Lack of investment is one of the major problems newspapers face in developing markets. Expanding operations, developing new products, and investing in new staff and printing facilities are the areas where capital is needed the most.
WAN-IFRA, in partnership with the Swedish International Development Cooperation Agency (Sida) and the Media Development Loan Fund (MDLF), has launched the Social Investment in Media Initiative to promote innovative investing mechanisms in media in developing countries and emerging markets.
"Local commercial banks usually provide very expensive, short-term debt financing, while private equity investment is often connected with powerful political elites and restricts editorial independence of media in fragile democracies and emerging markets," said Mirjana Milosevic, the WAN-IFRA programme director who coordinates the project.
"So growing media companies in early-stage capital markets often are faced with a 'capitalisation gap'," she said. "We are working to address this gap and help the growth of financially healthy media outlets as one of the key conditions for the existence of a free press."
The goal of social investment is to maintain healthy financial structures while protecting the social value of media firms as democratic institutions. The Media Development Loan Fund has a unique track record in creating investment products in independent media that provide both financial and social returns for investors, including listing the Voncert investment product on the Zurich Stock Exchange.
"Media development funders are becoming increasingly aware that capital in the form of a formal investment affordable loan or guarantee - can be catalytic and valuable for many media organisations in the developing world, particularly if matched with technical assistance grants," said Pia Hallonsten, senior policy specialist at the Swedish International Development Cooperation Agency (Sida).
"Public-private development partnerships can generate significant added value to development projects. Sida has recognised this and is striving to strengthen the role of development partnerships with private sector," she said.
Investors interested in the Social Investment in Media Initiative can get more information by contacting Mirjana Milosevic at rf.ossa.naw@civesolimm.
The Social Investment in Media Initiative also includes regular expert meetings and briefings that bring media together with investors, donors and development organisations to improve collaboration in media development financing and investment.
The first meeting, held in Stockholm in May this year, brought together 31 organisations including donors, publishers, media support organisations, non-governmental organisations and loan funds to discuss "Investing in media: strategies for sustainable media development".
More on the meeting can be found at http://www.wan-press.org/pfreedom/articles.php?id=6351
One of the conclusions from the meeting was that socially conscious investment was a necessary element in emerging markets to nurture high-impact social businesses.
"Impact investments in independent media provide an opportunity to invest in a sector a free press that underpins all other areas of development," said Sasa Vucinic, MD of MDLF. "The Social Investment in Media Initiative will provide investors with practical ways of combining high social returns with competitive financial returns."
The Swedish International Development Cooperation Agency (Sida) and WAN-IFRA conduct an ambitious strategic partnership to advance media development and press freedom worldwide. The partnership allows WAN-IFRA to broaden and develop its press freedom and media development activities to support free and financially sustainable media worldwide. A series of pilot projects to test new methods and approaches in strengthening media in emerging markets was launched this year.
