The movement toward investment that targets a social and/or environmental impact is gaining momentum across the globe – especially in emerging and frontier markets. In sub-Saharan Africa in particular, impact finance has been pivotal in unlocking a new source of capital to balance the shortage of state funding for impact-oriented initiatives. The visibility of these efforts has been amplified by ambitious commitments like the Sustainable Development Goals. This momentum has shown the difference private sector engagement can make when mobilized for social impact.
But as the sector looks toward the next stage of its evolution, the need for some common principles has become clear. Questions have emerged about what impact investing is – and what it isn’t – as well as how the social impact of these investments should be measured.
To help answer these questions, 40 thought leaders converged in Austria last month, under the aegis of the Alpbach Forum, in an effort to develop a framework that would guide the impact investing space going forward. The forum represented an important step in the conversation about the meaning and ongoing evolution of the sector. From our perspective at StratLink Africa Ltd, a Nairobi-based financial advisory firm focusing on emerging and frontier markets, the discussion of a guiding framework for social impact finance could not have been more timely – particularly for investors in sub-Saharan Africa.
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