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Impact Investing A Sustainable Opportunity for MSMEs in Nigeria

The impact investing sector has become a thriving and growing market, since the term was first coined in 2007 by the Rockefeller Foundation – “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return” – and is estimated at a total size of USD 502Billions in impact investment assets in 2018, while expectations are for the market to continue to grow at the average annual rate of +17%. This “doing good while making money” investment approach has become mainstream as more and different stakeholders join the industry worldwide, supporting the case for impact investing as a fundamental strategy to unlock the remaining USD 2.5 trillion required every year to achieve the United Nations Sustainable Development Goals (SDGs). To achieve this, Impact investing will require to engage in unlikely and unusual partnerships amongst a wide array of public and private stakeholders and tackle the challenges that the industry is facing. This includes clarifying the identity of what Impact investing is and is not, the feasibility of scale, the need to further develop financial intermediation and the infrastructure necessary for the ecosystem to operate and thrive, the standardisation of processes, information and impact and management tools, and enabling the access to impact investments for all, ensuring to develop the absorptive capacity so that supply meets demand needs and vice versa. Impact Investors should also look into following the principles for transforming finance while making impact investments, specifically ensuring to engage communities in the design of the products, adding more value than they extract and balancing the risk and return fairly amongst all stakeholders, including beneficiaries.

  • GIZ
  • GIZ
  • Nigeria
  • 2020
  • Download Document
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