Impact investing refers to investments made with the intention to generate positive, sustainable and measurable social and environmental impact as well as financial returns. Impact investing is a rapidly growing industry in the world, with Indonesia seeing a fair share of startups funded by impact investors.
Impact investing refers to investments made with the intention to generate positive, sustainable and measurable social and environmental impact as well as financial returns. Impact investing is a rapidly growing industry in the world, with Indonesia seeing a fair share of startups funded by impact investors.
An invitation for all stakeholders to have a shared vision and connect actively
Impact investing is one of the solutions for achieving Sustainable Development Goals in Indonesia. Currently, 80% of businesses in need of funding are small and micro businesses, while conventional investors are mostly interested in big investment with non-concessionary return rate.
This has created a challenge for thriving medium and small businesses in accessing funds. According to market research from International Finance Corporation (IFC) and The United States Agency for International Development (USAID), 51% of small enterprises and 34% of medium-sized enterprises are owned by women. Women-owned Small and Medium Enterprises (SMEs) contribute to 9.1% of Indonesia’s Gross Domestic Product (GDP). It is apparent that one of the key challenges in impact investing is bridging the gap between mission-driven small and micro businesses to mission-driven big investors.
Together For Impact is an invitation for all stakeholders to have a shared vision as well as actively connecting to discuss the various ways they can funnel investments to small and micro businesses that need them the most.
Through this initiative, every stakeholder within the ecosystem of impact investing in Indonesia will be able to work in a concerted effort and create a bigger, more sustainable impact.
HOW TO MAKE IMPACT
Join us to be a part of #TogetherForImpact
Become social entrepreneurs
Today, Indonesia ranks 17th in the best country for social entrepreneurs. Social entrepreneurs are entrepreneurs or innovators who wish to bring solutions by inventing businesses or creating an innovation with sustainable and measurable impact for people and the environment whilst making financial return.
Their role in improving welfare is key, as Indonesia needs to start cultivating an entrepreneurial culture where business and frugal innovation thrive in order to overcome the problems of gender inequality, poverty, education, health and employment.
To fulfil their roles of empowerment, social entrepreneurs need to work closely with other stakeholders within the ecosystem of impact investing to receive the funding and direction they would need to operate their social enterprises.
For investors, the dual focus on profit and purpose can be a source of competitive advantage. Through the lens of social impact, investors are often able to identify new opportunities.
It’s about making growth more sustainable, more responsible and more impactful. It means prioritizing social progress and scale solutions worldwide to live sustainably.
Impact investing has the potential to grow in Indonesia, but the industry needs full support from the government in order to reduce risks and challenges.
Some of the challenges include currency instability, high tax for investors, unclear local regulations and corporate social responsibility (CSR) practices that focus on donations as opposed to sustainable impact.
In order for the industry to advance, it is important that the government create regulations and enabling environment for investors and social entrepreneurs to grow
