Why Impact Investing Is The Key To Solving Problems At Scale In Emerging Markets

Why Impact Investing Is The Key To Solving Problems At Scale In Emerging Markets

SUMMARY

Impact investing aims to solve large-scale problems in underserved segments while building commercially viable businesses

Entrepreneurs in emerging markets face larger business risks due to the lack of an evolved business ecosystem, making it harder to secure capital

Impact investors can help entrepreneurs create significant social and economic benefits in emerging markets, and their investments can attract follow-on capital through demonstrated scale and exits

Impact investing, at its core, aims to solve at-scale problems in unserved and underserved segments while building commercially viable businesses. Unlike conventional funds, which focus mainly on financial returns, impact investors provide risk capital to early or growth-stage entrepreneurs who aim to tackle challenges affecting disadvantaged end-customers in broken ecosystems. 

Entrepreneurs, typically first-generation, solving for these problems are armed with disruptive ideas but don’t have adequate capital support to tide over both innovation and execution risks. By supporting enterprises that, among other things, facilitate affordable access to essential products and services, create direct and indirect livelihood opportunities, and focus on environmental sustainability, impact funds can play a catalytic role for businesses and ecosystems. 

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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