Bangladesh attracts $1.0b 'impact investment' so far

Dhaka,  Tue,  26 September 2017
Published : 11 Nov 2016, 00:32:51

Bangladesh attracts $1.0b 'impact investment' so far

It crosses idea phase and investors seek ways of measuring impact
FE Report

The country has so far attracted 'impact investment' to the tune of nearly US$ 1.0 billion, an international conference was told in Dhaka Thursday.

The Development Finance Institutions (DFIs) deployed over $ 834 million while other impact investors deploying $121 million.

The information was revealed at the first international summit on "Impact Investment in Bangladesh" organised in Dhaka by Bangladesh Brand Forum and initiated by Build Bangladesh - an initiative working on social entrepreneurship, economic empowerment and environmental sustainability in Bangladesh.

Impact investment, a new concept emerged in 2007, is defined as investments made into companies, organisations and funds with intention to generate social and environmental impact alongside a financial return.

This financial return differentiates impact investing from grant funding while the deliberate strategy for positive benefit to society separates it from traditional investments.

Most of the impact investment in the country has so far been deployed in growing sectors such as ICT, energy, financial services, agricultural/food processing, infrastructure, microfinance and manufacturing.

Impact investment is now used to finance initiatives such as aged care, health, housing, education, infrastructure, water and sanitation.

The impact investment in Bangladesh has crossed the idea phase and investors were seeking more sophisticated ways of measuring their impact, but there is a lack of good examples or tools to do so, according to a synopsis made available at the summit.

Bangladesh has the third most active impact investing market in South Asia after India and Pakistan.

The Global Impact Investing Network (GIIN) has projected prospects for capturing at least $ 2 trillion for global impact investment.

"The new concept of impact investment should be meant for promoting social investment so that none remains left outside the development efforts," Finance Minister AMA Muhith told the inaugural session of the summit. "This is also to promote economic empowerment of the people and their sustainability."

The summit, with the theme "Bangladesh is Ready - Driving the Sustainable Agenda", was featured with keynote sessions and three panel discussions by local and international experts.

Mr Muhith said Bangladesh has been managing its economy through engaging people with high inclusiveness. The World Bank Group President visited the country to celebrate the poverty day in Dhaka recently recognising the country's inclusive nature of growth, he noted.

"Our poverty rate drastically fell to just 22 per cent in 40 years from the 75 per cent," said the finance minister.

Speaking at the inaugural session, executive chairman of Bangladesh Investment Development Authority (BIDA) Kazi M Aminul Islam stressed the need for regulatory alignment of such new ideas to boost its expansion.

He said the social issue is mostly handled by the government and the number of philanthropic people is not so big in the country, and sought support for nurturing the new idea in Bangladesh.

Bangladesh Securities and Exchange Commission (BSEC) chairman Dr Khairul Hossain identified that the impact investment concept has four problems in the country-perception, its sizes, structural impediments and lack of intellectual people.

He said the area is now being funded by the donor agencies and stressed the need for more private participation.
Editor : A.H.M Moazzem Hossain
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