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CAPx (Capital Impact Exchange) Activity

About the Project

Now more than ever, the private sector is the main engine for growth in the developing world. According to USAID’s Private Sector Engagement (PSE) Policy, private sources now represent nearly 90% of financial flows to developing countries and create nine out of ten jobs. There are increasing levels of private sector interest and investments in the developing world, meaning greater opportunities for donors to engage to leverage synergies, thus unlocking private capital for direct development impact. USAID seeks to mobilize private investment and use blended finance to support countries’ capacities and commitments to implement solutions to local development challenges and achieve self-reliance.

However, while blended finance presents a transformative opportunity to accelerate development outcomes, it remains relatively new and underutilized in donor-funded projects and activities.

The USAID-funded CAPx (Capital Impact Exchange) Activity, led by LINC, is designed to advance the knowledge base, generate and analyze evidence, and adaptively inform USAID’s efforts to catalyze private investment for development outcomes. The five-year global activity, launched in August 2019, is a unique opportunity to examine the way USAID promotes capital mobilization, creates incentives for lending and investment, and leverages private sector involvement. CAPx will apply a human-centered, co-creation approach, bolstered by targeted investments in learning through technical assistance, research, and adaptive knowledge management.

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