Funding: Securing Financing and Investment

Background

Access to finance and investment is not just a necessity for SIDS to foster economic growth, but it also serves as a lifeline for their continued sustainable development. Despite being hit hard by climate change while only contributing to 1% of global carbon dioxide emissions, they only had access to $1.5 billion out of $100 billion in climate finance pledged to developing countries in 20191 . From economic diversification to local empowerment and green transition, strategic investments are crucial for implementing the new SIDS agenda. The session will explore access to finance and investment with one panel for each theme. The session takes a practical approach with do’s and don'ts on how to enhance access to finance and attract investment.

Access to the concept note

Panel Discussion 1: Finance

The panel is composed of business leaders working towards improving access to finance for individuals, communities, and enterprises. The panel will focus its discussions on three areas:

• The present: Identifying the microeconomic challenges and structural barriers faced by Micro Small and Medium Sized Enterprises (MSMEs) in building credit history and accessing finance as well as understanding how the private sector is leveraging technology – often “mobile first” - to develop innovative solutions that address these issues.

• The future: The panel will also discuss concrete ways in which public and private sector partners could join forces to develop bottom-up private-sector focused development mechanisms capable of channeling funds for productive, inclusive, and environmentally sustainable, projects by MSMEs.

• Finally, the panel will discuss the role of the international community, and specifically of international development agencies, in supporting access to finance for MSMEs, including through a “funds of funds” approach. This approach involves pooling capital from various investors and then investing that capital in multiple smaller MSME-focused funds.

Panel Discussion 2: Investment

This panel will be primarily comprised of key stakeholders in the investment space both in the areas of attracting foreign direct investments as well as angel and equity financing for MSMEs. The discussion will hear from speakers on:

• How to make MSMEs across the SIDS aware of the importance of equity financing as a viable option to their development.

• Strategies for attracting FDI into transformational sectors with SIDS to build their economic resilience.

• Barriers to attracting investments and how can these be overcome.

• How international development agencies, national governments and the private sector collaborate to ensure that investments in MSMEs and transformational sectors are realized. 

Format

The session will comprise a panel discussion in the form of a moderated conversation. This will be followed by an open discussion where all participants are invited to engage.

Expected Outcomes

• Recognition of the situation of financing and investment in SIDS including market opportunities and barriers.

• Understanding of investor and financer hesitations.

• Sharing of actionable strategies to overcome challenges and risks for financing and investment, including through partnerships.

• Insights into effective measures that SIDS governments and investment promotion agencies can take to pave the way for increased access to finance and investment.

Partners

The session is co-created with the Caribbean Export Development Agency (CEDA), the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and the International Trade Centre (ITC)