Financing forest-related enterprises: lessons from the Forest Investment Program
Financing forest-related enterprises in ways that reduce both deforestation and poverty is critical to climate action and sustainable development. Yet it is challenging. The Climate Investment Funds (CIF) ‘Evaluation and Learning Partnership on Financing Forest-Related Enterprises’ (ELPFFRE) is looking at ways of improving access to and leverage of finance from the private sector. Early findings suggest that on the spectrum from micro livelihood investments to large debt or equity investments lies a challenging weak or ‘missing middle’, with a potentially very high multiplier effect for CIF. Emerging questions to tackle this ‘missing middle’ should now be focused on scaling up for greater efficiency, the best way to improve forest enterprise through business incubation and ways to reduce the risk of investing in these businesses.