5. Sebastián Salinas OCDE _ Path to Economic Resilience.pdf

OECD Webinar

1. Fostering
communities that are
protagonists of their
own development
Our purpose
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of the territory is rural, being the
main stage of national inequality
61% · 90%
16% · 60%
38% · 91%
33% · 60%
16% · 8%
Accessto housingin
good condition
Accessto
broadband internet
Accessto health
centers
Accessto a
computer station
Povertyas a
measure of
income
Rural Urban
83%
In Chile…
Context
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About
Balloon Latamis a social enterprise
and certified B Corp, that seeks to
install entrepreneurial skills in rural
communities, generate a shared
vision of territorial development
through effective participationand
thus be able to reduce gapsto
increase the wellbeing of all who
inhabit the territories.
Coquimbo
Región Metropolitana
Maule
O’Higgins
Bío Bío
Araucanía
Los Lagos
Aysén
Magallanes
We’ve worked in…
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6.080
Total Balloon Community
20%
are Community
Leaders
55%
Araucanía region
17%
Los Lagos region
15%
Maule region
13%
Aysén region
47 years
old
Average age
59%
participates in
grassroots
organizations
69%
entrepreneurship
is their main
source of income
53%
have an impact-based
project/venture
39%
belongs to indigenous
communities
Our community
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Permanenc
e
Pertinence
Participation
↓ TRUST
↓ SOCIAL CAPITAL
↓ DEVELOPMENT
Our model
We propose a vision of integrated work at three levels, aiming at a
participatory, articulated and pertinent development. We start by
working individual projects in collective spaces, with data and social capital
as a result for that then enables impact at the territorial and community
level.
COMMUNITIES
TERRITORIE
S
LOCAL
ENTREPRENEURS
ENTREPRENEURSHIP
↑TRUST
↑SOCIAL CAPITAL
↑DEVELOPMENT
↑TRUST
↑SOCIAL CAPITAL
↑DEVELOPMENT
MUSIC
SPORTS
CHILDREN
ART
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05
02
03
04
Articulation
for implementation
Community
Activation
Project
Incubation
Community
Linking
01
Territorial
Immersion
Facilitate the installation
and intervention of
Balloon in a territory
based on the
understanding of the
socio-territorial reality and
the manifestations of
social capital
Activate links with the
community and its key actors
through entrepreneurship,
productive innovation and
business development
Strengthen networks,
connections and links
between community
members and coordination
with key actors in the
ecosystem
Promote community
management of projects and
initiatives that respond to
territorial challenges and that
allow generating impact in
gaps
Co-create and implement
community, participatory and
territorially relevant projects
with the community and key
actors
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Our model
Balloon’s
Socioterritorial
Process (STP)

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Throughout the +12 years of experience in Chile, we have developed projects that generate
social impact in communities and territories with clients from the private, public and third sector
sectors.
About
@balloonlatam | balloonlatam.com | balloonlab.cl

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Awarded first place in
the Viva Schmidheiny
award in the category
Innovation for
Collective Action in
Latin America
Recognized with first
place in the Social
Innovation sector
during May 2023,
by the Merco
Responsibility ESG
2022 ranking
In 2021 we were
recognized in the triple
impact and SME
category for the
"Balloon With You"
program and the digital
literacy program for
rural communities.
Chosen for several
consecutive years we
have been recognized
as a Best for the World
company in the
following categories:
General (2019) and
Clients (2019, 2021
and 2022)
Since 2019 all our
financial statements
have been audited by
PWC, ensuring
compliance with the
highest international
financial standards.
We have been recognized by different organizations inside and
outside the country both for what we do and how we do it.
Awards
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Territorial
Intelligence
Our vision
Articulated
Community
Social Capital
Main
assets
balloonlab.cl
To further make use of Balloon’s assets and help in its expansion and impact-focused
mission, the Balloon Lab was created as a new R&D unit and future separate company,
aiming for future exits or integrations into Balloon as new lines of business, enabling Balloon
Latam’s further expansion.
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Territorial
Intelligence
Our vision
Articulated
Community
Social Capital
Main
assets
Rural
Development
Fund
Communal
Resilience
Index
Some initiatives
Different initiatives are in development, today, we’d like to talk about two:
The Rural Development Fund, focused on providing access to capital for growth to
disadvantaged rural entrepreneurs; and the Communal Resilience Index, focused on
generating a baseline “stoplight” of a community’s resilience and preparedness.
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Rural Development Fund
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Structural and cultural factors keep large groups of rural
entrepreneurs marginalized from access to financial tools under
accessible conditions.
This reinforces inequality and vulnerability making the
development of their projects much more fragile and difficult:
●Seasonality –Traditional financial institutions do not
consider that the yearly income of a rural family is
generated during 4 months of a year.
●Informality –Official numbers state a 32% of
informality in Chile, but in more remote regions this
percentage may be around a 65%.
●Lack of trust –Increases the cost of transactions,
which is most unfavorable for the poorer population.
Why
RDF?
Poverty
Traps
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About the Rural Development Fund
The first version of the RDF was promoted by Balloon Latam and executed in
conjunction with Fundación Avina and Fundación Dinero y Conciencia; with the support
of Ashoka and four Family Offices, seeking to support and strengthen rural
entrepreneurs financially, by putting the existing social capital and trust at the
center of the operation.
Marchigue
Torca
LDG
Prisma
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“I applied [...] because they opened the doors for me without asking as
many things as in other places. Because of the trust they had in me”
invested in essentials for their established
businesses’ growth62%
“They gave me an opportunity nobody else did, I could not get credits
or have access to anything”
invested in new opportunities and
expanding their established business38%
RDF 1 Feedback
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RDF 1 Feedback
“(It helped me) go for more, see my orchard as something greater,
with more expectations, sales, people”
of businesses saw
increased sales54%
“It helped me have economic stability to get moreproducts,
diversify, and even feel more emotionally stable”
of RDF beneficiaries thinks their business
will grow in the future89%
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255
million
CLP
85%
Paid
12%
Refinanced
3%
Default
RDF 1 Results
The first version
of the Rural
Development
Fund has proven
that trust works
as a basis for
successful
repayment in
rural SMEs
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What’s changed for RDF2?
●Impact: Only to fund the entrepreneurs,
annual cost of 3,5% involved
●Mixed: Participation in fund and
administrative costs
●Philanthropy: Donation to support
management of fund
●Return to investors: 5%
Improved financial
structure
Mixed scheme of
participation for investors
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What’s unchanged
for RDF2?
1. On-going support
2. Diversification
3. Social capital and
business intelligence
More demanding criteria for
accessing. Clear
information about
conditions of the FDR.
Call and
Information
Acompanyment month by
month (You are not alone, and
we need you to respond).
Follow-up
First direct contact to know
and orient.
Early alerts.
Qualitiative
Analysis
Formalized process, entrepreneur is
responsible, has to coordinate and
pay associated fees.
Credits
Financial and business training
during the process.
Further alerts, verification, project
evaluation.
Financial Analysis
Learn to know
and teach
Formality
Discipline
FINANCIAL
INCLUSION
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What’s unchanged
for RDF2?
1. On-going support
2. Diversification
3. Social capital and
business intelligence
RDF 1 Diversity
By gender
By region
By industry
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What’s unchanged
for RDF2?
1. On-going support
2. Diversification
3. Social capital and
business intelligence
@balloonlatam | balloonlatam.com | balloonlab.cl

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Future vision for the Rural Development Fund
RDF2RDF1
2024–20252020–2023
255 million
CLP
1,000 million
CLP
Based on learnings from RDF1, RDF2 integrates
best practices, increases coverage and is less
philanthropy oriented towards true impact
investing schemes in rural SMEs
RDF3
2025–onwards
Growing fund
The vision for RDF3 is a self sustaining impact
investing growing that reaches more rural
SMEs and makes intelligent use of technology
for close accompaniment of entrepreneurs
Today
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Community
Resilience
Index
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3.6 billion
of people live in contexts
of high vulnerability to
the effects of climate
change
New normal?
Source: Sixth Assessment Report Working Group II -Impacts, Adaptation and Vulnerability, Key Findings of the AR6 Report on Impacts, Adaptation and Vulnerability, Part I: Impacts and Risks IPCC Working Group II Author Team
Climate migration
Global boiling
Point of no return
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54%
of Chile’s
population is
exposed to
three or more
climate threats
High volcanic activity
High seismic activity
High hydrological activity
Only 8 of the 346
communes in
Chile have an
approved disaster
risk reduction
plan.
Source: National Risk Reduction Policy 2020-2030, Ex-Ante
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Despite SDG
goals integrating
several key
resilience related
goals into its
framework, many
challenges remain
in rural areas.
1.5 By 2030, build the resilience of the poor and people
in vulnerable situations and reduce their exposure and
vulnerability to climate-related extreme events and
other economic, social and environmental disasters.
11.b By 2030, substantially increase the number of
cities and human settlements that adopt and
implement integrated policies and plans to promote
inclusion, efficient use of resources, climate change
mitigation and adaptation, and resilience to disasters,
and develop and implement, in line with the Sendai
Framework for Disaster Risk Reduction 2015-2030,
comprehensive disaster risk management at all levels.
13.1 Strengthen resilience and adaptive capacity to
climate-related risks and natural disasters in all countries
13.3 Improve education, awareness and human and
institutional capacity regarding climate change mitigation,
adaptation, impact reduction and early warning
13.b Promote mechanisms to increase capacity for
effective climate change planning and management in
least developed countries and small island developing
States, with particular emphasis on women, youth and
local and marginalized communities
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The effects of disasters and
climate change on rural
communities show us new faces
of territorial inequality.
Los Lagos
region
Araucanía
region
Problem
Maule region
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Threats x Exposure x
Vulnerability
Resilienceor capacities
Riskis an equation that equals to…
How might we lower risk if we have no
baseline information?
of threats, exposure, vulnerability, resilience and capacities in rural
areas.
Risk =
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Collaboration
Main
contributions
Main
contributions
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Balloon’s
permanent
presencein rural
territories allows us
to add value
toward resilient
development, by
generating
baseline resilience
information and
building capacities
in the community

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Our pilots around DRR social
technologies led us to realize
how many baseline instruments
from development agencies are
excessively deep or impractical
for rural contexts.
Balloon’s Community
Resilience Index, seeks to fill
the gap of practical
standardized baseline
information of a community’s
preparedness.
Hualaihué, Los Lagos region Pilot
(2023)

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8 indicators
Disaster risk management and
regulatory compliance structure
6 indicators
Preparation of emergency
management and operational
continuity teams.
10 indicators
Level of telecommunications
equipment, emergency response
and related services.
5 indicators
Level of community preparedness,
warning capabilities and
relationship with the private
sector.
12 indicators
Infrastructure resilience to sustain
emergency response and
rehabilitation.
Balloon’s CRI
–
Community
Resilience
Index
Normative
Communications
Community
Infrastructure
Equipment
The CRI’s first iteration places a focus on the municipal/communal level as
a proxy of overall community preparedness (public sector focus).
Thenext iteration (in development) places greater emphasis on the private
sector’s involvement, as well as links with SDGs (private sector focus) and gender equality.
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Relatively low cost
investments, such as
providing the right
authorities and community
leaders with VHF radio
equipment, can make a
difference on disaster and
emergency communications.
These practical use case
investments are the examples
that Balloon’s CRI seeks to
make real.
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1. Reduced and
avoided losses
2. Development
and economic
gains
3.
Environmental
and social
gains
Balloon’s
CRI’s
Investment
Strategies
By generating a baseline of a community’s preparedness gaps, standardized
strategies for resilience investments can designed. The CRI’s follow-up
strategies aim bridge the gaps and build resilience with the right investments.
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Triple dividend focus

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Balloon’s Aim:
Implementing the Community Resilience Index across
all 346 communes of Chile
using the baseline information to
make DRR and resilience relevant
and trigger frugal, bottom-up
resilience investments for sustainable development for
all
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34. Let’s make it happen!
[email protected]
m
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