The spotlight in Kenya this week at the Global Entrepreneurship Summit will be on the creation of jobs, jobs and more jobs.
That is both wise and overdue, of course.
Job creation via startup enterprises and small, early-stage, high-growth companies is essential to the ability of developing nations--indeed, all nations--to reduce poverty and improve lives. Today, this is recognized more than any time in modern history.
However, the issue is not just job creation per se. Precarious jobs beyond or on the fringes of the global economy are often little better than a life of subsistence. Our aspiration should be the creation of jobs with decent wages and social safety net essentials such as health care and insurance.
We have a very long way to go in the developing world. More than 800 million people around the world still live in extreme poverty, on less than $1.25 per day. Even those who migrate to cities find themselves with daunting prospects. The informal economy comprises half to three-quarters of all non-agricultural employment in developing countries, according to the International Labor Organization.
The United States, through its development finance institution, the Overseas Private Investment Corporation, is working to address this problem by ensuring that companies of all sizes--startup, high-growth, and maturing--get a fair shot at receiving the right kind of capital at the right stage of their evolution.
Families, friends and personal savings accounts are often the initial source of capital for the creation of enterprises. That is why OPIC has pushed so hard to advance microfinance, which supports both financial inclusion and capital formation at the personal and family level.
More than $700 million of OPIC's portfolio is devoted to microfinance--a 21 percent increase since 2011--and it is diversified across some 180 institutions across 50 developing nations. More important, a major portion of this is in post-conflict or conflict-affected nations, at a time when there are 60 million refugees worldwide.
Startup small and medium enterprises that create scores of jobs amid their early, make-or-break years often struggle to find commercial loans, investment partners or working capital for growth. The United States recognizes this distinct type of need in the economy. In Rwanda, for example, OPIC is supporting Musasa, a coffee cooperative that has grown from 300 to more than 1,800 members-among them many women who were made widows by the 1994 genocide. Today, many of Musasa's key managers are women, and the cooperative is pioneering new business opportunities for its female members.
That is also why OPIC has developed several new products to address their needs, such as working capital loans and lines of credit, and a pioneering program to provide $1 million to $5 million loans to companies in highly developmental sectors such as sanitation and health care.
No country or combination of countries is capable of meeting the financing needs of innovative entrepreneurs and fledgling firms through public sector funds. In recognition of that challenge, OPIC has created an "aligned capital" program through which investors in search of promising ventures in the developing world can obtain information about firms and entrepreneurs in developing nations that seek financing, particularly equity. This could hold promise for foundations and institutional investors who recognize the importance of direct investment in the developing world, but do not have good vehicles to begin the process.
Finally, OPIC continues to be the lead agency for providing financial support to equity funds in developing nations that invest in thriving, high-potential companies that introduce new technologies, generate spin-offs, create jobs through supply-chain growth, and train the next generation of entrepreneurs.
OPIC currently has $3.3 billion committed across 54 active funds, representing roughly 300 portfolio companies in developing nations, where they are needed the most. More than one-third of this commitment is in Africa. Another quarter of that capital is in Asia, primarily India.
On Saturday, just down the road from where President Obama will be addressing the global delegates to the summit, there is a small garage. The garage exists today, in part, because the owner, Nicholas Aoama Oyiek, received a loan from The Equity Bank of Kenya, which in turn had received capital from an equity fund backed by OPIC, America's development finance institution.
One garage does not change the world. Yet to the 20 employees who work there, and to their families, it represents hope for a better life. America remains committed to that cause.