Progress

Report 2013

Photo James Rexroad/Building Markets

JUNE 2013 PROGRESS REPORT LETTER FROM OUR CEO

Dear Stakeholders, SCOTT GILMORE Founder, CEO Thank you for your support. You have allowed us to achieve more than we ever anticipated. To date, we have been able to leverage $34 million in funding to help channel over $1.2 billion of new spending into some of the worlds poorest economies. This has created over 65,000 jobs, and changed many more lives. Over the next 4 years, we hope to double these numbers. At Building Markets, we believe the greatest goal this generation can achieve is an end to extreme poverty. The only sustainable solution to poverty is jobs, and jobs are created by local entrepreneurs. The barriers facing these entrepreneurs are many, but they are not insurmountable. The best way for us to help entrepreneurs is to connect them to new opportunities. With your support, we are doing this four ways: 1) Training them to be more competitive enterprises, 2) Connecting local entrepreneurs to international buyers, 3) Helping them obtain Rinance, and 4) Facilitating investment. As we pursue these goals, we are staying focused on our mission. But we also recognize that situations evolve, new data arises, and good ideas are replaced by better ones. Therefore, we try to move fast and question our strategy and our tactics. Our achievements to date were due to our ambition and we dont apologize for reaching beyond our grasp. We believe that everything is impossible until someone does it. We dont ask If? we ask How?. At Building Markets we build our teams with smart people who get things done. So we have minimal layers of management and hate bureaucracy. Our HQ may be small, but our ideas are big. We treat each other like a family, not a hierarchy. At Building Markets, we believe that poverty can be beat, and we believe you can help us do it. Thank you again for your support to date, and thank you for helping us build our programs for the future. Sincerely yours, Scott Gilmore

LETTER FROM OUR CHAIRMAN OF THE BOARD

Dear Stakeholders, ERIC NONACS Chairman of the Board Over the past seven years, the story of Building Markets (formerly the Peace Dividend Trust) has been a story of evolution. Challenging the status quo of the international aid industry has always been a cornerstone of our work, with the goal of making traditional aid and development more efRicient and more equitable. At the same time, we have continually challenged ourselves to cultivate and nurture new ideas that make our projects more effective. In this way, we have sought to build on our successes and learn from our failures. As you read this report, you will see that Building Markets has grown and evolved signiRicantly in the past year. Our Sustainable Marketplace Initiative model now includes the award-winning 3FP program, a Rinancial services resource that directly addresses the access to credit problem faced by so many of the entrepreneurs we work with. In the past year, we have launched projects in two new countries, Myanmar and Liberia, and are exploring through our partners an opportunity in Mozambique. Progress has been swift; the team in Myanmar has already helped local SMEs win over US $9 million in new contracts and the Liberia program has already facilitated its Rirst three loans to local businesses. Building Markets is successfully convening key players, facilitating discussion around local sourcing and identifying concrete ways to enable large buyers to increase local procurement. Our work communicates an important message about the role of the private sector in development, the relationship between local procurement and more sustainable aid outcomes, and the potential to make aid more cost effective. Of course, these efforts to build markets in some of the worlds most challenging environments would not be possible without the generous support of our donors and partners. Last year we received a second substantial gift from the Skoll Foundation, which has signiRicantly bolstered our work in Africa and Asia. We have also been able to scale our presence in North America, where we advocate for local procurement as a critical tool in sustained poverty reduction. And our other contributorslarge and smallhave enabled us to retain our commitment to innovation and development. As Chairman of the Board of Building Markets, I want to express my genuine gratitude to all of our partners and supporters whose generosity has enabled us to deliver on our commitment to creating and fostering opportunities for entrepreneurs across the globe and, in the process, transforming the global conversation around aid effectiveness. I look forward to our continued collaboration in the years to come. Warmly, Eric Nonacs

MISSION
We build markets, create jobs and sustain peace in developing countries by championing local entrepreneurs and connecting them to new business opportunities.

2012 - 2013 PROJECTS

The Sustainable Marketplace Initiative
We believe that the only sustainable solution to poverty is employment. In developing economies, over 86% of jobs are created by small and medium sized enterprises. The best way to grow SMEs is through access to opportunity and capital. We work to provide opportunity by enabling local entrepreneurs to enter the supply chains of large buyers through local procurement. We then facilitate access to capital by helping SMEs obtain credit by assisting investors to Rind debt and equity opportunities in the markets where we operate. Our model is called the Sustainable Marketplace Initiative.

Afghanistan Launched 2006 / Closed 2012 1,713

Contracts facilitated

$1,186,812,225
Value of contracts (USD)

8,302
Registered businesses

65,000
Jobs created

Haiti Launched 2009 / Closed 2012

1,332
Contracts facilitated

$28,763,865
Value of contracts (USD)

3,966
Registered businesses

967
Jobs created

Liberia Launched 2011 / Operational

87
Contracts facilitated

$7,241,484
Value of contracts (USD)

2,280
Registered businesses

111
Jobs created

Myanmar Launched 2012 / Operational

26
Contracts facilitated

$9,402,670
Value of contracts (USD)

511
Registered businesses

Coming soon!
Jobs created

SUSTAINABLE MARKETPLACE INITIATIVES (SMIs)

AFGHANISTAN
As Building Markets Rlagship project, the SMI-Afghanistan had an impact on the scale of the national economy, helping entrepreneurs win over US $1.18b in contracts and creating over 65,000 jobs. Although the SMI shut its doors in the spring of 2012, Building Markets has continued to operate two economic development and capacity building programs designed to raise the capacity of Afghanistan run civil society o r g a n i z a t i o n s a n d m e a s u r e t h e economic participation of Afghan women.

HAITI
The 2010 earthquake struck Haiti the day before the SMI launch. The situation instantly morphed from an international development context to post-crisis relief. The teams efforts to re-connect with businesses quickly helped ensure Haitian SMEs active participation in the reconstruction efforts. Two key services, tender distribution and training, were successfully transferred to the Ministry of Commerce. These services still support Haitian SMEs today.

LIBERIA
The SMI in Liberia ofRicially launched in April 2012 with the publication of Seizing Potential: An overview of the Liberian marketplace. Since then, the SMI has forged links between local businesses and international buyers. Building Markets hosted or sponsored events, like the countrys very Rirst MSME Conference, have brought together critical players from the domestic and foreign private sectors, and the government of Liberia, including President Ellen Johnson-Sirleaf. The project works to generate local spending with companies involved in the extractive industry, as well as the traditional range of international organizations and governmental buyers.

MYANMAR
Building Markets arrived on the ground in October 2012 and launched its 5th SMI shortly after. A dedicated business development team has already engaged over 20 international buyers to help connect their supply chains to local SMEs. Services now include business veriRication, business linkages, tender distribution, and general procurement training. The success of the project to date has been in large part due to a strong partnership with the local SME Center, an arm of the Ministry of Industry in Yangon. The SME Center has supported Building Markets with its training activities and outreach to local businesses.

MOZAMBIQUE
Although an SMI in Mozambique has not been launched, Building Markets is working with partners on the ground to conduct a demand and opportunity analysis and assessment of the local marketplace. A slightly different approach to the typical SMI model, an eventual project in Mozambique will be strongly cemented in a multi-stakeholder approach, bringing together key players from the Mozambican government and the extractive and development industries.

FACTOR FINANCE FOR PROCUREMENT

ABOUT 3FP
Factor Finance for Procurement (3FP) is Building Markets access-to-Rinance project. It was originally conceived to assist bankable local entrepreneurs, in particular, small and medium enterprises (SMEs), either receive a loan or understand better the requirements to receive a loan, many of which were bidding on or winning procurement contracts. Thus, 3FP was intended to work hand-in-hand with the Sustainable Marketplace Initiative. The program was designed to provide technical assistance to SMEs and offer partial credit guarantees to partner banks to encourage lending.

IN LIBERIA
The 3FP program was ofRicially launched in September 2012, but established its Rirst operations in Liberia in December 2012. Still in its early months in Liberia, 3FP already has a few early accomplishments. First, 3FP-Liberia has already established its training program in Liberia. This began with a one-day training course, typically held 2-3 times per month, that covers the basics of applying for a loan. Second, 3FP-Liberia has signed partnership agreements with two banks, International Bank and GT Bank, allowing Building Markets to understand closer our partners credit processes and discover how we collectively can improve the credit application process for SMEs.

3FP RESULTS

198 unique SMEs trained

$3,280,000 credit facilitated

IN MOZAMBIQUE
In Mozambique, the 3FP team began exploratory operations in April 2013. This includes developing a speciRic mandate based on discussions with potential partners and the general donor, government and aid communities at large. Though discussions are still in early stages, three banks in Mozambique have expressed a strong interest in working with 3FP. A separate 3FP pilot program is planned for the summer of 2013 to better understand the credit needs of Mozambican SMEs.

FINANCIAL FY 2012

JULY 1, 2011 - JUNE 30, 2012

EXPENDITURES
Program Expenses Management and General

$555,490 $5,927,200

REVENUES

Government Foundation Private $1,281,232

$120,080

$5,048,211

Following the dynamic that PDT [Building Markets] created, we now buy local more often. They encouraged us to buy local, and we saw it is a good principle to create jobs locally. - Jean Fritz Cherestal, Senior Procurement OfRicer UNOPS, Haiti

It is almost impossible for some local businesses attending the event here today to walk up to [multinational] companies or some of the big NGOs. But Building Markets has made linkages and connections between buyers and suppliers possible. -Edwina Vakun-Lincoln, Director of SMEs at the Ministry of Commerce and Industry, Liberia

We are too busy to look for new markets sources. Building Markets can increase my access to suppliers who can provide us with the goods and services we need. -Lay Lay Nge, Procurement Manager, Merlin, Myanmar

Photo Min Zaya/Building Markets

CONTACT US
Scott Gilmore Chief Executive OfRicer 17 State Street Suite 1520 New York, NY 10006 212-364-2053 newyork@buildingmarkets.org Ainsley Butler Chief Investment OfRicer 17 State Street Suite 1520 New York, NY 10006 212-364-2053 newyork@buildingmarkets.org

Building Markets would like to thank all of its donors and partners, past and present, for their continuous generosity and support. They are the ones that let us turn ideas into reality. We would not be where we are today without their commitment to the belief that opportunity is the true antidote to poverty.

For more information or to donate to Building Markets, please visit www.buildingmarkets.org

Photo Mariana Keller/Building Markets