Social Impact Investing in Small and Growing Businesses on the Rise, Report Finds

[from Philanthropy News Digest] Despite record levels of investment in small and growing businesses (SGB) in the developing world, additional capital and better data on social impact are needed if the sector is to reach its full potential, a report from the Aspen Network of Development Entrepreneurs finds.

According to the 2010 ANDE Impact Report (44 pages, PDF), between 2001 and the first half of 2010, 199 funds raised a total of $10.6 billion to invest in emerging market SGBs. Over the past year, ANDE — a global network of more than 110 investors — has grown by thirty-seven members and expanded into eighteen additional countries.

Collectively, ANDE members manage sixty-three SGB funds, accounting for some $900 billion across 2,500 investments. Since the network's inception, ANDE members have supported more than 11,000 SGBs through capacity development, direct equity, or debt investment.

"Increasingly, the development community is recognizing that market-based approaches offer a more effective model for providing key products and services to needy populations," said ANDE executive director Randall Kempner. "Meanwhile, the traditional investment community is recognizing the potential of making financial returns while improving society. This convergence is leading to a greater understanding of the power of SGBs as well as increased capital flows into the sector."

“Aspen Network of Development Entrepreneurs Releases Second Annual Impact Report.” Aspen Network of Development Entrepreneurs Press Release 4/29/11.