Impact investing is an investment strategy that aims to generate social or environmental impact alongside financial returns. Key principles of impact investing include:
- Investing in companies, organizations, and funds that are working to solve social or environmental problems.
- Measuring and managing the social and environmental impact of investments.
- Being patient for financial returns, as impact investments may not generate returns as quickly as traditional investments.
In India, some successful impact bonds include:
- The KfW-SBM Community Investment Fund, which aims to improve sanitation in rural areas
- The Pune Municipal Corporation Health and Education Bond, which aims to improve health and education services in Pune
- The Gujarat Rural Road Development Agency Bond, which aims to improve rural road infrastructure in Gujarat
Nonprofits in India can benefit from impact investing by using it as a source of funding for their programs and projects, which can help them to scale and expand their impact.
Examples of impact investments from the rest of the world include:
- The BlueOrchard Microfinance Fund, which invests in microfinance institutions in developing countries to provide access to finance for low-income individuals and communities.
- The Acumen Fund, which invests in companies in Africa, Asia, and Latin America that are providing goods and services to low-income communities.
- The Global Impact Investing Network (GIIN), which is an organization that aims to promote impact investing around the world.