Social investing in Asia - does it need to be more courageous?
Kim Sophastienphong Regional Enterprise Development Programme Lead
1st Oct 2014
There's a growing interest in ethical investment in Asia but funds are still reluctant to risk investing in fledgling rural enterprises. Here Kim Sophastienphong, Enterprise Development Programme Lead, explains why putting rural women at the centre makes for more equitable social returns on investment.
Social impact investing is a hot topic right now. The excitement about the issue was evident at the Asian Venture Philanthropy Network (AVPN) Annual Conference held in Singapore earlier this year.
Very few funds look into supporting early stage community grown enterprises, because it requires a lot of support...It was a great networking event with over 300 participants from all over the world: impact investment funds, incubators, social enterprises, family foundations, academia, and other NGOs. The purpose of the conference was to share experiences of social investment and impact measurement in Asia.
I saw for myself the real excitement from the private sector and wealthy individuals about diverting traditional grant making to help build sustainable businesses that have social and environmental impacts. A lot of them were still figuring out how to get involved, where to start and who to work with to align with their mission. Funds already in operation are interested in building networks to learn from each other's experiences, to identify gaps in the business environment and to find ways to work together to bridge those gaps.
As for myself, I was there with an open heart and open mind to learn about what others are doing. I was particularly interested to learn if there are other funds that provide support to early stage rural enterprises like Oxfam's Enterprise Development Programme (EDP). This is because
I've learnt that the majority of the impact investment funds and venture philanthropy funds prefer to invest in more advanced and strongly growing enterprises. Very few funds look into supporting early stage community grown enterprises, because it requires a lot of support to build up entrepreneurial spirit and strong management skills. As a result, funds typically invest in enterprises that have an entrepreneur, a clear business vision, and a strong action plan of how to get there.
As a part of the EDP team, I find it very important for us to keep on investing and building more evidence so that other funds can see what success would look like if they invested in early stage rural enterprises as we do in EDP. It will take longer and will mean more grant money going into capacity building and providing close support than is usual when investing in more mature enterprises, but it could really bring about transformative changes to the lives of rural communities. If the focus for the investors of tomorrow is "Investments that positively impact the lives of people and society", then this space fits the bill.
...the enterprise has empowered women in the community by giving them direct access to markets and cashAt the AVPN event I was invited to be a guest speaker on behalf of Oxfam in one of the sessions. I had the opportunity to talk about EDP and share our experiences and challenges in working with enterprises for the last six years, putting a spotlight on our EDP-supported enterprises in Bangladesh and Sri
Lanka. In Bangladesh for example, the existence of the enterprise has empowered women in the community by giving them direct access to markets and cash where previously they were reliant on their husbands to travel for two hours to the market and back.
Putting women's rights at the heart of enterprise development makes all the difference in terms of equitable social returns on investment: it means women are given equal opportunities and are economically and socially empowered.
There is so much potential for investing in rural enterprises to bring about positive change, I hope that just some of the enthusiastic investors that I met at the AVPN event will be inspired to follow EDP's lead and move into this challenging yet impact focused investment space.
Sukitha works at Oxfam's dairy co-op in Muruganwr, Sri Lanka. Credit: Abir Abdullah/ Oxfam
Joygun Islam at work in her chilli field, Bangladesh. Credit:Rachel Corner/Oxfam