Liz Patterson: Closing the Information Gap on Impact Investment – Market Survey

By Liz Patterson, Lead on Social Impact Investment, UK's Department for International Development (DFID)

Information, as they say, is power. Nowhere is this truer than in business and finance. Most new business ventures will involve an element of risk or a leap of faith. However, the better calculated that risk, or the more accurately measured the leap, the better the chance of success. Which is why, the Impact Programme, a programme funded by the UK’s Department of International Development and delivered in partnership with CDC and the Global Impact Investing Network, is launching a survey on the impact investment market in South Asia and Sub-Saharan Africa.

At the moment there is a serious lack of data and transparency in these markets. We undertook a baseline study six months ago which identified an ‘information gap’ on impact investment and broad capital flows in Sub-Saharan Africa and South Asia. As a consequence, donors, investors, fund managers and businesses who are looking to build businesses that have both a financial and a social/environmental return, can sometimes feel as though they are striking off, alone, into the unknown.

We do think there is a lot of activity bubbling, from large DFIs to small family offices. There are some sources of information that hint at market sizes and trends – ImpactBase, the global directory for impact investors, for example, included funds that invest exclusively in the two regions reporting circa $1.5 bn in committed capital in 2013. But we have not found anyone that can accurately gauge the extent of capital flowing to the two regions that has an intent for social or environmental return alongside financial. Similarly, we know little about the level of investment focussed at the base of the pyramid in Sub-Saharan Africa and South Asia, which together have a population of nearly 2 billion people living on less than $2.50 per day (2005 PPP).

Our survey is intended to help close this information gap. If you are an investor, fund manager, advisor, researcher and work in this space, we would be grateful if you could spare some time (around 20 minutes) to help us develop a much fuller and clearer picture of current levels of investment, investor confidence and perceptions of market conditions in these regions. The survey can be accessed here, respondents will receive priority access to the results of the survey, and the findings will be released in a public report.

The survey has a specific focus, firstly to understand flows of capital into the regions that have an intention for financial and social/environmental return. It asks what has been invested and asks for estimates going forward. Secondly, it seeks to understand the attitudes of those that are specifically in the space. It will produce findings on confidence and attitudes to risk and challenges of those that invest in Sub-Saharan Africa and South Asia with the intention for dual return.

The findings will inform DFID’s activities to support investments in businesses that serve poor. They will also provide a rich source of information for other market stakeholders including investors, policymakers and donors. The survey is unique in its focus on these two important regions and, importantly, it will be repeated every two years for the next decade or so. Its intention is to track changes and progress - not just take a snapshot – and provide a more complete and valuable picture over time.

PricewaterhouseCoopers are undertaking this survey, as part of their role as the Coordination Unit for the Impact Programme and their remit in tracking its overall impact. If you have any questions, please contact theimpactprogramme@uk.pwc.com.

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