Jay Collins, Citi’s Vice Chairman, Corporate and Investment Banking, said about 2-3 trillions are needed annually to achieve the Sustainable Development Goals (SDGs).
According to Collins, the private sector has to take the lead in working to bridge the gap and technology can have a dramatic impact.
But quantity of capital is not going to be enough in itself: diversification in distribution is an important factor too.
Impact investing is becoming a mainstream investment strategy around the world. It is increasingly considered one of the instruments with the potential to help achieve the SDGs
Panel of experts representing the financial sector, companies and development agencies discussed strategies and recent trends in the impact investing landscape at the European Bank for Reconstruction and Development (EBRD) 2018 Annual Meeting and Business Forum in Jordan.
Development financial institutions, including the EBRD, are working together to identify issues that are preventing greater collaboration between investors, on the supply side, and the impact enterprises, the demand side.
An example of the demand side comes from Jordan, with Microfund for Women (MFW), a non-profit microfinance institution dedicated to providing financial and non-financial services to women to empower them both socially and economically.
In 2017, the EBRD provided a loan of up to $ 2 million in local currency to the MFW for on-lending. Technical cooperation funds by the EBRD Southern and Eastern Mediterranean (SEMED) Multi-Donor Account and the Shareholder Special Fund strengthen institutional and skill development in lending to refugees.
According to MFW’s Managing Director, Muna Sukhtian, development financial institutions (DFIs) like the EBRD help to crowd in more investors as they often take the initial risk.
Hashim Shawa, Bank of Palestine’s Chairman and General Manager, noticed an insufficient focus on investments for social impacts.
For example, in realities such as West Bank and Gaza job creation is crucial for sustainable economic development. But social issues including access to health, education and economic inclusion need more risk taking and this is where the DFIs can make a difference.