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Q and A: How does "impact investing" contribute to supporting society?



The idea of ​​"impact investing" began as an attempt to reduce the negative social impacts of commercial activities, but over the years there have been investors whose social responsibility constitutes the starting point for their investments, and avoiding investing in companies or activities that have negative effects is a form of influencer investing behavior.


Q- What is the concept of "impact investing"?

C- Impact investment refers to investments that are made within companies, institutions or organizations, with the aim of creating a social and environmental impact, in addition to the financial benefits gained, and the availability of impact investments capital in order to address social or environmental issues.


Q- When did the term impact investing appear?

C- The term impact investing appeared in 2007, and the interest in providing benefits to society and the environment in parallel to paying attention to financial return is an important component of impact investment.


Q- How much is the actual value of impact investment projects?

A- The influential investment market is still small compared to the global stock market, and the World Bank estimated in 2015 at $ 61 trillion (which is the market value of local companies), and according to the annual investment survey conducted in 2017, influential investment investors manage asset classes worth 114 billion US dollars, and this figure constitutes a good platform for the size of the influential investment market


Q- What are the most important sectors of impact investing business?

C- The largest sectors in this market are microfinance, energy, housing, and financial services.


Q- What is the difference between "impact investing" and crowdfunding sites?

A - Impact investing differs from crowdfunding sites, in that the field of impact investments is usually in debt or stocks that exceed $ 1,000, and with no exit strategy (which is usually in the form of an initial public offer).


Q- What is the classification of institutions that receive “impact investing” capital funding?

C- Institutions that receive funding from influential investment capitals can be legally classified as a for-profit or non-profit company, B companies, low-profit companies, companies working for the benefit of society, or other designations that differ from one country to another, but are known These companies are called "social enterprises" in most of Europe.


Q- What are "impact investing" accelerators?

C- There are what are known as impact investment accelerators, and their goal is to empower and develop social enterprises. Similar to the initial accelerators for traditional startups, impact investment accelerators provide smaller amounts of money resulting from larger impact investment deals, and most impact investment accelerators are non-profit institutions that collect supplies from Donors to pay for business development costs, but there has been an increase in the emergence of commercially oriented accelerators providing their advisory services for raising capital.


Q- How does Egypt implement the concept of "impact investing"?

C- The Egyptian government, the United Nations Development Program and Catalyst Partners for Direct Investment have jointly promoted "impact investment", through a new initiative to achieve sustainable development goals for private sector institutions and private investments, and to promote the observance of environmental and social standards and governance, and this comes within the framework of the vital role it plays The private sector in support of the national development agenda in Egypt.

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