Opinion Piece Proposes New Model For Development Financing

Quartz: Here’s how countries might actually reach the U.N. sustainable development goals
Nancy Lee, senior policy fellow at the Center for Global Development

“…We need to stretch the limits of what we can do to mobilize more finance for development. This is why we propose new model, which we’re calling ‘the stretch fund.’ … [W]e need a permanent, purpose-built fund whose investors are willing to accept below-market returns for high development impact, which my colleague Dan Preston and I call for in a new research paper. Think of the stretch fund solution as the missing gear we need to help get the rest of the SDG finance engine spinning. As a pooled investment vehicle, the fund’s capital would come from both public and private investors that prioritize development impact. … Donors — public and private — will most likely resist the notion of funding an entirely new development finance actor. But realistically, what’s the alternative? More funding for existing DFIs or for grantmaking will not bridge the gap — and likely won’t get us to where we need to be in the next 10 years. We don’t just need more development finance, we need to deploy it more catalytically. The stretch fund offers a new approach designed for leverage and impact” (12/4).