Development finance institutions like the Overseas Private Investment Corporation (OPIC), were formed on the understanding that the private sector has a critical role to play in development. OPIC works to mobilize private sector investment for development and has supported several critical infrastructure projects like power plants and hospitals that require large investments of time and money.

In recent years, OPIC’s Social Enterprise Finance team started noticing that some of the most promising applications for financing were coming from businesses that were smaller and younger than the typical OPIC client. Many lacked the track record that OPIC would typically require, but nonetheless showed real promise for introducing a groundbreaking innovation that could make a significant, positive impact in people’s lives.

OPIC launched the Portfolio for Impact (PI) program as a pilot in May 2014 in its SME Finance Department to support high-impact projects that might be particularly challenged to obtain financing to scale operations.

The first PI project to receive OPIC financing was a microfinance institution that provides small loans to smallholder African farmers from Mali to Togo, so that they can purchase irrigation equipment to extend the growing season, increase yields and earn more income.

Since then, PI has helped several U.S. businesses expand in developing countries. A $4 million PI loan is helping Envirofit International introduce clean cook stoves that reduce indoor air pollution in more than 44 countries from Honduras to India. A $3.7 million PI loan is helping Big Tree Farms support coconut farmers in Indonesia by producing a variety of coconut products that generate higher profit margins. A $5 million loan to Greenlight Planet is helping that business introduce solar technology in India and other developing markets.

It is critical to involve this sort of small business in global development since they are the source of many innovative ideas, and they often focus on markets, regions, or client groups that are being overlooked. PI’s early success supporting these businesses has demonstrated that small amounts of financing can go a long way to making positive change in the world.

To date, the PI program has committed over $30 million to seven projects and in 2016, OPIC extended the PI pilot for five years and committed up to $200 million to the program.