approach can be adopted more widely.
  • Leaving room for adaptive management is essential to allow the opportunity to learn quickly and iterate to help ensure the impact of promising innovations.

    • This approach, combined with flexible funding, has allowed Brokers to have the time and space to learn from implementation and market feedback and to iterate on initial project plans.
  • Applying a gender lens is critical to ensuring the ‘effectiveness’ of brokering approaches and promoting inclusive innovation in order to meet the needs of the poor, vulnerable, and marginalised.

    To ensure a gender lens is applied to future DFAT programs, it is necessary to

    • Research the best way to communicate gender inclusivity with the target market.
    • Apply a common framework for measurement and learning, which will help DFAT capture more specific results across each project as well as enable aggregation of results across the portfolio.
  • Effective and efficient brokering requires partnerships with local ecosystem players. They

    • Are essential to identify locally-driven solutions and ensure alignment with local market needs.
    • Help with building a pipeline of investable social enterprises and developing a reputation as a credible investor among investees in any particular market.
  • Technical assistance is needed for investments to be effective, and DFAT should consider

    • Including it in projects or
    • Helping to ensure collaboration across the ecosystem with other donors and/or providers of technical assistance.