Three Jobs: Bridging the Finance Gap for the Missing Middle

By Chad Jordan

How can we include the economy in our efforts to create social impact? Through the story of building Arrow Global Capital, Three Jobs answers that question and many more. It’s not enough to simply feel good about the checks we write and handouts we give — our efforts can and should create jobs, promote education access, and ensure food security for communities around the globe. Together, we can create lasting change. Three Jobs provides an inside look at what it means to take "impact investing" to the next level by focusing on the entrepreneurial journeys of a few key partners.

• Language: English
• Publisher: Chad Jordan
• Release date: Aug 31, 2016
• ISBN: 9780984754342

Chad Jordan

Chad Jordan is an author, speaker, and self-diagnosed unconventionalist. He is the author of Shut Up & Give?, ReThink Missions, & Three Jobs. He is also the founder of Cornerstone International, LLC, a development consulting firm, and Arrow Global Capital, an impact investing platform. In working to discover lasting solutions to global poverty, he has direct field experience across five continents. He holds a master's degree in international development from The George Washington University in Washington, D.C.

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PRAISE FOR ARROW

I see every day how entrepreneurs succeed when given access to affordable capital, markets, connections and training. The partnership between Partners Worldwide and Arrow Global Capital represents an opportunity for that to happen exponentially. - Martin Mutuku, Africa Regional Director, Partners Worldwide

TechnoServe works to enable greater flows of capital for SMEs in the developing world. The new model developed by Arrow Global Capital enables TechnoServe to provide such support in a more commercially-driven and sustainable approach thus building the foundation for a more lasting partnership between the two organizations, as well as for the portfolio of investee businesses. - Jane Abramovich, Access to Finance Head, TechnoServe

Arrow has been an innovative partner with a new model that provides access to capital to high potential growing businesses but that by the nature of their sector and operations or by the lack of collateral don´t have an opportunity in the traditional and conservative local financial market in Nicaragua. They take the time not only to understand the businesses they want to support, but also the people. - Oscar Artiga, Central America Regional Director, TechnoServe

This moving experience in Nicaragua got me off the dime and I am becoming a philanthropic investor with Arrow. Observing how the local bank, the TechnoServe team, and Arrow vet these well-established companies not only removed any risk concerns I might have had, but motivated me to support this valuable net- work since loans to many of these businesses are critical. - Cheryl Gordon, Arrow Advisory Panel Member & Founding Partner, The Level Market

Arrow Global Capital represents capitalism unleashed in its purest and most positive form. Arrow is not an investment fund, rather it mobilizes & aggregates dormant capacity in the form of credit guarantees to support emerging market innovation across the world. - Will Bowersox, Able Lending

As an investor, I’m invited to be as involved as I want to be in that process, including joining the Arrow team on an in-country visit to see firsthand the fruit of my investment. Arrow isn’t funding people with good ideas – they connect investors with heart to entrepreneurs with a track record. With Arrow I know that the business already has profit and people – they just need access to the resources to grow. - Lance Humphreys, Entrepreneur & Investor

Having the opportunity to collaborate with Arrow Global Capital on their venture in Nicaragua has without a doubt been an exciting experience. None of it would have been possible without the energy and forward-thinking attitude of Tara and Chad Jordan. We look forward to continue supporting their efforts in Nicaragua, and the rest of the Central American region in the near-future. - Michael Navas, Attorney in Nicaragua

Copyright © 2016

A publication of Arrow Global Capital

ISBN : 978-0-9847543-5-9

P.O. Box 5211

Norman, OK 73070

arrowglobalcapital.org by Chad Jordan

Cover & Design by Create Flourish

Image Credits: Tara Jordan, Symphonie Swift, Brian Li

Images Property of Arrow Global Capital, Inc.

All rights reserved. This book or any portion thereof may not be reproduced or used in any manner without the express written permission of the publisher except for the use of brief quotations associated with a book review.

Digitally Published by Electric Moon Publishing, LLC. at Smashwords

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TABLE OF CONTENTS

Cover

Praise for Arrow

Copyrights

Title Page

Introduction

Prologue

1. Where it started

2. The Arrow Model

Section 1: Trial & Error

3. Marker board musings

4. Laying the foundation

5. Getting it done right

6. Building partnerships

7. Nicaragua: MarExport

8. Mozambique: Africa Poultry Works

9. Capital mobilization

10. Capital deployment

11. Measuring results

Section 2: Onward & Upward

12. How to engage with Arrow

13. Bridging the gap

Epilogue

FAQs

Acknowledgements

Meet Chad & Tara

INTRODUCTION

Introduction by entrepreneurs from Nicaragua

We are Michael Núñez and Teresa Romero, owners of MarExport, which is dedicated to the production and distribution of shrimp. Our business is located in the protected area of Estero Real, Chinandega, Nicaragua.

We started the company fourteen years ago to be merchant exporters, but six years ago we dedicated ourselves to production. Currently, the company is legally constituted, and we have fifty-seven hectares in production, generating twelve permanent jobs and nine temporary. At harvest time, three times a year, we employ up to thirty-two additional people in the local community.

Impulsa Tu Empresa at TechnoServe

The Impulsa Tu Empresa (or Boost Your Business) program at TechnoServe has been a great partner in our growth. It has contributed to many workstreams, mainly updating what we had done for years and helping us to see and manage our business as a formal company. The program supported us in preparing our growth project so we could prioritize our investment needs; likewise, our business mentors have helped us organize and manage funds in compliance with this plan. We feel privileged to have our project underway!

Relationship with Arrow

TechnoServe connected us with Arrow Global Capital. We saw it was a great opportunity and did not hesitate to prepare the information request- ed. Financing that would fit our needs, with fair interest rates, was what we were looking for.

Previously, we were either paying high interest rates to individuals, or had to commit to sell part of our production to the trading company that provided us supplies. Today, thanks to our partnership with Arrow, we’re masters of our own decisions, which has allowed us to purchase supplies on our own schedule and reap the harvest when we can negotiate with the highest bidder.

INTRODUCCIÓN EN ESPAÑOL

Somos Michael Núñez y Teresa Romero, propietarios de MarExport N.R. empresa dedicada al cultivo y comercialización de camarones. Lo- calizada en el área protegida del Estero Real, departamento de Chinande- ga-Nicaragua.

Nacimos hace catorce años como comerciantes exportadores del pro- ducto, pero hace seis años nos dedicamos a la producción. Actualmente, la empresa está legalmente constituida, contamos con cincuenta y siete hectáreas en producción, generando doce empleos fijos y nueve tempora- les. En tiempos de cosecha, tres veces al año, se emplean hasta treinta y dos personas de la localidad.

El programa Impulsa Tu Empresa de Technoserve

El programa Impulsa Tu Empresa en TechnoServe ha sido un gran ali- ado en nuestro crecimiento. Ha contribuido en muchas tareas, principal- mente en ordenar lo que habíamos hecho empíricamente por años y promover que veamos y administremos nuestro negocio como una empresa. Nos apoyaron en preparar nuestro proyecto de crecimiento, así pudimos priorizar nuestras necesidades de inversión, así mismo, nos han acompañado en organizarnos y gestionar fondos en el cumplimiento de este plan. Nos sentimos privilegiados de estar cumpliendo con nuestro proyecto!

Que ha significado Arrow Global Capital

Después de varios intentos en gestionar financiamiento con organizaciones locales, TechnoServe nos contactó con Arrow Global Capital, mación solicitada. Un financiamiento que se ajustara a nuestras necesidades, con tasas de interés justa, era lo que necesitábamos.

Anteriormente, pagábamos intereses elevados a personas naturales, o estábamos comprometidos a vender una parte de la producción a la empresa comercializadora que nos facilitaba los insumos. Gracias a la alianza con Arrow hoy somos dueños de nuestras propias decisiones, nos ha permitido comprar insumos y con esto a la hora de cosechar podemos negociar con el mejor postor.

PROLOGUE

You just heard from Michael Núñez and Teresa Romero, husband and wife entrepreneurs in Chinandega, Nicaragua. Michael and Teresa were referred to Arrow by TechnoServe, one of our local accelerator partners. We first met them in person at their shrimp farm on a stifling, sunny morning. It was supposed to be well over a hundred degrees during our visit, so we started our journey at dawn, watching the sun rise over one of Nicaragua’s many volcanoes.

Teresa originally started the company on her own, but as she found success, her whole family — including her husband Michael — got involved. Their daughter, Flordeliz, manages the ac- counting processes, while one of their sons, Kevin, manages the feeding and harvesting of the shrimp.

Even those employees who aren’t family are treated like they are. Everyone eats around the same table, everyone pitches in, and everyone is included in the conversation about MarExport’s future.

MarExport’s workforce is made up of mostly unskilled laborers who would otherwise be either unemployed or working for below-market wages at one of the nearby agricultural farms. Michael and Teresa have made their employees a priority from day one, always paying them better than surrounding farmers, so that they are able to provide for the basic needs of their families.

As you read, MarExport has been in operation for fourteen years and has established itself as a leader in shrimp production, selling locally and exporting both regionally in Central America and to select European markets. Michael and Teresa have secured small loans from local financial institutions in the past to complete basic projects, and the company’s cash flow is extremely solid. What hasn’t been possible, however, is accessing growth capital to scale the business. MarExport is a small- and medium-sized enterprise (SME). SMEs are the building blocks of an economy, but in many emerging market nations, they’re not well understood or properly supported.

This lack of financial access is where Arrow enters the scene. We’re doing things a little differently than typical philanthropic interventions — engaging with the economy, rather than ignoring it — and Arrow provided a loan to help MarExport reach its growth objectives. A few months later came the first evaluation report. Would the social and financial impact we imagined Arrow supporting become reality? This was a big test.

Full of some great information about protecting the mangroves, debt reserves, pricing leverage, wage increases, a new boat, construction up- dates, and so on, the first evaluation report we received about MarExport was very positive. But then I kept reading. Only three short months after receiving the first installment of its loan from Arrow, MarExport had al- ready created three jobs. I was floored.

I broke out in fits of laughter as I read and reread that report on Mar- Export over the first several days. Three unskilled workers had discovered the dignity of work; three families had come to know food, education, and healthcare security. Fifteen family members would end the year in a much different way than they’d started it.

We’d built Arrow to create jobs, to