In Mexico two million people still lack access to electricity and millions more rely on expensive and dirty diesel generators to power their homes and businesses. Access to reliable and affordable energy is a foundational step to eliminating poverty but power lines aren’t coming anytime soon to Mexico’s remotest villages. Ilumexico, a seven year-old social enterprise, brings solar electricity to these communities.
In addition to solar lights, Ilumexico also builds and installs solar-powered refrigerators that bring business opportunities and convenience to Mexico’s rural poor. Beneficial Returns provided a loan to Ilumexico so they could, in turn, provide long term financing to their growing list of grocery store clients.
With dependable solar refrigeration grocery store owners can affordably and safely sell meat, fish, dairy and cold drinks. The inconvenience and cost of ice and spoiled inventory ends when a Kryos fridge arrives, and Ilumexico customers have been able to comfortably repay their loans through their added income and reduced costs.
Through their network of twelve regional retail branches, Ilumexico has brought renewable energy to nearly 10,000 households. The company’s ability to deploy market-based solutions to alleviate energy poverty in Mexico has been recognized by Ashoka, the Global Social Business Incubator (GSBI) at Santa Clara University and by Endeavor.
Fondo Mexicano para la Conservacion de la Naturaleza (FMCN), an environmental foundation headquartered in Mexico City, provided a currency hedge which enables Ilumexico to make predictable monthly payments in pesos and enables Beneficial Returns to meet its dollar-denominated obligations to its investors.
Beneficial Returns’ investors expect a financial return and deep impact as well. To that end, Beneficial Returns added an unusual feature to its loan. The impact debt fund will waive the final monthly loan payment if the borrower surpasses 30,000 solar installations by August, 2022 (a goal that Ilumexico set for themselves.) Ted Levinson, founder of Beneficial Returns said, “I love their ambition and we hope they exceed their goal – everyone deserves access to energy and Ilumexico deserves our support.”
For fifteen years Interrupcion Fair Trade has developed equitable, organic supply chains that give small-scale farmers in South America, Central America and the US access to reliable international markets for their produce. Today Beneficial Returns, a new impact investing debt fund, extended a $500,000 equipment loan to the company so they can expand their work with famers in South America.
Social entepreneurs Diego Gonzalez Carvajal and Rafael Goldberg launched Interrupcion while undergrads at NYU nearly fifteen years ago. Initially the business imported candles and jams from Argentina but quickly evolved into a fresh produce company linking South American farmers with major US grocery store chains such as Kroger and Trader Joe’s. The company aims to improve incomes and working conditions for farmers, restore soil fertility, and expand the scope of organic agriculture, all while delivering quality produce at affordable prices. Today Interrupcion’s supply chain includes over 9,000 farmers working in Argentina, Chile, Peru, Mexico and the US.
Beneficial Return’s loan was used to support Interrupcion’s blueberry operations in Chile. With the loan proceeds, Interrupcion outfitted a new cooling and packing facility and also acquired a semi-trailer truck. These investments will reduce spoilage and increase produce quality leading to more income for Interrupcion and its 1,900 small-scale farmers who grow organic and biodynamic blueberries in Chile. According to Carvajal, “We have big ambitions at Interrupcion. Like many social enterprises our biggest obstacle to more growth and more impact is capital."
Interrupcion’s story neatly captures Beneficial Returns’ focus on supporting established social enterprises that work to reduce poverty through sustainable agriculture, renewable energy, waste repurposing or livelihood development. Beneficial Returns provides equipment loans of $75,000 to $500,000 exclusively to borrowers who operate in emerging markets.
Beneficial Returns’ investors are family foundations and Donor Advised Funds that aim to simultaneously earn a financial and impact return on their undeployed philanthropic capital. They share the conviction that poverty can best be tackled with market-based solutions and that debt is usually the most effective way to support these efforts.
Current Beneficial Returns investors include Swift Foundation, Skees Family Foundation, Younger Foundation and Tides Foundation. RSF Social Finance provided a partial guaranty support the loan to Interrupcion. Beneficial Returns is actively seeking new investors who want to use the power of finance to improve the world and new borrowers who need debt capital to expand the scale and scope of their work.