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Impact Investing Market Predicted to Grow to $500 Billion by 2014

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August 3, 2011

SAN FRANCISCO, Aug. 2, 2011 /PRNewswire/ — The fourth annual Social Capital Markets Conference (SOCAP11) will be held September 6-9 at San Francisco’s Fort Mason Center. Hundreds of global innovators including investors, foundations, institutions and social entrepreneurs representing 75 countries are expected to gather in San Francisco to address the impact investing market – an emerging asset class that provides financial gains for investors with a social and environmental benefit.

The Global Impact Investing Network’s data last year estimated current impact investments at $50 billion but expect it to increase to $500 billion, or 1% of all managed assets, by 2014. Keeping pace with the market growth, SOCAP conferences have scaled more than 200% in three years. In the Bay Area, SOCAP has grown from 600 to 1,400 people, with 20,000 following online, and 8,000 community members active in social media channels. More than 50 social entrepreneurs will attend on scholarships. In addition, the best entrepreneurs from the best accelerator programs, including the Unreasonable Institute, Echoing Green and Slow Money will be pitching their companies to impact investors.

“SOCAP is bringing together a global community of change makers who are forming partnerships and funding innovative solutions that are built to achieve positive social change and yield profits,” stated Kevin Jones, SOCAP Founder. “We are passionate in supporting social entrepreneurs creating beneficial change in the world by providing access to institutions, investors and foundations that want to be their partners in this endeavor. We are dedicated to advocating this movement to the broad investing community by showcasing how they can choose to integrate money and meaning and make both a significant and valuable change for their portfolio and the people and planet around them.”

Helping investors identify solid investable opportunities has been made easier with the June launch of the ImpactAssets 50, the first publicly published list of private debt and equity impact investment fund managers including leaders from microfinance, community development, fair trade, and other strategies. The IA50 represents $8.9 billion of capital invested across multiple asset classes, geographies, and impact areas.

Ron Cordes, Co-Chairman of $21 billion asset management firm Genworth Financial Wealth Management and ImpactAssets board member remarked, “We’ve seen a dramatic increase in impact investment products and created the IA50 to address and simplify this rapidly evolving marketplace that is bridging the gap between philanthropy and traditional investment. SOCAP is instrumental in accelerating the sector’s growth and will help drive further dollars into the space by hosting and nurturing a worldwide community that aspires to educate, collaborate and partner in businesses that can solve the world’s social and environmental problems.”

Does branchless banking reach poor people? Evidence from India, Eko Financial Services

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by Chris Bold: Friday, June 17, 2011

New evidence from three countries on whether branchless banking is reaching poor people. This post looks at banking customers acquired and serviced by Eko as a Business Correspondent of banks in India. 

 

In the second survey out of three that have been conducted, Coffey International Development interviewed 814 branchless banking customers of Eko’s service in India. Customers were interviewed at 32 agent locations in two states: the national capital region around Delhi and in primarily rural and peri-urban Bihar.  As with the survey in Pakistan, customers were asked about the use of the service and also about their household living conditions that allowed an estimation to be made of their likely income levels.

Here are some of the headline figures:

  • 46% of respondents were likely to be living on or below the poverty line of USD 2.00  per day.* Nearly 14% were likely to live below a poverty line of USD 1.25 per day. We used a slightly different poverty line for our analysis of EasyPaisa customers, but the research suggests that Eko is serving a higher proportion of poor customers.
  • 39% of Eko customers had not used any form of financial services before and only 48% had previously had a bank account. The unbanked were 20 percentage points more likely to be poor than those who had used a bank in the past.
  • As in Pakistan, customers valued the service: circa three-quarters of respondents (76%) rated the service provided by the branchless banking outlets as highly effective. A similar proportion (74%) said that losing access to the service would have a negative impact on their life. 98% found the service very or moderately easy to use.

Unlike EasyPaisa customers in Pakistan, a large number of Eko’s customers use the service for saving money, especially the poor:

 

  • 37% of all respondents used the service for savings. When asked about their reason for saving 42% of respondents stated that they were saving in case of an emergency, with safekeeping being the next most common reason at 32%. Very few respondents (just 9%) stated that they saved with the purpose of making an investment.
  • Those living on less than USD 2.00 per day were 12% more likely to use the service for saving. This may be related to the fact that those with a higher probability of being poor were less likely to have used a formal bank in the past, which is as expected.
  • Most savers made deposits on a monthly basis, but around a third (34%) used the service to save on a weekly or more frequent basis.
  • High savings rates may be partly attributable to the ease of use of the service. When respondents were asked to rank the ease of using Eko’s service on a scale from 1 (not easy at all) to 10 (very easy) over three-quarters of customers rated the service as 8 or above.

Next week we will look at Orange Money customers in Mali and draw some comparisons between customers of the three services.

– Chris Bold