The first investment from Oxfam’s pioneering social impact fund that seeks to alleviate poverty has been made to a company in Mongolia.
While some continue to question whether private industry has a role to play in the third sector, one of the world’s leading charity organisations, Oxfam, is already making headway with its ground-breaking social impact fund that has been developed in part with the City of London Corporation and also Swiss ethical investment fund manager, Symbiotics.
What’s unique about the fund is that Oxfam, a major global charity organisation, is getting behind supporting SME business growth to alleviate poverty and helping to ensure the business development retains a valuable social impact.
The fund is primarily focused on developing Small Medium Enterprises (SMEs) in developing countries to create economic development and jobs growth, and hopes to especially target women in business and the agricultural and food sector over time.
It’s a superb example of how prominent figures from major institutions in different sectors are capable of getting out of the box, as it were.
Despite the many challenges in the world, which are underpinned by the economic crisis, it’s also an example of how such conditions are an opportunity in many ways to rise to the challenge.
It also suggests that after some of the scandals concerned with finance, that there is a growing desire for business to be a force of good in the world in the spirit of the great business philanthropists of previous generations but using new and exciting ethical business investment models.
The multi-million SEIIF fund will target Small Medium Enterprises (SMEs) in developing countries, offering investors both measurable social impacts and financial returns, with relatively low risk, says its principles.
A strong focus on food production and sustainability and helping women engage in the economic cycle in the poorest regions of the world sounds like a very valuable return on investments in itself; but the fund is also about enabling real business growth in developing economies that at its core is concerned with creating jobs and infrastructure for businesses and entrepreneurs, to grow and add to their economies and benefit wider society.
Mark Boleat, Policy Chairman of the City of London
Corporation, explains: "This fund is an innovative model which enables
private sector investors to make a measurable social impact at a comparatively
low risk to their financial returns.
“The City of London is committed to driving forward an
approach to investment which puts the concept of service back at the heart of
financial services - and the SEIIF is a key part of this strategy."
Philipp Marxen, CEO of Xac Leasing, the company receiving
the first $1 million investment from the fund, says: "We are happy to
count on SEIIF as one of our first lenders.
“We are also proud that this means we can further enhance
our impact reporting commitment and thus better measure our contribution to the
growth of our national economy through the funding of SMEs."
The fund aims to directly create 100,000 good quality jobs
in its first five years.
Following the lead from Oxfam more and more charities can be
expected to move into this commercial approach to development via social impact investing,
which clearly has the ability to impact on a broad section of society in
developing countries and help to complement other development goals in terms of
health, transport, housing, food production, education, etc.At Xp we aim to continue to follow these developments in social impact investing that so often include a vital element of partnership, and are making such an impact already, via our main news channel as well as our CSR charity blog.
You can also find out more about these developments and the
role of microfinance/SME social impact investment via the Symbiotics
website, who are raising their profile in terms of facilitating socially
responsible investors via their partnership with Oxfam.
To discover more about the significance of this ethical-investment development and the social aims involved you can also read our charity
news article at our giving news site.
Also Oxfam’s blog on the fund and the importance of
developing SMEs in terms of sustainable development makes a fascinating read: a new partnership to address an old problem.
