Social enterprises need financing from ‘impact investors’ that include a heterogeneous group like foundations, family offices, banks, pension funds and social investment to scale up their efforts, a discussion in Dhaka was told yesterday.
Impact investors are a group that eyes a social goal beyond merely returns in terms of profit, as explained by the officials of Impact Investment Exchange Asia or IIX Asia, which organised the programme in association with Asian Development Bank.
Durreen Shahnaz, IIX Asia’s founder chair, pointed out that a social bourse offers a mechanism to help local social enterprises raise capital and grow further.
“Such a specialised regional exchange will reduce the cost of search for impact investors and build their confidence in purchasing shares and bonds issued by social enterprises looking to expand their operations,” she said.
IIX Asia, a Singapore-based social enterprise, seeks to establish the region’s first social stock exchange to provide sustainable social enterprises from developing countries with the opportunity to raise capital through the stock market.
The US firm, Rockefeller Foundation, provides financial support to this social enterprise.
Shahnaz informed the function, held at Sonargaon Hotel, that two local enterprises — Kazi and Kazi Tea and Waste Concern — are likely to be the first to get the chance to raise capital under this platform.
“We observe IIX Asia as an interesting platform to raise capital for our company,” said Kazi Anis Ahmed, chief executive officer of Kazi and Kazi Tea.
The daylong discussion, Impact Forum for Social Change, shed light on different aspects of a social enterprise.
Such an organisation uses business methods to address the issues relating to social or environmental concerns such as healthcare services, education, housing and microfinance.
“Social enterprises are making an important contribution to inclusive economic growth, but they need financing in providing opportunities for the poor in Asia and the Pacific,” said Margot Brandenburg, associate director of Rockefeller Foundation.
She stressed developing parallel investments, which are needed to build capacity of social enterprises and engage national and regional policymakers to make the exchange a success.
A total of 60 officials from the government, development agencies and social enterprises as well as experts in capital market development and resource mobilisation took part in the programme.
Mashiur Rahman, economic affairs adviser to the prime minister, and Bart W. Édes, director of ADB’s Poverty, Gender, and Social Development Division, also spoke.
