The IMPACT Programme, funded by the Department for International Development (DFID), announced this week the funding of 10 new partners in sub-Saharan Africa and South Asia.

Many livelihoods and businesses across the world are facing the economic fall-out of COVID-19. These effects are predicted to be even more severe and long-lasting in developing countries where there are already very few safety nets for small businesses.

Rather than investing in small businesses directly, the IMPACT Programme delivers grants and technical assistance that helps to bridge the gap between investors and businesses to increase the flow and distribution of capital in these two regions.

The IMPACT Programme selects partners based on their ability to create and catalyse positive change in the impact investment sector. Each will receive grants and moving forward, IMPACT will strategically match the grantees with market building advisors to work closely with the teams as they implement their programs, navigate issues, and link them directly with other partners in the IMPACT portfolio.

Underfunded Projects

A number of this year’s grantees, Reall, Athena Infonomics, and Blue Finance are developing new products to attract financing to very niche and underfunded sectors that are typically funded by either local governments or philanthropic organizations.

Reall, a UK-based social enterprise with experience in urban development and affordable housing, is demonstrating the viability of extending mortgage finance to unlock affordable housing finances for the unbanked, informally employed, and self-employed individuals and households in Kenya and Nigeria.

Athena Infonomics is a data-driven global consultancy that uses social research methods to drive innovation in developing countries. The grant provided by IMPACT will fund the development of a market-level investment analysis tool to assess investments in the sanitation sector in India and Kenya.

Blue Finance is providing impact investment solutions for marine conservation, livelihood and climate change and funding provided by the IMPACT program will support the design and structuring of a facility to support Marine Protected Areas in Cape Verde, Mozambique, and the Seychelles.

Rebuilding the Global Economy

These types initiatives are going to be more important now more than ever in helping to rebuild the global economy – in particular making sure that investment doesn’t stop flowing to underserved markets in Africa and Asia.

Evidence suggests that investments in those regions may start to dry up as investors become more risk averse. Convergence Finance noted recently “With investors withdrawing $90 billion from emerging markets in the first 3 months of 2020 (the largest outflow ever recorded), and with rising debt burdens in developing countries and depreciating local currencies, the sustainable development agenda faces a difficult landscape”

These IMPACT-funded initiatives aim to tackle market barriers, making it easier to invest in Asia and Africa and, in turn, helping to kickstart economies in the COVID-19 recovery phase.

“The global economy has been affected by an extraordinary shock from COVID-19, putting at risk hard-won economic and developmental gains across sub-Saharan Africa and South Asia,” Palladium’s James Hills and Tom Adlam wrote for ImpactAlpha. “To meet the SDGs, we urgently need to unlock constraints that prevent capital flowing at scale to impactful investments in these regions.”

“The IMPACT Programme has an ongoing and crucial role in this: linking ideas, products, services and players with funding and with other players to create a strong and sustainable impact investing ecosystem.”

The IMPACT Programme is implemented by Palladium and funded by DFID.  The partners include Athena Infonomics; Reall; Blue Finance; Global Impact Investing Network (GIIN); The Global Steering Group for Impact Investing (GSG); The Impact Investing Institute; Impact Management Project (IMP); 17 Africa; Convergence Capital; and ILX Fund.