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> Posted by Center Staff
What’s the current state of impact investing? It’s expanding and diversifying across sectors and geographies, and recent years have yielded better impact measurement practices, quality of investment opportunities, and support stakeholder involvement. Need more specifics? This week GIIN and J.P. Morgan released the results of their fifth annual impact investing survey, Eyes on the Horizon, offering data and industry insights on these and other areas.
The survey serves as an annual pulse-taking for the growing industry, consulting with investors around the world on their performance, as well as their perceptions on progress and what’s ahead. The 2015 survey tapped 146 impact investors – fund managers, banks, development finance institutions, foundations, and pension funds. Together the cohort committed $10.6 billion in impact investments in 2014, with plans to increase this figure by 16 percent in 2015. The 82 organizations that participated in the survey last and this year reported a 7 percent increase in capital committed between 2013 and 2014.
Along with previous survey topics, like types of investors and number and size of investments, this year’s assessment also covered loss protection, technical assistance, impact management and measurement, and exits.
> Posted by Jeffrey Riecke, Communications Associate, CFI
The impact investing space is growing and benefitting an increasingly diverse array of areas including financial services, agriculture, healthcare, housing, energy, and more. Expanding too is the number of impact investing organizations incorporating impact measurement as part of their investment activities. As more players enter and the industry matures it’s even more important that the industry embraces the capture of impact data and assessment of progress against stated goals. This information validates the industry, helps investors manage investee companies, and improves investor and investee strategic decision-making. It also positions the industry to convince funders, especially new ones, to mobilize additional capital.
Last year the G8 created the Impact Measurement Working Group as part of its Social Impact Investing Taskforce. A few weeks ago the group released its “Measuring Impact” report, which includes seven guidelines for impact measurement and five case studies of how investing organizations have put the guidelines to good use. The initiative by the G8 reflects an elevated priority and the development of the industry.
> Posted by Center Staff
This edition of top picks features posts that spotlight green loans reducing energy poverty, savings and loans to improve the vulnerability of microbusinesses, and factors driving uptake of mobile insurance services.
In celebration of Earth Day, the Kiva Blog took the opportunity to share their work on green loans. These loans to individuals and small business owners help with the high upfront costs of clean energy technology. Globally, 1.3 billion people live in energy poverty – without access to modern energy services. Green loans support healthy and environmentally friendly energy switches, like from kerosene to solar lighting. Kerosene lighting produces black carbon or soot which is harmful to breath and also a greenhouse gas. Kiva has facilitated the funding of 39,000 green loans.
The huge potential for digital finance to reach the last mile of the financially excluded
> Posted by Peer Stein, Director, IFC Access to Finance Advisory
The Financial Inclusion 2020 campaign at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. This blog series spotlights financial inclusion efforts around the globe, shares insights from the FI2020 consultative process and highlights findings from “Mapping the Invisible Market.”
Last week’s seminar on digital finance at the 2014 World Bank Group / IMF Spring Meetings convened innovators, private sector leaders, and government representatives to discuss the potential innovative business models and new technologies have in reaching and empowering the financially excluded poor and small businesses faster and with greater scale, while contributing significantly to the World Bank Group goal of universal access to finance by year 2020. The session highlighted the diversity of business models that use technology to reach the excluded market segment, showcased by innovators from bKash in Bangladesh, Airtel Money-Africa, and Berlin-based Mobisol operating in rural East Africa.
I’d like to share three key points that emerged from the forum.
First, multi-stakeholder collaboration is a must.
None of the featured innovators is a traditional bank or financial institution but each one realizes the importance of partnering with banks and other players in this dynamic space. For example, bKash was born from a fusion of BRAC Bank and Money in Motion, and continues to operate as a subsidiary of BRAC Bank, holding 80 percent of the mobile money market in Bangladesh. With such an adoption success within two and a half years, recording 90,000 digital money agents and 11.6 million registered users, in the words of Kamal Quadir, CEO, “bKash is now a Bengali verb [synonymous with ‘to send money’].” Chidi Okpala, Director of Airtel Money-Africa, a mobile money service with an active base of 5 million customers, reinforced that one of the factors of success in this diverse market is the need to position your mobile money service for stakeholder collaboration rather than competition. The real competitor is cash. Walt Macnee, president of the MasterCard Center for Inclusive Growth, emphasized the company’s connecting and collaborative role focused on ensuring interoperable platforms among a diversity of players.
> Posted by Sebastian Groh, Project Manager, MicroEnergy International
The Financial Inclusion 2020 project at the Center for Financial Inclusion at Accion is building a movement toward full financial inclusion by 2020. Accordingly, this blog series will spotlight financial inclusion efforts around the globe, share insights coming out of the creation of a roadmap to full financial inclusion, and highlight findings from research on the “invisible market.”
United Nations Secretary General Ban Ki-moon recently called upon the international community to commit to a new groundbreaking initiative seeking Sustainable Energy for All (SE4A) by the year 2030. At MicroEnergy International (MEI) we have been working towards this goal since 2002 by supporting microfinance institutions (MFIs) in the process of developing and providing “green microloans,” financial products that help clients finance a renewable or efficient energy system for their home or business. Our work is based on the fundamental belief that the relationship between energy inclusion and financial inclusion is a critical impact point that has positive effects on the poverty levels of low-income clients.
Perhaps the linkage isn’t immediately clear, so a few examples will help us explain.
Financial inclusion leads to energy inclusion. Access to finance can lead to energy inclusion simply in terms of affordability and financial means. People who have access to financial services are able to finance their basic energy needs and either pay for grid-supplied electricity or purchase a distributed energy generation system of their own. These systems have a prohibitive initial investment burden that usually cannot be covered by those at the base of the pyramid (BoP). Innovative green credit design allows clients to pay in monthly installments that correspond to their current expenditures on energy appliances and sources as well as potential savings and income generation opportunities. A scheme of that type has paid off for about two million Solar Home System users today in the country of Bangladesh, according to the World Bank’s IDCOL Solar Home Systems Project.