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 in innovative organisations with a strong social mission at different stages of development, depending on their risk-return profile, size, scale, management structure and financial skills.
All investees have been previously vetted by ADA through direct or indirect collaboration. The success of the investment is measured in terms of its social impact which is monitored in line with key performance indicators and the United Nations’ Sustainable Development Goals.
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 entrepreneurs and facilitating access to basic services
Innovation
Innovative business model in terms of products or targeted clients
Existing partner
Already directly or indirectly involved 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
To qualify for funding from the Financial Innovation Tool, investees must demonstrate some form of innovation and sense of initiative. For example, they can serve previously marginalised groups, be the first local provider of certain services 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
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 develop an investment portfolio with a strong focus on innovation and impact.
Market analysis and referencing
A potential investee is identified based on ADA's market intelligence, technical assistance programme referrals or ADA’s investment advice activities for LMDF
Desk analysis and preselection
An ADA Investment Advisor analyses the candidate and presents their findings to the Pre-selection Committee
Due diligence
A full due diligence analysis including a field visit is carried out
Social and environmental impact indicators
Identifying and setting targets for social impact indicators in collaboration with the investee, which will be the guiding principles throughout the investment cycle
Investment recommendation
As part of the Funding Committee, independent experts from various sectors examine the proposal and make their recommendations based on strict social and financial criteria
In-depth KYC and AML screening
The FIT team carries out in-depth KYC and AML screening
Investment approval
The FIT Management Board approves the investment following a positive appraisal by the Funding Committee
Financial documents
Drafting and signing of financial documents by both parties
Fund disbursement
FIT disburses the funds to the investee
Continued monitoring and support
ADA’s Investment Advisor monitors and supports the investees throughout the investment cycle