Improving the quality of life in Indonesia, profitably: impact investing in Indonesia, a five year overlook

There has never been a better time for impact investment in Indonesia than now. Impact investing refers to commercial investments in companies that have a large social or environmental impact. This article will explain that Indonesia offers an estimated USD 23 billion in impact investment opportunities over the next 5 years. Whether investments are impact or non-impact driven, the underlying fundamentals of Indonesia are staged for growth.

  • The GDP is expected to grow at over 5% per year until 2030.
  • McKinsey forecasts that 90 million Indonesians will join the middle classes until 2030.
  • This consulting firm also projects an 11% growth per year for consumer spending on financial services and savings.
  • To regulate this growth, Indonesia established its Financial Services Authority as recently as 2011, with the launch of its digital financial services directorate in December 2016.

Internationally, impact investing is a growing type of investment. Warren Buffet’s news company BusinessWire recently cited the latest impact investing annual report for 2017. The report concluded that the impact investing market is expected to grow from an estimated value of USD 135 billion in 2015 to USD 307 billion by 2020, at an annual growth rate of 18% from 2015 to 2020. This is faster than the growth of investing overall. Little to no mention is made in the report about Indonesia.

Written by: By Thierry Sanders (CEO). Analysis by the Mekar Team