A milestone and another example of the mainstreaming of impact investing. BlueOrchard Finance is a pioneer in microfinance and impact investing. Founded in 2001, the company launched the world’s first commercial microfinance debt investments. As of May 2019, the company had circa USD 3.5bn in assets under management.
From their news release:
Schroders’ partnership with BlueOrchard supports the expansion of its sustainability capabilities. This will help to better serve clients who are increasingly seeking investments which have a beneficial impact on society and the environment, as well as generating positive financial returns. It also accelerates the growth of Schroders in private debt and private equity investments in emerging markets.
Partnering with Schroders enables BlueOrchard to further drive innovation and growth and increase its impact across emerging and frontier markets. Schroders’ stable ownership structure and heritage is aligned with BlueOrchard’s longterm investment philosophy. Sharing values and the desire to generate substantial impact together, Schroders is BlueOrchard’s preferred strategic partner.
There will be no changes to the management team, processes or strategies that BlueOrchard manage
On June 22, 2017 Kiva announced that their life-changing loans had reached 1 billion mark, an amazing accomplishment! Congratulations to the Kiva team especially Matt, Jessica and Premal! In this journal we covered Kiva 4 times since 2006. Soon after they started operation, when they reached 100 million, when they had growing pains and when they started student loans. It has been great to use Kiva in the classrooms to teach microfinance and to give Kiva cards to friends and family to discover their different interests and passions. Thank you Kiva and keep up the great work!
The 14th Skoll World Forum on Social Entrepreneurship took place on April 4-7. This year’s theme was Fault Lines: Creating Common Ground. As boldly described in their welcome message;
Globally, rifts are emerging along cultural, class, and political lines as globalization and the digital revolution have benefited some, and left some behind. The divide grows in how people perceive-and experience-the world which represents a threat to a peaceful and prosperous future. Can we design a world where our common humanity outshines our ideological, cultural, and political differences? Together we’ll rise to new ideas, new perspectives, and ultimately, new relationships built on trust and a mutual desire for human progress. We’ll highlight innovators around the world creating common ground through their drive, creativity and leadership.
It was not only an inspiring forum but a very rich and powerful gathering with bold and innovative ideas and exchanges happening, one of the best that I have attended in the past 11 years.
Highly recommended videos to watch… and if you would like to see more here is the entire playlist.
-Jeff Skoll talks with Jim Kim, President of World Bank Group (29min)
-Jess Search talks to Hamdi Ulukaya, Founder and CEO of Chobani (22min)
-A chilling and fascinating analysis by Michael Porter of HBS on what is the problem in the USA: Porter on Populism (90min)
Meet the Skoll Awardees of 2017 (link includes a 5 min intro to all 4 Awardees)
-Kola Masha: Babban Gona is an investor-owned social enterprise serving networks of smallholder farmers in Nigeria with a model created specifically to attract youth. The first for-profit company to receive the Skoll Award
-Elizabeth Hauser: Build Change trains homeowners, local builders, engineers, and government officials to construct or retrofit disaster-resistant houses and schools in emerging nations vulnerable to earthquakes and typhoons.
-Rajesh Panjabi: Last Mile Health partners with government to deploy, support, and manage networks of community health professionals and to integrate them into the public health system. Working in Liberia.
-Bradley Myles: Polaris systematically disrupts human trafficking networks and restores freedom to survivors. With experience and expertise from direct victim services such as hotlines and resource centers, to policy advocacy, Polaris provides a data backbone for the sector.
A big thanks to Jeff Skoll, Sally Osberg, Stephan Chambers, the Skoll team and the Saiid Business School for their awesome work.
- total asset growth +17%, microfinance portfolio +18%.
-Liquidity declined to 8.2% of total assets, down from a high of 14.6% in 2009.
-Growth in all regions, with Latin America (24%) and East Asia/Pacific (23%) posting the strongest growth, and moderate growth in South Asia (12%), Africa (12%), and Europe/Central Asia (10%).
-Azerbaijan (45%), Georgia (78%), Mongolia (38%), and Bosnia (43%) were among the fastest-growing countries.
-Funds continue to mature, with investors redeeming $438 million in 2012.
-MIV sector continuing to deconsolidate, with largest MIVs continuing to lose market share. Similar trend among fund managers.
-Equity investment grew by $77 million, but declined as a share of the portfolio from 20% to 18%.
-Institutional investors continue to dominate, with 56% share of total investment.
SOCAP 13 (Social Capital Markets, at the intersection of money and meaning) conference took place last week. I could not attend this year but it is great that the videos have already been made available on their website. A platform launched during this conference is ImpactSpace, an open data and resources platform. Their mission is to accelerate impact investing by making information available about the impact market (companies, investors, deals, people) to everyone and maintainable by anyone. It looks already a very helpful and promising resource.
Regarding recent articles and reports in this field that are highly recommended to read are;
1) “When can impact investing create real impact?” by Paul Brest and Kelly Born that appeared in the Stanford Social Innovation Review. The article and the responses by industry experts give a great insight on this topic.
2) “Making Impact Investible” by Max Martin of Impact Economy is a solid and rich working paper that provides a clear framework to understand the industry, all actors and also provides recommendations on how to scale up the industry.
Just back from the “Partnering for Global Impact” a two day forum by EBD Group in Lugano. Key areas covered were agriculture, education, healthcare housing, financial services and water.This forum facilitates outcomes in impact investing and philanthropy through one to one meetings alongside great keynote addresses (such as Sir Ronald Cohen) and panel discussions. It was a well organized event with very good content and great for networking.
Having attended numerous events on impact investment and philanthropy and having been fortunate to learn from outstanding social enterprises over the past 10 years I believe that one new topic should be added to these events.
These great forums such as Skoll World Forum, SOCAP, TBLI and PGI are playing a critical role in helping to solve the most serious problems we face through bringing together ideas, people, capital and promoting the more efficient use of resources. Find sustainable solutions which are working in emerging economies and scaling it. Funding and capacity building to be provided by impact investors, philanthropists and development finance institutions. It’s great but maybe we could do even better.
One different angle should be added. What could WE in the developed world learn and import from the emerging market innovative models that have been successful? Who has developed or is developing low cost high quality services in education, financial services and healthcare? There are successful education models developed in Latin America that could be used for low income communities in the USA. Perhaps vocational school systems or microfranchising business models that could be useful in reducing youth unemployment in The European Union? The increasing applications of mobile technology for payment systems in Kenya? There is so much innovation happening in emerging economies and we should be pragmatic and maybe a bit humble and change our mindsets to search and learn from the best available solution.
I talked about this idea to some veterans in this field, Suzanne Biegel from Catalyst at Large and ClearlySo, Jed Emerson of ImpactAssets and Blended Value and to Hans Wahl of INSEAD and they all thought it made sense! This topic is worthwhile to dig in further and much more research is needed I hope it will be included in future forums.
On March 1st Daiwa Microfinance Fund, the first Japanese investment trust fund to provide commercial financing for microfinance institutions was launched with the fund size of USD 242mn. The fund will be managed by Developing World Markets (DWM) which launched at the same time the underlying vehicle DWM Microfinance Fund-J.The fund is distributed by Daiwa Securities and managed by Tokyo Marine Asset Management. The minimum subscription is of Yen 1000 or 12 USD.
Daiwa seems to be leading the way amongst the big financial institutions in Japan regarding impact investments they had launched a bond that invests in IFC (which invests in MFIs) and also have distributed the GAVI bonds.
Japan has been lagging in the area of impact investments but during my last visit to Tokyo in mid January I could feel/hear that there is finally a lot more interest, awareness on the topic of social entrepreneurship and impact investment. I was lucky also to coincide with the official launch of the Ashoka Japan office. Bill Drayton was in Tokyo to give interviews and to introduce the Japan representative Kashiwa Maki and the long time Ashoka supporter Nana Watanabe. Ashoka Japan had started to operate last year the Youth Venture program.
I also met with Ichi (Hiroyasu Ichikawa) who I had met last year at SOCAP and Skoll who is doing a great job as a social media consultant in Japan. I also met several players in the financial industry that expressed their interest in making impact investments. Once there is interest…. Japan can move boldly… a lot to look forward to!
Looks like 2011 will be a breakthrough year for impact investments. A recent report by J.P. Morgan/Rockefeller Foundation and Global Impact Investing Network (GIIN) defines impact investment as “investments intended to create positive impact beyond financial return”. In other words, investments intended to; improve or provide access to energy, water, education, health, housing, and financial services for the poor, create jobs or mitigate climate change while also providing a financial return.
The term “impact investments” only surfaced less than 3 years ago and now thanks to the impressive efforts of the Rockefeller Foundation and GIIN it is emerging as an asset class. It is capturing the attention of investors in all segments from philanthropic foundations, high net worth individuals, financial institutions and governments as they all seek to make more efficient use of their capital, achieve better returns (social, environmental and financial) and help solve the world’s social problems. Estimates on potential market size (investment capital) over the next 5 to 10 years range from USD 400bn to USD 1 trillion. Major efforts have been made also in developing standardized metrics with Impact Reporting and Investment Standards (IRIS) and more recently on ratings the Global Impact Investment Reporting Standards (GIIRS) is testing its rating methodology with 25 pioneer funds. Impact investments has been featured in conferences such as Skoll World Forum, Clinton Global Initiative and SOCAP last year and certainly this year it will take center stage.
Suggested readings Impact Investments- An emerging asset class (J.P.Morgan, The Rockefeller Foundation, GIIN) Impact Investing: A Framework for Policy Design and Analysis (Pacific Community Ventures, Harvard University) Money for Good (Hope Consulting) Investing for Social and Environmental Impact (Monitor Institute)
related blog What is impact investment?
SOCAP 2010 took place in San Francisco on Oct 4-6. Over 1200 participants. Energetic, lively, sharing, innovative. Impact investments took center stage.Watch these amazing videos of Jacqueline Novogratz (Acumen Fund) Matt Flannery (Kiva) and many more http://video.socialcapitalmarkets.net/live-video-stream/ The first SOCAP Europe will take place in Amsterdam May 31-June 2, 2011.