With many local governments overwhelmed and lacking the capacity to deal with the effects of the COVID-19 pandemic, NGOs and social enterprises are stepping in as partners to provide support. These enterprises are playing a key-role in the response efforts and will continue to be important as the pandemic stretches out, with recovery likely to be a long-drawn process experts discussed at an event hosted by the World Bank’s  Global Partnerships for Results-Based Approaches (GPRBA).

“Local governments find themselves in a situation where they have to both do their utmost to contain the spread of the virus and to maintain the running of essential services, oftentimes costing more than regular service delivery because of the precautions that would need to be taken and they are doing that in a situation when their municipal revenues are declining,” said Sameh Wahba, Global Director of the Urban, Disaster Risk Management, Resilience, and Land Global Practice (GPURL) at the World Bank.

“Social enterprises have been in the forefront of the response to COVID-19 in reducing the spread and in minimizing the economic and social impact of the crisis. They are a source of trust for the community; they have raised awareness and shared credible information,” said Elaine Tinsley, Private Sector Specialist at the World Bank.

Isabel Guerrero, Executive Director of IMAGO Global Grassroots, emphasized the huge potential shown by social enterprises and their networks in the COVID-19 response, reaching informal sectors and faraway rural areas, and how this could not be possible without access to finance.

Maitreyi Bordia Das, Practice Manager at the GPURL, highlighted that by supporting social enterprises, we are also supporting the social and economic benefits they bring to the communities they work in. “The GPRBA mandate to target the hardest to reach and poorest areas, allows the Partnership – unlike many other results-based finance programs across the world, to work with smaller and less known entities that may likely be doing very innovative and impactful work,” she added.

“In order to solve some of the social problems we are seeing now, the collaboration between social enterprises, donors, and governments is critical.  Due to its flexibility, and the focus on outcomes, results-based finance can be an incredible tool during crisis response,” said Erin Worsham, Executive Director, CASE Duke University.

IFC and GPRBA have a history of partnership on engaging social impact enterprises to deliver development results, helping both the communities they serve as well as providing the demand for these social enterprises to succeed, said Edgar Saravia, Principal Investment Office at the IFC. “This white paper will be a very useful resource for us at the IFC to leverage social enterprises and results-based financing to expand and increase the impact of some of the work that we do,” he added.

Soma Ghosh Moulik, Practice Manager, Water Global Practice, World Bank, closed the event highlighting how results-based finance can play a key role in de-risking public funds to pay for outcomes delivered by private social enterprises, while still providing financial support for social enterprises to sustain and expand their operations.

Photo: Vincent Tremeau / World Bank

The terms “sustainable” and “inclusive” are being commonly (and often loosely) applied to any positive interventions towards the response and recovery from the pandemic. What does “inclusive recovery” mean? Here we explore a specific type of intervention through social enterprises (SEs) using results-based financing.

Most governments were caught off-guard when the pandemic hit.  They scrambled to do what they thought best—lockdowns, intense controls, among others, because they had no idea what would work. But for the average person in a household or community, life had to go on. People needed food, water, information, health and other services. That’s where communities—neighborhood groups and local organizations—came to the rescue. What we often don’t realize is that many of these organizations are SEs.

As COVID-19 outbreaks have raged across Asia, Africa and beyond, SEs have used their existing capacity, networks and influence to work with disrupted supply chains, assessing demand and connecting households, communities and local governments. Their activities have ranged, including distributing food baskets, face masks and sanitation products, operating community kitchens, and transporting sick people to hospitals. Other examples include setting up handwashing stations in entry points across informal settlements as well as identifying and providing cash transfers to households and informal workers most affected by the economic crisis. 

Take the case of Goonj—a SE based out of Delhi, India, which was very active in relief efforts. By mobilizing its vast network of volunteers and partner organizations, the organization provided food rations and meals to over 200,000 families across India. There are numerous other examples like Goonj emerging from around the world. Tusker—a service by Logistimo that connects rural communities with access to essential products—has secured permission to continue facilitating the delivery of medicines and fast-moving consumer goods in India’s rural areas. Across Ghana and Rwanda, Zipline uses drones to deliver essential medicines and COVID-19 supplies, such as personal protective equipment.

In short, the crisis caused by COVID-19 has thrown the state and markets into disarray, and SEs have stepped in as partners to support communities and local governments. They are effective because of their long-standing experience in delivering community-centered solutions and their ability to direct critical resources to populations disproportionately affected by a crisis. Since they maintain an extensive on-the-ground presence, they can provide much-needed support in hard-to-reach areas.

Aside from providing humanitarian relief, SEs have also illustrated ways in which they can support governments in the delivery of essential services. For instance, Life Bank and MDaas Global have set up multiple COVID-19 testing sites in Nigeria. SEs like Eneza Education and 40K plus provide educational content through text messages for students who may not have access to smartphones and highspeed internet.

SEs have also generated employment opportunities by pivoting to producing face masks and providing services to essential businesses. Their ability to innovate and maximize impact in low-resource environments will prove beneficial in post-pandemic recovery efforts. Initiatives undertaken by SEs during the pandemic have highlighted the essential role they play in tackling development challenges, making them natural partners for governments and donors alike.

In this regard, the Global Partnership for Results-Based Approaches (GPRBA) is uniquely positioned to collaborate with and support SEs. Drawing upon its significant experience of working with SEs and other non-state actors, the partnership has published a white paper explaining how the World Bank can build productive partnerships with SEs for COVID-19 relief efforts by deploying a results-based financing mechanism. The paper provides an operational framework of financing mechanisms that can support SEs in delivering inclusive results—on both prevention and mitigation of the pandemic’s effects. It also highlights metrics that can be used and how results could be verified in the context of limited in-person interactions. 

However, SEs, like most enterprises, are also reeling from the effects of COVID-19. SEs are likely to face greater liquidity challenges and struggle to stay afloat. To ensure that SEs can continue to serve (and employ) poor workers, governments and donors should utilize SE for ongoing relief and mitigation efforts and ensure adequate funding is injected into their operations. At GPRBA, this would be in keeping with the World Bank’s overall response to the pandemic.

(This article originally appeared on the World Bank's website)

Development and aid contracts need to be reformed in the pandemic era to allow for crisis-related contingencies after COVID-19 forced numerous development projects to adopt remote and virtual approaches, experts said at an event co-hosted by Devex and UBS Optimus Foundation.

Maitreyi Bordia Das, Global Programs Manager at the World Bank's Urban, Disaster Risk Management and Land Global Practice (to which GPRBA belongs), joined other panelists from UBS Optimus Foundation, United Nations Children’s Fund, Instiglio, and the U.S. International Development Finance Corporation to reflect on the pressing need to find innovative funding tools that stimulate real impact on the ground both during the pandemic and beyond.

Visit Devex's website for details about the event's discussion and its findings

Results-based financing (RBF) is the idea that financial support should be contingent on achieving predefined, independently verifiable results. RBF, also known as “pay for success” or “performance-based financing,” is a proven tool of international development. Enshrined in the Paris Declaration on Aid Effectiveness, it is considered by many to be a gold standard.

The Global Partnership for Results Based Approaches (GPRBA) is a World Bank program at the forefront of testing RBF approaches that combine transformational funding and technical assistance. GPRBA helps improve delivery of basic services in developing countries by promoting lasting, productive, and efficient development approaches. Supported by co-financing from the public and private sectors, this pioneering partnership provides aid to areas and people who need it most, prioritizing recipients based on socioeconomic status.

Here are a few examples from GPRBA’s diverse portfolio:

• A GBPRA project in Morocco leveraged investments of over $30 million to improve access to safe water supply and sanitation services among poor households on the outskirts of main cities. It was the first RBF project in North Africa and the Middle East, benefiting nearly 20,000 households.

• In Bangladesh, the Output-based aid (OBA) Sanitation Microfinance Program is making hygienic sanitation facilities more affordable for rural, low-income households through microfinance. Working with partners, the $22 million initiative is expected to help build 170,000 hygienic latrines for 850,000 people.

• An innovative microfinance pilot in Kenya is offering incentives for service providers in rural and peri-urban areas to rehabilitate and expand water and sanitation infrastructure. Since its inception, the venture has catalyzed $3.4 million in commercial loans for small piped-water systems, and mobilized equity investments of $1.2 million from the community.

• In Nepal, five municipal areas are transforming their approaches to solid waste management (SWM). A $4.3 million GPRBA mechanism is lowering the cost of improving SWM services and increasing the revenue that cities can collect to offset SWM expenditures.