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Transforming Development Through Innovation And Partnership

USAID is unlocking opportunities to leverage finance and technology for greater development impact.

The United States peer-to-peer relationship with India has grown from a traditional donor-recipient model to a strategic partnership that mobilizes resources and solutions from a broad range of new development actors. Building on India’s talent for innovation, a vibrant private sector, and engaged diaspora, USAID is unlocking opportunities to leverage finance and technology for greater development impact. This will ensure that India can take ownership of its own development solutions and accelerate its journey to self-reliance.  

USAID acts as a thought-leader and catalyst to convene private sector and the Government of India by acting as an ‘honest broker’ to create collaborative platforms. USAID is able to build multi-stakeholder alliances that attract a broad range of private and public partners, and this can apply a substantial multiplier effect to USAID’s initial, often small, financial contribution. 

USAID/INDIA's PRIORITIES

ENGAGING THE PRIVATE SECTOR: USAID works collaboratively with a wide range of new private partners to leverage resources to scale-up solutions for national and global impact. Our partners include American companies, Indian corporations, family foundations, educational institutions, impact investors, venture capitalists, think tanks, chambers of commerce, diaspora groups, and celebrities. The combination of USAID’s experience and resources and the technological and financial innovation of the private sector are creating exciting new approaches to the most intractable development challenges.

LEVERAGING BLENDED FINANCE: USAID has a wealth of experience in leveraging private capital through traditional funding mechanisms. With the increasing focus on enterprise-led development, opportunities are opening up to collaborate with new partners to create new financial mechanisms to entice investment and build on USAID’s activities to accelerate sustainability. Among the innovations that USAID is using are development impact bonds, venture grants, and first- loss guarantees. Recently, USAID launched Utkrisht Development Impact Bond — the world's first development impact bond targeting maternal and newborn health. The financial instrument is specifically designed to incentivize private sector health care partners to reduce the number of maternal and newborn deaths in India's Rajasthan State.

TESTING AND SCALING INNOVATION: With an ability to accept greater risk than the Government of India, USAID pilots solutions to Indian and global development challenges through support for social entrepreneurs, innovative products, and a range of business models and processes. By sharing the results, these pilots are then scaled up by the Government of India and private partners, thus maximizing the impact of USAID’s initial investment.

MOBILIZING DIASPORA RESOURCES: An estimated 3.2 million Indian Americans live in the United States. As entrepreneurs, innovators, and philanthropists, Indian Americans are uniquely positioned to partner with USAID for greater development impact. Commitment to their country of ancestry suggests that diaspora engagement will likely endure beyond collaboration with USAID. USAID engages with diaspora leaders for their important role in impactful development initiatives to leverage philanthropic funds, grant capital, debt and equity resources, business networks, market linkages, and mentorship for social entrepreneurs. In India, USAID serves as a leader on diaspora engagement and shares lessons learned with bilateral donors, the Government of India and other USAID Missions.

MOBILIZING DOMESTIC RESOURCES: USAID provides financial risk sharing through loan guarantees to promote access to credit for small and medium enterprises to scale operations for improved delivery of social services. Through our credit guarantee portfolio, we have already catalyzed over $200 million in private capital to companies in the health, water and sanitation, forestry, clean energy, and agriculture sectors across India. These loan guarantees not only provide the funds needed to tackle development challenges, but are a critical step on the path to self-reliance. For example, USAID and Caspian Impact Investments are partnering to make local financing available to small and medium private enterprises and microfinance institutions, engaged in agriculture, water and sanitation, healthcare, clean energy, education among other sectors.  The loan guarantee will encourage high potential social enterprises to scale and further promote the delivery of social services across India.

Achievements

  • USAID has established 34 private sector partnerships that have leveraged $380 million in additional financial resources.
  • USAID/India’s Millennium Alliance Initiative, an innovation incubator and investment organization, had leveraged an initial $7 million in 2012 to $25 million in 2018, supporting more than 150 promising innovators. USAID was one of three founding partners; there are now eight partners.

 

Last updated: July 23, 2019

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