SFO Launches Solutions For Global South In Blended Finance / New Infrastructure / Trade Finance / Policy Support / Impact
- As governments and businesses become frustrated by the traditional North-Dominated Policy, Trade, Impact Mechanisms and International Financial System, Southern-Led Development Mechanisms will play an important role in the search for more inclusive, equitable and sustainable patterns of investment, trade and growth in the post-Covid landscape.
- In its endeavour to bring innovative solutions to the world, SFO has pioneered Southern Led Development Mechanisms.
- We are looking for Transaction Advisors, Trustees, Partners, Entrepreneurs, Consultants, Contractors for our work in The Global South.
- There’s a big black hole in the finances needed for the climate and energy transition. Spending today (primarily on mitigation) is around $600 billion. Africa alone needs $3 trillion by 2030, and according to the IMF, the world needs between $3 and $£6 trillion a year until 2050. It sounds like a lot, but private investors have the money: they control assets worth some $210 trillion; banks potentially another $200 trillion. How can they be persuaded to spend some of it?
- The answer hinges on risk. Low- and middle-income countries are risky propositions for investors. The country risk and currency risk are so high that investors would be failing in their fiduciary duty to pension-holders, shareholders and stakeholders – or be non-compliant with regulations – if they did invest.
- But the appetite is there, if risk could be reduced to bring it under the barrier. And this is where blended finance comes in: to use public sector finance to reduce the level of risk to something acceptable to private investors.
- SFO works with Groups like the USAID , U.N.-convened Net-Zero Asset Owners Alliance (with $10 trillion assets under management), Governments, Multilateral Development Banks to bring in concessional capital in supporting blended finance solutions that de-risk investment helping private investors to invest 5 times more than they would normally do. We have the money that we're looking to invest. We've looked at developing countries, and we would like to invest the money there, but the risk is just simply too high for us. Through SFO Blended Finance we create fiduciary blended finance investments, within which we bring capital.
- Blended finance is not a new idea, but it hasn’t taken off as anticipated after the launch of the U.N. Sustainable Development Goals (SDGs) in 2015. We are not blending to scale. We are blending small – project by project. And so, we've got to break some glass in order to blend more.
- SFO has tracked more than 700 blended finance deals that have been put together over the past 15 years to perfect our Blended Finance offering.
- While maintaining close relations with the developed countries India is keen to put forward the point of view of the Global South, our co-passengers on the path of development for decades. Under India’s current G20 Presidency , Finance Ministers of 15 countries of the Global South namely Belize, Colombia, Sierra Leone, Guinea-Bissau, Chad, Sudan, Lebanon, Eritrea, Djibouti, Nepal, Sri Lanka, Mauritius, Lesotho, Zambia and Nicaragua discussed ways to further enhance financial inclusion, sustainable finance & digital public infrastructure. To meet shared challenges of the Global South, SFO shall be Financing People-centric development with implementation of solutions like India stack which is a digital architecture based on identity, payment systems, data empowerment and policy, and most importantly privacy. And several other infrastructure projects that brings Global South at par with Global North.
- At a time global trade is facing headwinds—with growth in volumes losing momentum to 1% in 2023, according to WTO—the good news is that India is diversifying its exports with rapidly growing shipments to The Global South.
- One big advantage India has in The Global South, for instance, is the presence of a 3 million-strong diaspora across 46 countries with linkages to trade. India has stepped up development cooperation in the Global South with 222 lines of credit worth $14 billion, covering 357 projects, extended to 42 countries since FY18. India has also cumulative investment commitments of $70 billion in Global South led by India Inc.
- SFO has built on such diaspora the Trade Finance Solution for The Global South.
- A central factor responsible for The Global South state of affairs is policies pursued in response to the crisis in the Global North. There are two major shortcomings: the reluctance to remove the debt overhang through timely, orderly and comprehensive restructuring, and fiscal orthodoxy. These resulted in excessive reliance on monetary policy, with central banks going into uncharted waters including zero and negative policy interest rates and rapid liquidity expansion through large acquisitions of public and private bonds which are not even focussed towards the critical infrastructure that The Global South needs.
- These policies have not only failed to secure a rapid recovery, but also aggravated the global demand gap by widening inequality and global financial fragility by producing speculative bubbles and a massive build-up of debt almost everywhere, by some additional $50 trillion since 2008, outpacing the growth of world nominal income. They have also generated strong deflationary and destabilizing spillovers for emerging and developing economies (EDEs).
- Overall the global South has not been very effective in pursuing these matters and suffers from a collective action problem.
- SFO working with Global South has build solutions to provide Political solidarity and a common reflection which is needed among EDEs about the policy response to the next major turmoil and in setting priorities and the agenda for change in global economic governance.
- Sekhon Family Foundation - Creating Mindful Impact ™ - Promoting the well-being of humanity throughout the world, SFO Foundation is the Impact Investing / CSR arm of Sekhon Family Office. Our Initiatives go beyond the regions where our Sekhon Group Businesses operate. SFO is committed to supporting projects that deliver a significant and sustained positive impact in the Global South. Development impact is central to SFO’s work. To achieve its impact mission, working closely with Impact Funds / Foundations / NGO's in The Global South , SFO has developed an impact strategy that identifies priority sectors and strategic priorities and includes impact targets across each of them.
6. SFO Del Credere Services For The Global South ™
- As a service provider operating on an international level for various lines of business, SFO offers contractual suppliers central settlement while, at the same time, providing full insurance cover against the risk of customer / supplier insolvency (Del Credere).
- SFO for many years has been working together successfully with leading Credit Insurers / Factors / CDS / CDO players who have a first-class rating (AA-) and are trustworthy, strong partners for del credere cover due to their international experience and specialisation in trade credit insurance.
- SFO offers an extensive range of products for:
- Central Settlement
- Del Credere Cover
- Security for Imports
- Payment Process Services
- With the launch of the above SFO shall support our Trade, Wholesale and Industry customers in The Global South who are well-known, often international companies who are market leaders in their respective segments as well as MSME.
- The constant growth in our business portfolio is a sign of the trust shown by our customers and suppliers in SFO and reflects the quality of our work.
- Our committed team shows outstanding personal and professional skills so that we are able to offer individual solutions in the field of customer-supplier-relation.
If you are a Transaction Advisor, Trustee, Partner, Entrepreneur, Consultant, Contractor & would like to join hands in our work in The Global South, please reach out on coordinates below.